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Accounting Policies of Archon Industries Ltd. Company

Mar 31, 2014

1.1 Accounting Convention:

The financial statements are prepared under the historical cost convention on the "Accrual Concept" of accountancy in accordance with the accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India to the extent applicable and with the relevant provisions of the Companies Act, 1956.

1.2 Use of Estimates:

The preparation of the Financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known materialized.

1.3 Accounting for Fixed Assets:

Fixed Assets are stated at cost of acquisition and subsequent improvements net of CENVAT credit and VAT but including freight and other incidental expenses related to acquisition, installation and foundation less accumulated depreciation. Direct expenses as well us pro rata identifiable indirect expenses on the projects during construction period are capitalized and apportioned on fixed assets on the date of commencement of commercial production.

1.4 Depreciation Accounting:

Depreciation has been provided on straight line method and at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

Depreciation is not recorded on capital work-in-progress until construction and installation are complete and asset is ready for its intended use. Capital work - in - progress includes capital advances.

1.5 Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value and impairment loss is charged to profit and loss account in the period in which assets is identified as impaired. The impairment loss, if any recognized in prior accounting periods is reversed if there has been a changed in the estimate of recoverable amount.

1.6 Borrowing Cost:

Borrowing Costs that are attributable to the acquisition, construction or production of qualifying fixed assets are capitalized as part of the cost of such assets. All other borrowing costs are recognized as expenses in the period in which they are incurred.

1.7 Accounting for Investments:

Current investments are carried at the lower of cost and fair value computed category wise. Long term investments are stated at cost. Provision for diminution in the value of long term investments is made, only if, in the opinion of the management, such a decline is regarded as being other titan temporary.

1.8 Valuation of Inventories:

The company did not have any inventories during the year.

1.9 Revenue Recognition:

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

1.10 Accounting for Taxes on Income :

Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax resulting from "timing difference" between taxable incomes and accounting income is accounted for, using the tax rates and tax laws that have been enacted or substantially enacted as on the Balance Sheet date.

1.11 Provisions, Contingent Liabilities and Contingent Assets :

Contingent Liabilities being a possible obligation as a result of past events the existence of which will be confirmed by the occurrence or non-occurrence of one or more future events not wholly in the control of the company. Contingent Liabilities are not recognized in the accounts. Further the nature of such liabilities, an estimate of its financial effect, etc. is disclosed as a part of Notes to Accounts.


Mar 31, 2013

1. System of Accounting: -

The financial statements have been prepared to comply in all material respects with the generally accepted accounting principles, Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

The financial statements have been prepared under the historical cost convention on accrual basis of accounting except that insurance and other claims/refunds are being accounted for/adjusted in the books as and when settled. The accounting policies have been consistently applied by the Company and are in line with those used last year. The Company has not carried out any fresh business, on account any accumulated losses, the net worth of the company had eroded, the account of the company has been prepared on the going concern basis, although there exists an uncertainty about the future activities.

The Company follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

2. Revenue Recognition: -

Expenses and Income considered payable and receivable respectively are accounted for on accrual basis except for the current years vat liability of Rs. 61,952/- which is not provided in the books of accounts as reported in the Auditor''s Report in point 2 (4).

3. Fixed Assets: -

Fixed assets are stated at historical cost, except part of leasehold land, building, shed and Plant & Machinery revalued and stated at less accumulated depreciation and impairment losses if any. Cost comprises of the purchase price (net of tax/duty credit availed) and any cost direct / incidental and borrowing cost attributable bringing the asset to its working condition for its intended use.

Leasehold on which premium has not been paid, not written off since lease is for a long period.

4. Depreciation on Fixed Assets: -

Depreciation is provided on fixed assets on straight line basis in accordance with the rates prescribed in Schedule XIV of the Companies Act 1956.

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal and external factors. An impairment loss is recognized wherever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the greater of the assets'' net selling price and the value in use. In assessing value in use the estimated future cash flows are discounted to their present value at the weighted average cost of capital

Till 31ST March, 1993:

i) Depreciation on assets installed upto 30th june, 1987 is provided at the rate of depreciation prevalent at the time of installation of assets as per clarification by the ministry of industry, department of company affairs, vide its circular no. 1/86 dt. 21st may,1986.

ii) Deprecation on installation of fixed assets after 30th June, 1987 is provided as per rates specified in the schedule XIV of The Companies Act,1956.

After 31ST March, 1993:

Depreciation on all Assets installed after 31ST March 1993 is provided at the new rates as amended by the Notification no. GSR756(E) DT.16/12/93 read with circular no. 14 Dt. 20/12/93 issued by the Department of Company Affairs.

Depreciation on assets except Plant and Machinery is provided on "Written down value method" as per provision of section 205(2) Schedule XIV of The Companies Act,1956.

5. Investments: -

Investments are of long term nature and stated at cost.

6. Inventories: -

Inventories valued at cost or net realizable value whichever is lower.

7. Provisions

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which reliable estimates can be made.

Provisions are not discounted to its present value and are determined based on best management estimates required to settle the obligations at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best management estimates, except for the current years vat liability of Rs. 61,952/- which is not provided in the books of accounts as reported in the Auditor''s Report in point 2 (4).

8. Cash Flow Statement

The Company has prepared the Cash Flow Statement using the Indirect Method in compliance with Accounting Standard issued by The Institute of Chartered Accountants of India (AS-3).

9. Use of Estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/ materialized.

10. Contingencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent. Contingent liabilities not provided for are in respect of:

I. Claims not acknowledged as debts 2013 2012

11. Estimated value of contract remaining to be executed on

capital accounts and not provided for (Net of advances) Nil Nil

11. Taxes on Income: -

Provision for current tax is made based on the tax payable under the current provisions of the tax laws applicable in the jurisdiction where in the income is assessable.

Deferred tax expenses or benefit is recognized on timing differences being the difference between taxable income and accounting income that arises in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets and liabilities are accounted for, using the tax rates and tax laws applicable as on the Balance Sheet date.


Mar 31, 2012

1. System of Accounting:-

The financial statements have been prepared to comply in all material respects with the generally accepted accounting principles, Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

The Financial statements have been prepared under the historical cost convention an accrual basis of accounting except that insurance and other claims / refunds are being accounted for / adjusted in the books as and when settled. The accounting policies have been consistently applied by the Company and are in line with those used last year. The Company has not carried out any fresh business, on account any accumulated losses, the net worth of the company had eroded, the account of the company has been prepared on the going concern basis, although there exists an encertainty about the furture activities.

The Company follows mercantile system of accounting and recognizes significant terms of income and expenditure on accrual basis.

2. Revenue Recognition:-

Expenses and Income considered payable and receivable respectively are accounted for on accrual. 3. Fixed Assets: Fixed Assets are stated at historical cost, except part of leasehold land, building shed and plant & Machinery revalued and stated at less accumulated depreciation and impairment losses if any. Cost comprises of the purchase price (net of tax/duty creidt availed) and any cost direct/ incidental and borrowing cost attributable bringing the asset to its working condition for its intended use.

Leasehold on which premium has not been paid, not written off since lease is for a long period.

4. Depreciation on Fixed Assets:- Depreciation is provided on fixed assets on straight line basis in accordance with the rates prescribeb in Schedule XIV of the Companies Act, 1956.

The Carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal and external factors. An impairment loss is recognized wherever the carrying amount of assets exceeds its recoverable amount. The receoverable amount is the greater of the assets net selling price and the value in use. In assessing value in use the estimated future cash flows and discounted to their present value at the weighted average cost of capital.

Till 31ST March, 1993:

i) Depreciation on assets installed upt 30the June, 1987 is provided at the rate of depreciation prevalent at the time of installation of assets as per clarification by the ministry of industry, department of company affairs, vide its circular no.1/86 dt. 21st may, 1986.

ii) Depreciation on installation of fixed assets after 30th June, 1987 is provided as per rates specified in the schedule XIV of The Companies Act, 1956.

After 31ST March, 1993:

Depreciation on all Assets installed after 31ST March 1993 is provided at the new rates as amended by the Notification no.GSR756(E) DT.16/12/93 read with circular no14 Dt. 20/12/93 issued by the Department of Company Affairs.

Depreciation on assets except Plant and Machinery is provided on "Written down value" as per provision of section 205(2) Schedule XIV of The Companies Act, 1956. (5) Investment: INVESTMENT ARE OF LONG TERM NATURE AND STATED AT COST. (6) Iventories:- Inventories VALUED AT COST OR NET REALISABLE VALUE WHICHEVER IS LOWER.

7. Provisions

A Provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which reliable estimate can be made.

Provisions are not disccunted to its present value and are determined based on best management estimates required to settle the obligations at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best management estimates.

8. Cash Flow Statement

The Company has prepared the Cash Flow Statement using the Indirect Method in compliance with Accounting Standard issued by The Institute of Chartered Accountants of India (AS-3).

9. Use of Estimates

The Preparation of financial statements in conformity with the generally accepted accounting principles requires estimated and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actural result and estimates are recognized in the period in which the results are known / materialized.

10. Contigencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent.

11. Taxes of Income

- Provision for current tax is made bases on the tax payable under the current provisions of the tax laws applicable in the jundication where in the income is assessable.

- Deferred tax expenses or benefit is recognized on timing differences being the difference between taxable income and accounting income that arises in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets and liabilities are accounted for, using the tax rates and tax laws applicable as on the Balance Sheet date.

 
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