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Accounting Policies of Ausom Enterprise Ltd. Company

Mar 31, 2014

1.1 Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention, on accrual basis in accordance with Generally Accepted Accounting Principle (GAAP), and comply with the Companies (Accounting Standard) Rules 2006 and relevant provisions of the Companies Act 1956 to the extent applicable and the Provisions of the Companies Act, 2013 to the extent notified.

1.2 Use of estimates

The preparation of financial statements 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 results and estimates are recognised in the period in which the results are known / materialised.

1.3 Tangible fixed assets

Fixed Assets are stated at cost less accumulated depreciation. The cost comprises of purchase price, duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

1.4 Depreciation

Depreciation on tangible fixed assets is provided on Straight Line Method in accordance with the rates and in manner specified in Schedule XIV of the Companies Act, 1956.

1.5 Inventories

(i) Trading Goods are valued at Cost or Net Realizable value whichever is lower. Cost is arrived at by using FIFO method.

(ii) Shares and Securities are valued at Cost or Net Realizable value whichever is lower. Cost is arrived at by using FIFO method.

1.6 Cash Flow

The cash flow statement is prepared by the indirect method set out in Accounting Standard-3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposit with banks.

1.7 Revenue Recognition

A. Revenue from sales is recognised at the point of dispatch to the customers when risk and reward stand transfered to the customers. Sales are inclusive of freight wherever it is charged.

B. Dividend income is recognised when the right to receive the dividend is established.

C. Operating and other Interest income on FDR is recognised on the time proportion basis taking into account of the amount outstanding and rate applicable.

D. Shares Transactions

(i) Where share trading purchase and share trading sales is settled within the same settlement, only net gain or loss is booked.

(ii) Where share trading purchase and share trading sales is not settled within the same settlement each transaction is accounted as purchase and sales respectively.

E. Derivative Transactions in Future and Option

(i) Future or Option transactions in Equity/Index/Currency/Commodity are accounted expiry date wise separately.

(ii) Gain or Loss is accounted on expiry date.

(iii) Contracts for future or option in Equity/Index/Currency/Commodity remaining unsettled at balance sheet date are provided for in case of loss only.

(iv) When future or option contract settled with actual delivery, the same is accounted for respective contract wise as purchase/sales.

F. Other Income

Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exist.

1.8 Purchase

Purchase cost of shares, securities and Units of Mutual Funds does not include other incidental charges except brokerage charges.

1.9 Employee Benefits

Short-term employee benefits are recognized as expenses in the Statement of Profit and Loss of the year in which the related service is rendered atthe undiscounted amount as and when it accrues.

Long term employee benefits and post-employment benefits both funded and non-funded are recognized as expenses in the Statement of Profit and Loss of the year in which the related service is rendered based on actuarial valuation.

i. Company''s Contribution towards provident fund are accounted for at pre-determined rates and deposited in to an EPFO.

ii. Gratuity is accounted for on the basis of actuarial valuation.

1.10 Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and lows that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

1.11 Provisions, Contingent Liabilities and Contingent Assets

Provision is recognized when there is a present obligation as a result of past event that probably requires an outflow of resources and reliable estimate can be made of the amount of the obligation. Disclosure for Contingent Liabilities is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. No provision is recognized or disclosure for Contingent Liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial statements.

1.12 Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior period is reversed if there has been a change in the estimate of recoverable amount.

1.13 Foreign Currency Transactions

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies attheyear-end are restated atyear-end rates.

(c) Any income or expenses on account of exchange difference either on settlement or on translation is recognised in the Statement of Prof it and Loss.

(d) Profit/Loss on Forward Rate Agreement taken for hedging interest rate related risk is accounted at the time of starting date of each agreement.

(e) Foreign currency transactions hedged through forward contracts, the premium on such forward contracts is amortised over the life of the contract.

1.14 Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as non-current investments. Current Investments are carried at lower of cost and quoted/fair value determined on category/item wise. Non- current investments are stated at cost. However, Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

1.15 Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit and Loss.

2.3

(a) Terms/Rights attached to equity shares

(i) The company has only one class of equity shares having a par value of Rs. 10/-per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed if any by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting.

(ii) In the event of liquidation of the company, the holder of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) Terms of Redemption, conversion & rights of preference shares

(i) Preference shares carry non-cumulative dividend at 1.5% p.a. (Upto 31/03/2013: cummulative dividend @ 16.5% p.a.). The dividend proposed if any by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting. The preference shares shall, in addition have a right to participating dividend over and above the base dividend mentioned above.

(ii) The liability for payment of Dividend on Cumulative Redeemable Participating Preference Shares of Rs. 20,00,00,000 is not provided in view of the accumulated loss. The amount of such accumulated dividend comes to Rs. 37,34,00,000 up to 31/03/2014.

(iii) The Preference Shares were issued on 09/12/1999 and are redeemable at par in three equal annual installments. The installments of such redemption were due on 9th Dec, 2006, 9th Dec 2007 and 9th Dec 2008. However, the Company has received consent letter from the preference shareholders postponing their right to receive payment of the installments of redeemption of preference shares amounting to Rs. 20,00,00,000 by eight years.

(iv) At the time of redemption of the Preference Shares or in the event of winding-up of the Company, the arrears of dividend on the Preference Shares whether earned, declared or not shall also be paid to the Subscribers.

(v) The Subscribers shall have the same voting rights in respect of the Preference Shares as are available and applicable to preference shares under the Companies Act, 1956.

(vi) In the event of default in payment of base and / or participating dividend inspite of adequate profits and / or redemption of Preference Shares as per the terms of issue, the subscriber shall have the right to convert at its option 100% of the Preference Shares into fully paid-up Equity Shares of the Company, at par, in the manner specified in writing to be given by the Subscribers.


Mar 31, 2013

1.1 Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention, on accrual basis in accordance with Generally Accepted Accounting Principle (GAAP), and comply with the Companies (Accounting Standard) Rules 2006 and relevant provisions of the Companies Act 1956 to the extent applicable.

1.2 Use of estimates

The preparation of financial statements 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 results and estimates are recognised in the period in which the results are known / materialised.

1.3 Tangible fixed assets

Fixed Assets are stated at cost less accumulated depreciation. The cost comprises of purchase price, duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

1.4 Depreciation

Depreciation on tangible fixed assets is provided on Straight Line Method in accordance with the rates and in manner specified in Schedule XIV of the Companies Act, 1956.

1.5 Inventories

(i) Trading Goods are valued at Cost or Net Realizable value whichever is lower. Cost is arrived at by using FIFO method. (ii) Shares and Securities are valued at Cost or Net Realizable value whichever is lower. Cost is arrived at by using FIFO method.

1.6 Cash Flow

The cash flow statement is prepared by the indirect method set out in Accounting Standard-3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposit with banks.

1.7 Revenue Recognition

A. Revenue from sales is recognised at the point of dispatch to the customers when risk and reward stand transfered to the customers. Sales are inclusive of freight wherever it is charged.

B. Dividend income is recognised when the right to receive the dividend is established.

C. Operating and other Interest income on FDR is recognised on the time proportion basis taking into account of the amount outstanding and rate applicable.

D. Shares Transactions

(i) Where share trading purchase and share trading sales is settled within the same settlement, only net gain or loss is booked.

(ii) Where share trading purchase and share trading sales is not settled within the same settlement, each transaction is accounted as purchase and sales.

E. Derivative Transactions in Future and Option

(i) Future or Option transactions in Equity/Index/Currency/Commodity are accounted expiry date wise separately.

(ii) Gain or Loss is accounted on expiry date.

(iii) Contracts for future or option in Equity/Index/Currency/Commodity remaining unsettled at balance sheet date are provided for in case of loss only.

(iv) When future or option contract settled with actual delivery, the same is accounted for respective contract wise as purchase/sales.

F. Other Income

Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exist.

1.8 Purchase

Purchase cost of shares, securities and Units of Mutual Funds does not include other incidental charges except brokerage charges.

1.9 Employee Benefits

Short-term employee benefits are recognized as expenses in the Statement of Profit and Loss of the year in which the related service is rendered at the undiscounted amount as and when it accrues.

Long term employee benefits and post-employment benefits both funded and non-funded are recognized as expenses in the Statement of Profit and Loss of the year in which the related service is rendered based on actuarial valuation.

i. Company''s Contribution towards provident fund are accounted for at pre-determined rates and deposited in to an EPFO. ii. Gratuity is accounted for on the basis of actuarial valuation.

1.10 Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and lows that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

1.11 Provisions, Contingent Liabilities and Contingent Assets

Provision is recognized when there is a present obligation as a result of past event that probably requires an outflow of resources and reliable estimate can be made of the amount of the obligation. Disclosure for Contingent Liabilities is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. No provision is recognized or disclosure for Contingent Liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial statements.

1.12 Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior period is reversed if there has been a change in the estimate of recoverable amount.

1.13 Foreign Currency Transactions

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies at the year-end are restated at year-end rates.

(c) Any income or expenses on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit and Loss.

(d) Profit/Loss on Forward Rate Agreement taken for hedging interest rate related risk is accounted at the time of starting date of each agreement.

(e) Foreign currency transactions hedged through forward contracts, the premium on such forward contracts is amortised over the life of the contract.

1.14 Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as non-current investments. Current Investments are carried at lower of cost and quoted/fair value determined on category/item wise. Non- current investments are stated at cost. However, Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

1.15 Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit and Loss.


Mar 31, 2012

1.1 Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention, on accrual basis in accordance with Generally Accepted Accounting Principle (GAAP), and comply with the Companies (Accounting Standard) Rules 2006 and relevant provisions of the Companies Act 1956 to the extent applicable.

1.2 Presentation and disclosure of financial statements

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosure made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

1.3 Use of estimates

The preparation of financial statements 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 results and estimates are recognised in the period in which the results are known/materialised.

1.4 Tangible fixed assets

Fixed Assets are stated at cost less accumulated depreciation. The cost comprises of purchase price, duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

1.5 Depreciation

Depreciation on tangible fixed assets is provided on Straight Line Method in accordance with the rates and in manner specified in Schedule XIV of the Companies Act, 1956.

1.6 Inventories

(i) Trading Goods are valued at Cost or Net Realizable value whichever is lower. Cost is arrived at by using FIFO method.

(ii) Shares and Securities are valued at Cost or Net Realizable value whichever is lower. Cost is arrived at by using FIFO method.

1.7 Cash Flow

The cash flow statement is prepared by the indirect method set out in Accounting Standard-3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposit with banks.

1.8 Revenue Recognition

A. Revenue from sales is recognised at the point of dispatch to the customers when risk and reward stand transfered to the customers. Sales are inclusive of freight wherever it is charged.

B. Dividend income is recognised when the right to receive the dividend is established.

C. Operating and other Interest income on FDR is recognised on the time proportion basis taking into account of the amount outstanding and rate applicable.

D. Shares Transactions

(i) Where share trading purchase and share trading sales is settled within the same settlement, only net gain or loss is booked.

(ii) Where share trading purchase and share trading sales is not settled within the same settlement, each transaction is accounted as purchase and sales.

E. Derivative Transactions in Future and Option

(i) Future or Option transactions in Equity/Index/Currency/Commodity are accounted expiry date wise separately.

(ii) Gain or Loss is accounted on expiry date.

(iii) Contracts for future or option in Equity/Index/Currency/Commodity remaining unsettled at balance sheet date are provided for in case of loss only.

(iv) When future or option contract settled with actual delivery, the same is accounted for respective contract wise as purchase/sales.

F. Other Income

Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exist.

1.9 Purchase

Purchase cost of shares, securities and Units of Mutual Funds does not include other incidental charges except brokerage charges.

1.10 Employee Benefits

Short-term employee benefits are recognized as expenses in the Statement of Profit and Loss of the year in which the related service is rendered at the undiscounted amount as and when it accrues.

Long term employee benefits and post-employment benefits both funded and non-funded are recognized as expenses in the Statement of Profit and Loss of the year in which the related service is rendered based on actuarial valuation.

i. Company's Contribution towards provident fund are accounted for at pre-determined rates and deposited in to an EPFO.

ii. Gratuity is accounted for on the basis of actuarial valuation.

1.11 Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and lows that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

1.12 Provisions, Contingent Liabilities and Contingent Assets

Provision is recognized when there is a present obligation as a result of past event that probably requires an outflow of resources and reliable estimate can be made of the amount of the obligation. Disclosure for Contingent Liabilities is made when there is a possible obligation or a present obligation that may, but probably will not, requires an outflow of resources. No provision is recognized or disclosure for Contingent Liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial statements.

1.13 Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior period is reversed if there has been a change in the estimate of recoverable amount.

1.14 Foreign Currency Transactions

(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies at the year-end are restated at year-end rates.

(c) Any income or expenses on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit and Loss.

(d) Profit/Loss on Forward Rate Agreement taken for hedging interest rate related risk is accounted at the time of starting date of each agreement.

(e) Foreign currency transactions hedged through forward contracts, the premium on such forward contracts is amortised over the life of the contract.

1.15 Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as non-current investments. Current Investments are carried at lower of cost and quoted/fair value determined on category/item wise. Non- current investments are stated at cost. However, Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

1.16 Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Statement of Profit and Loss.


Mar 31, 2011

1) ACCOUNTING CONVENTION:

The Financial Statements are prepared under the historical cost convention and in accordance with the Generally Accepted Accounting Principles (GAAP) in India and applicable provisions of the Companies Act, 1956.

All expenses and income to the extent considered payable and receivable respectively except stated otherwise have been accounted on mercantile basis.

2) SALES, OPERATIONAL AND OTHER INCOME:

(a) Sales:

Sales are recognized on despatch of material and on change of title of the goods and inclusive of freight wherever it is charged.

(b) Operational Income:

Interest on Fixed Deposits is accounted on accrual basis.

(c) Other Income:

Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists.

Dividend income is accounted as and when the right to received is established.

(d) Shares Transaction:

I) Where Shares Trading Purchases and Shares Trading Sales is settled without delivery within the same settlement, only net gain / loss is booked.

ii) Where Shares Trading Purchases and Share Trading Sales is not settled within the same settlement, each transactions of delivery are accounted as purchase & sales.

(e) Derivative Transaction in Future and Option :

i) Future or Option transactions in Equity/Index/Currency/ Commodity are accounted on expiry date wise separately.

ii) Gain or Loss is accounted on expiry date.

iii) Contracts for future or option in Equity/Index/Currency/ Commodity remaining unsettled at balance sheet date are provided for in case of loss only.

iv) When future or option contract settled with actual delivery, the same is accounted for respective contract wise as purchase / sales.

3) FIXED ASSETS & DEPRECIATION:

(a) Fixed Assets are stated at cost. Cost comprises of Purchase Price, duties, levies and any other directly attributable cost of bringing the assets to its working condition for the intended use.

(b) Depreciation on Fixed Assets is provided on straight line method in accordance with the rates and in manner specified in Schedule XIV of the Companies Act, 1956. Pro-rata depreciation is provided in the case of additions / deletions to Fixed Assets.

4) INVENTORIES:

(a) Trading goods are valued at cost or net realizable value which ever is lower. Cost is arrived at by using FIFO method.

(b) Shares and Securities are valued at cost or net realizable value whichever is lower. Cost is arrived by using FIFO method.

5) FOREIGN CURRENCY TRANSACTIONS:

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of transaction. Gains and Losses resulting from the settlement of such transaction and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the profit and loss account.

In case of foreign currency transactions hedged through forward contracts, the premium on such forward contracts is amortised over the life of the contract.

Profit/Loss on Forward Rate Agreement taken for hedging interest rate related risk is accounted at the time of starting date of each agreement.

6) INVESTMENTS:

Investments are classified into current and long- term investments. Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investments.

7) PURCHASE:

Purchase includes cost of raw materials and other items with other incidental expenses excluding excise duty and VAT.

Purchase cost of Shares, Securities and Units of Mutual Fund does not include other incidental charges except brokerage charges.

8) CASH FLOW:

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposits with banks.

9) IMPAIRMENT OF ASSETS:

An Asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged for when an asset is identified as impaired. The impairment loss recognized in prior period is reversed if there has been a change in the estimate of recoverable amount.

10) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision is recognized when there is a present obligation as a result of past event that probably require an out flow of resources and reliable estimate can be made of the amount of the obligation.

Disclosure for contingent liabilities are made when there is possible obligation or a present obligation that may, but probably will not, require an out flow of resources. No provision is recognized or disclosure for contingent liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote.

Contingent Asset is neither recognized nor disclosed in the financial statement.

11) PROVISION FOR CURRENT AND DEFERRED TAX:

a) Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.

b) Deferred tax resulting from "Timing difference" between book profit and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extend that there is a reasonable certainty that the assets will be realized in future.

12) EMPLOYEE BENEFITS:

(i) Short Term Employee Benefits:-

The undiscounted amount of short term employee benefits expected to be paid in exchange for the service rendered by employee is recognized during the period when the employee renders the service.

(ii) Post Employment Benefits:-

Contributions to defined contribution scheme such as Provident Fund etc. are charged to the profit and loss account as incurred. The company also provides for Post Employment Benefits in the form of Gratuity, such benefits are provided in books of accounts for based on valuations as at the balance sheet date, made by independent actuaries.

13) Borrowing Costs : -

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss Account,


Mar 31, 2010

1) ACCOUNTING CONVENTION:

The accounts are prepared under the historical cost convention and on the going concern basis. All expenses and income to the extent considered payable and receivable respectively, except stated otherwise have been accounted for on mercantile basis.

2) SALES AND OTHER INCOME:

(a) Sales:

Sales are recognized on despatch of material and on change of title of the goods and inclusive of freight wherever it is charged.

(b) Other Income:

Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists.

Dividend income is accounted on receipt basis.

(c) Shares Transaction:

i) Where Shares Trading Purchases and Shares Trading Sales is settled without delivery within the same settlement, only net gain / loss is booked.

ii) Where Shares Trading Purchases and Share Trading Sales is not settled within the same settlement, each transactions of delivery are accounted as purchase & sales.

3) FIXED ASSETS & DEPRECIATION:

(a) Fixed assets are capitalized at cost including all direct costs and other expenses including interest incurred in connection with acquisition of assets apportioned thereto.

(b) Depreciation on Fixed Assets is provided on straight line method in accordance with the rates and in manner specified in Schedule XIV of the Companies Act, 1956.

4) INVENTORIES:

(a) Trading goods are valued at cost or net realizable value which ever is lower. Cost is arrived at by using FIFO method.

(b) Shares and Securities are valued at cost or net realizable value whichever is lower.

5) FOREIGN CURRENCY TRANSACTION:

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of transaction. Gains and Losses resulting from the settlement of such transaction and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the profit and loss account.

6) INVESTMENTS :

Investments are classified into current and long- term investments. Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investments.

7) Purchase includes cost of raw materials and other items with other incidental expenses excluding excise duty and VAT. Purchase cost of Shares & Securities does not include other incidental charges except brokerage charges.

8) CASH FLOW:

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard - 3 on Cash Flow Statement and presents cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and balances in current and demand deposits with banks.

9) IMPAIRMENT OF ASSETS:

An Asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged for when an asset is identified as impaired. The impairment loss recognized in prior period is reversed if there has been a change in the estimate of recoverable amount.

10) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision is recognized when there is a present obligation as a result of past event that probably require an out flow of resources and reliable estimate can be made of the amount of the obligation.

Disclosure for contingent liabilities are made when there is possible obligation or a present obligation that may, but probably will not, require an out flow of resources. No provision is recognized or disclosure for contingent liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote.

Contingent Asset is neither recognized nor disclosed in the financial statement.

11) PROVISION FOR CURRENT AND DEFERRED TAX:

a) Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.

b) Deferred tax resulting from "Timing difference" between book profit and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future.

12) EXCISE/ CENVAT/ SERVICE TAX:

(a) Excise duty expenses are inclusive of cenvat benefit availed on inputs and fixed assets.

(b) The Service tax charged by the service providers to the Company and service tax paid on services availed for inward goods transport agencies are taken as credit under Cenvat as per rule wherever applicable.

13) EMPLOYEE BENEFITS:

(i) Short Term Employee Benefits:-

The undiscounted amount of short term employee benefits expected to be paid in exchange for the service rendered by employee is recognized during the period when the employee renders the service.

(ii) Post Employment Benefits:-

Contributions to defined contribution scheme such as Provident Fund etc. are charged to the profit and loss account as incurred. The company also provides for Post Employment Benefits in the form of Gratuity, such benefits are provided for based on valuations as at the balance sheet date, made by independent actuaries.

14 ) MULTI COMMODITY TRANSACTIONS : -

(a) Difference of sales and purchase of different commodities traded is accounted on daily basis, including strike date of relevant transactions.

(b) Gain or loss on each contract of commodities is accounted on expiry date of the relevant contract.

(c) Contract for commodity trade which remains unsettled at balance sheet date is provided for in case of loss .

(d) Delivery of commodity traded taken at expiry of contract is settled by actual delivery and accounted separately.

 
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