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Accounting Policies of Aarv Infratel Ltd. Company

Mar 31, 2014

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Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

1.3 Inventories

Inventories are valued at the lower of cost (on FIFO basis) and the net realizable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including control and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payment; The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and amortization

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

1.7 Revenue recognition

Sale of goods

Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

1.8 Other income ,

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

1.9 Tangible fixed assets .

Fixed assets, are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes major modifications / betterments / interest / financial charges and other expenditure incidental to such acquisition.

1.10 Investments

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

1.11 Employee benefits

As there are no Employees with employment benefits payable the actual valuation or disclosures as required under the Accounting Standard -15 are not applicable.

1.12 Borrowing costs

Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.17 Segment reporting

Since the company is dealing in a single product the disclosure requirements as per Accounting Standard -17 on Segment Reporting is not applicable.

1.18 Leases

As there are no Lease arrangements in the company recognition, valuation and disclosure requirements -s required under the Accounting Standard -19 for leases are not applicable.

1.19 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.20 Taxes on income

Accounting for Taxes on Income like recognition, measurement and disclosure of deferred taxes is not made as there is no reasonable certainty of future taxable profits against which such deferred tax profits / losses could be set-off / adjusted.

1.23 Impairment of assets

The entire plant is considered as a cash generating unit. As the recoverable amount of the cash generating unit, is expected to be in excess of its carrying amount there is no impairment loss in terms of Accounting Standard - 28 on Impairment of Assets.

1.24 Provisions and contingencies

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.


Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories

Inventories are valued at the lower of cost (on FIFO basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit I (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and amortisation

Depreciation has been provided on the straight-fine method as per the rates prescribed in Schedule XIV to the Companies Act, 1956,

1.7 Revenue recognition

Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership tc the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

1.8 Other income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

1.9 Tangible fixed assets

Fixed assets, are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixer assets includes major modifications I betterments I interest I financial charges and other expenditure incidental to such acquisition.

1.10 Investments

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

1.11 Employee benefits

As there are no Employees with employment benefits payable the actual valuation or disclosures as required under the Accounting Standard -15 are not applicable.

1.12 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs In connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Sorrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.13 Segment reporting

Since the company is dealing in a single product the disclosure requirements as per Accounting Standard -17 on Segment Reporting is not applicable.

1.14 Leases

As there are no Lease arrangements in the company recognition, valuation and disclosure requirements as required under the Accounting Standard -19 for leases are not applicable.

1.15 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits I reverse share splits and bonus shares, as appropriate.

1.16 Taxes on income

Accounting for Taxes on Income and ascertainment of deferred taxes is not possible as there is no possibility of profits in the near future.

1.17 impairment of assets .

The entire plant is considered as a cash generating unit. As the recoverable amount of the cash generating unit, is expected to be in excess of its carrying amount there is no impairment loss in terms of Accounting Standard - 28 on Impairment of Assets.

1.18 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes,


Mar 31, 2010

A) ACCOUNTING CONVENTION

Financial statements are prepared under the historical cost basis_

B) BASIS OF ACCOUNTING Books of accounts are maintained on an accrual basis.

C) REVENUE RECOGNITION

Sales are recorded at excluding value added tax (VAT) Purchases figures are exclusive of VAT but inclusive of Central Sales Tax

D) FIXED ASSETS

Fixes Assets are recorded at historical costs of acquisition (which includes major modification/betterment/interest/financial charges and Other expenditure incidental to such acquisition).

E) DEPRECIATION

Depreciation on Fixed Assets has been provided on Straight Line Method (SLM) and in the manner provided in schedule XIV of the Companies Act 1956

F) IMPAIRMENT OF ASSETS

The entire plant is considered as a cash generating unit. As the recoverable amount of the cash generating unit, being its value in use is expected to be in excess of its carrying value there is no impairment loss in terms of Accounting Standard - 28 on Impairment of Assets.:

G) INVENTORIES

Inventories are valued at cost or net realizable value whichever is lower. Costs in respect of inventories are ascertained on First in First out (FIFO) Method.

H) INVESTMENTS

Investments are classified as Current or Long Term Investment on the basis of nature and intention to held the investment.

Long Term investments are valued at cost after appropriate adjustment, if necessary, for permanent diminution in their value.

Current Investments are stated at lower of cost or fair value.

I) SEGMENTAL REPORTING

Since the company is dealing in a single product the disclosure requirements as per Accounting Standard - 17 on Segment Reporting is not applicable.

J) BORROWING COST.

Borrowing cost on working capital is charged against the profit & loss account in which it is incurred.

Borrowing costs that are attributable to the acquisition or construction or manufacture of qualifying assets are capitalized as a part of the cost of such assets till the date of acquisition or completion of such assets. In respect of suspended project for extended period, borrowing costs are not capitalized for such period.

PRIOR PERIOD ITEMS

Significant items J Income or Expenditure, which relates to the prior accounting periods are accounted in the Profit and Loss Account under the head poor year Adjustments" other than those occasioned by the events occurring during or after the close of the year and which are treated as relatable to the current year.

TAYK ON INCOME

Accounting for Taxes on Income and ascertainment of deferred taxes is not possible as there is no possibility of profits in the near future.

K) RETIREMENT Benefits

As there are no employees with employment benefits payable the actuarial valuation or disclosures as required under the Accounting Standard - 15 on retirement benefits are not applicable.

L)Contingent liabilities

contingent liabilities are disclosed by way of notes to accounts. provision is made if it becomes prosaic that. an out flow of future economic benefit will be required for an item previously dealt with as contingent liability,

 
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