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Accounting Policies of Apis India Ltd. Company

Mar 31, 2014

1.1 Basis of preparation of Financial statements:

a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 2013 as adopted consistently by the Company. There is no change in the accounting policies as compared to the preceding year.

b) The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis, if determinable.

1.2 Fixed Assets and Capital work-in-progress

a) Tangible assets are stated at their original cost of acquisition including taxes, duties, freight, and other incidental expenses related to acquisition and installation of the concerned assets less accumulated depreciation and impairment losses, if any.

b) Subsequent expenditure related to an item of tangible asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day to day repair and maintenance expenditure are charged to the statement of profit and loss for the period during which such expenses are incurred.

c) Pre-operative expenses including eligible borrowing cost incurred during construction period are charged to Capital Work-in-Progress and on completion, the cost is allocated to the respective fixed assets in the year of commencement of commercial production.

d) Capital work-in-progress comprises cost of fixed assets that are not yet ready for their intended use at the balance sheet date.

1.3 Intangible Assets:

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/Depletion. All costs, including financing costs till commencement of commercial production, net changes on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized.

1.4 Depreciation and Amortization:

In respect of Fixed Assets, depreciation is provided Block wise on Straight Line Method in accordance with the provisions of schedule XIV of the Companies Act, 1956. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis.

1.5 Impairment of Asset:

Wherever events or changes in circumstances indicate that the carrying value of fixed assets may be impaired, the company subjects such assets to a test of recoverability, based on discounted cash flows expected from use or disposal thereof. If the assets are impaired, the company recognizes an impairment loss as a difference between the carrying value and fair value net of cost of sale in accordance with AS-28 "Impairment of Assets", issued by the Institute of Chartered Accountants Of India. None of the company''s fixed assets are considered for impairment as on the Balance Sheet date.

1.6 Inventory:

(i) Raw materials, consumables stores and spares are valued at lower of cost and net realizable value. Work in progress and finished goods are valued at lower of cost and net realizable value.

(ii) The costs of work in progress and finished goods include costs of raw material, conversion cost and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on weighted average/FIFO/specific identification, as applicable.

1.7 Cash Flow Statement:

a) The statement has been prepared under indirect method except in case of dividends, sale/purchase of investments and taxes which have been considered on the basis of actual movement of case, with corresponding adjustments in assets and liabilities as set out in the Accounting Standard 3 issued by ICAI.

b) Cash and Cash equivalents represent Cash and Bank balances only.

1.8 (i) Foreign Currency Transactions:

All income or expense on account of exchange difference between the date of transaction and on settlement date or translation is recognized in the Profit & Loss account as income or expense except in cases where they relate to the acquisition of fixed assets.

(ii) Conversion and exchange differences

Monetary Assets and Liabilities denominated in foreign currency are translated at the rate of exchange at the Balance Sheet date and resultant gain or loss is recognized in the Statement of Profit and Loss. Non monetary assets and liabilities denominated in foreign currency are carried at historical cost using the exchange rate at the date of transaction.

(iii) Forward exchange contracts

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/income over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the period in which the exchange rates change.

1.9 Provisions and Contingencies:

The company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

1.10 Revenue Recognition:

Sales of goods are recognized at the point of dispatch of Finished Goods to Customers net of returns.

1.11 Retirement Benefits:

Provision of gratuity has been made in the books but there is no amount of leave encashment or any other retirement benefits for which the company may be made liable to pay. Hence no provision for the same has been made, except provision for the gratuity as on the date of Balance sheet.

1.12 Prior Period Items:

Prior Period expenses, if any significant, are charged to Profit and Loss Account and shown in Notes to Accounts.

1.13 Borrowing Costs:

Borrowing cost attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Profit & Loss account.

1.14 Preliminary Expenses:

Preliminary expenses are amortized over a period of five (5) years.

1.15 Taxation:

Tax expense for the year comprises of current tax and deferred tax.

i) Current tax is determined on the amount of tax payable in respect of taxable income for the period, using the applicable tax rates and tax laws in accordance with the provisions of Income Tax Act 1961. The Company is eligible for deduction under section 80-IC of Income Tax Act, 1961 in respect of income of the Unit situated in Roorkee (Uttarakhand).

ii)Deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date.

1.16 Other Accounting Policies

Accounting policies not referred to otherwise are consistent with generally accepted Accounting principles.


Mar 31, 2013

1.1 Basis of preparation of Financial statements :

a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company. There is no change in the accounting policies as compared to the preceding year.

b) The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis, if determinable.

1.2 Fixed Assets and Capital work-in-progress

a) Tangible assets are stated at their original cost of acquisition including taxes, duties, freight, and other incidental expenses related to acquisition and installation of the concerned assets less accumulated depreciation and impairment losses, if any.

b) Subsequent expenditure related to an item of tangible asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day to day repair and maintenance expenditure are charged to the statement of profit and loss for the period during which such expenses are incurred.

c) Pre-operative expenses including eligible borrowing cost incurred during construction period are charged to Capital Work-in-Progress and on completion, the cost is allocated to the respective fixed assets in the year of commencement of commercial production.

d) Capital work-in-progress comprises cost of fixed assets that are not yet ready for their intended use at the balance sheet date.

1.3 Intangible Assets:

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization /Depletion. All costs, including financing costs till commencement of commercial production, net changes on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized.

1.4 Depreciation and Amortization:

In respect of Fixed Assets, depreciation is provided Block wise on Straight Line Method in accordance with the provisions of schedule XIV of the Companies Act, 1956. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis.

1.5 Impairment of Asset:

Wherever events or changes in circumstances indicate that the carrying value of fixed assets may be impaired, the company subjects such assets to a test of recoverability, based on discounted cash flows expected from use or disposal thereof. If the assets are impaired, the company recognizes an impairment loss as a difference between the carrying value and fair value net of cost of sale in accordance with AS-28 "Impairment of Assets", issued by the Institute of Chartered Accountants Of India. None of the company''s fixed assets are considered for impairment as on the Balance Sheet date.

1.6 Inventory:

(i) Raw materials, consumables stores and spares are valued at lower of cost and net realizable value. Work in progress and finished goods are valued at lower of cost and net realizable value.

(ii) The costs of work in progress and finished goods include costs of raw material, conversion cost and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on weighted average/FIFO/specific identification, as applicable.

1.7 Cash Flow Statement:

a) The statement has been prepared under indirect method except in case of dividends, sale / purchase of investments and taxes which have been considered on the basis of actual movement of case, with corresponding adjustments in assets and liabilities as set out in the Accounting Standard 3 issued by ICAI.

1.9 Provisions and Contingencies:

The company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made.

The Company has given a corporate guarantee of Rs. 9 crores in on behalf of M/s Apis India Incorporated, a proprietorship firm.

1.10 Revenue Recognition :

Sales of goods are recognized at the point of dispatch of Finished Goods to Customers net of returns.

1.11 Retirement Benefits:

There is no amount of gratuity liability or leave encashment or any other retirement benefits for which the company may be made liable to pay. Hence no provision for the same has been made as on the date of Balance sheet.

1.12 Prior Period Items:

Prior Period expenses, if any significant, are charged to Profit and Loss Account and shown in Notes to Accounts.

1.13 Borrowing Costs:

Borrowing cost attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Profit & Loss account.

1.14 Preliminary Expenses:

Preliminary expenses are amortized over a period of five (5) years.

1.15 Taxation:

Tax expense for the year comprises of current tax and deferred tax.

i) Current tax is determined on the amount of tax payable in respect of taxable income for the period, using the applicable tax rates and tax laws in accordance with the provisions of Income Tax Act 1961. The Company is eligible for deduction under section 80-IC of Income Tax Act, 1961 in respect of income of the new Unit situated in Roorkee (Uttarakhand) which started its commercial production in March 2012.

ii) Deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date.

1.16 Other Accounting Policies

Accounting policies not referred to otherwise are consistent with generally accepted Accounting principles.

 
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