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Accounting Policies of BWL Ltd. Company

Mar 31, 2014

A) Basis of preparation of Financial Statement:

The accounts have been prepared in accordance with Indian GAAP under historic cost convention on the assumption of going concern, GAAP enjoins adherences of mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006, guide lines issued by SEBI and specific provisions of Companies Act, 1956 on disclosure & accounting exigencies.

To comply with GAAP, estimate and assumptions are made for factors affecting balances of year end assets and liabilities and disclosure of contingent liabilities. Such estimates change from time to time according to situation and appropriate changes are made with the knowledge of circumstances warranting such changes. Material changes are reported in notes to accounts including disclosures of financial impact there of.

To cater to exigencies of revised schedule VI, assets & liabilities had to be classified under current and non-current categories, identification of the former on the basis of assets & liabilities realizable or payable within normal operating cycle of the company or within a year. Remaining assets and liabilities have categorized as non current.

b) Fixed Assets and Depreciation:

Tangible Assets are stated at cost less depreciation. Cost include inward Freight, Duties (Net of Cenvat and value added tax), Taxes and expenses incidental to Acquisition and Installation. All Expenditure incurred for expansion, modernization and Development of Plant, Machinery and equipment are capitalised. Depreciation on Tangible assets have been provided for on straight line method at the rates specified in Schedule- XIV of the Companies Act, 1956.

No depreciation is provided on Lease- hold Land. Lease hold Land will be amortised in the year of expiry of lease period.

Depreciation on impaired assets is provided by adjusting the depreciation charge in the remaining periods so as to allocate the revised carrying amount of the assets over its remaining useful life.

c) Impairment of Tangible Assets:

1) Assets are tested for impairment on the basis of cash generating unit (CGU) concept. Said assets are held in lower of recoverable value and carrying cost. Recoverable value is the higher of value in use and net selling price. Impairment loss be the excess of carrying cost over recoverable value. Recoverable value is arrived at on balance sheet dates for:-

a) making provision against impairment loss, if any, or

b) Reversing existing provision against impairment loss:

2) Impairment loss, when arises, is apportioned pro- rata on the various heads of tangible assets based on their WDV prior to providing for impairment loss.

d) Inventories are valued at lower of cost and net realizable value. Cost comprises inward freight, duties (Net of cenvat and value added tax) taxes and are calculated in FIFO basis. Where necessary provision has been made for obsolete, slow moving and defective stocks. Cost of Finished goods includes cost of conversion and manufacturing overheads. The discarded assets are held at Scrap Value. Scraps are held at realizable value.

e) Trade Receivable and Loans and advances:

Trade Receivable and Loans and Advances are stated after making adequate provision for doubtful balance.

f) Research and Development expenses

Research and development cost are charged as expenses in the year in which they are incurred.

g) Retirement Benefits:

Company Contributes To Provident And Other Funds, Which Are Administered By Government And Such Contribution Are Charged Against Revenue Retirement Gratuity to Employees is Covered by Group Gratuity Scheme with the Life Insurance Corporation of India by way of payment against the scheme in terms of advice of LIC is charged off to Revenue. Leave Salary is accounted for on the accrual basis on the basis of methodical estimates under taken by the management.

h) Recognition of Income And Expenditure:

i) Sales Are Recognised In The Accounts On Passing Of Title To The Goods, I.E. Delivery As Per Terms of Sale. Sale Comprises Sale Of Goods And Services, Net of Trade Discount, Price Variation Bills have been accounted for in the year of receipt of approval from the customers.

ii). All other Incomes and expenses are accounted for on accrual basis.

I). Lease Rental: Lease Rentals in respect of Leased Assets (excluding land) under arrangement of operational lease have been charged as expenses in Profit & Loss accounts.

j) Provisions, contingent Liabilities & commitment and contingent Assets: Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) the company has a present obligation as a result of a past event,

b) a probable outflow of resources is expected to settle the obligation and

c) the amount of the obligation can be reliably estimated, Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent Liability & commitment is disclosed in the case of a present obligation arising from a past event, when the probable outflow of resources to settle the obligation cannot be determine with reasonable certainty.

Contingent assets are neither recognized nor disclosed. Contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

k) Accounting policies not specifically referred to otherwise are consistent and in accordance with generally accepted accounting principle read with Accounting Standards mandatorised under section 211 (3c) of Company''s Act 1956 and in its absence by IAS.


Mar 31, 2010

A) Accounting Convention :

The Accounts have been prepared as a going concern under historical cost convention on accrual basis in due compliances of accounting standards referred to in section 211 (3c) of the Companies Act, 1956. However OFCD Division has been accounted for as per provision of AS-24 on discontinued operation.

b) Fixed Assets and Depreciation :

Fixed assets are stated at cost less depreciation and cumulative impairement.

Cost Include Inward Freight, Duties (net of Cenvat and Value Added Tax), Taxes And Expenses Incidental To Acquisition And Installation.

All Expenditure Incurred For Expansion, modernisation And Development Of Plant, Machinery And Equipment Are Capitalised.

Depreciation On Fixed Assets Has Been Provided for On Straight Line Method at Rates Specified In Schedule-XIV Of The Companies Act, 1956 except for all plant & machinery of Optical Fiber Cable Division for which depreciation has been provided for on written down value basis (WDV) at the rates and in the manner prescribed in Schedule-XIV of the companies Act 1956.

No Depreciation Is Provided On Lease-Hold Land will be amortised in the year of expiry of Lease Period. Depreciation on impaired assets is provided by adjusting the depreciation charge in the remaining periods so as to allocate the revised carrying amount of the assets over its remaining useful life.

c) Impairment of Fixed Assets :

1) Assets are tested for impairment on the basis of cash generating unit (CGU) concept, assuming OFCD and SWD representing two comprehensive CGUs. Said assets are held in lower of recoverable value and caning cost. Recoverable value is the higher of value in use and net selling price, the latter being deducted on the basis of valuation of realisable values of individual assets. Impairment loss being the excess of carrying cost over recoverable value is arrived at for:

a) making provision against impairment loss if any, or

b) Reversing existing provision against impairment loss.

2) Impairment loss, when arises, is apportioned pro-rata on the various heads of fixed assets based on their WDV prior to providing for impairment loss.

d) Inventories are valued at lower of cost and net realisable value. Cost Comprises Inward Freight, Duties (net of Cenvat and Value Added Tax), Taxes And are Calculated On Fifo Basis. Where Necessary Provisions are Made For Obsolete, Slow Moving And Defective Stocks. Cost of Finished Goods include cost of conversion and manufacturing overheads. Discarded Assets are held at Scrap Value.

e) Sundry Debtors and Loans & Advances :

Sundry Debtors and Loans & Advances are stated after making adequate provision for doubtful balances.

f) Research And Development Expenses :

Research And Development Cost are charged as expenses In The Year In Which they are incurred.

g) Retirement Benefits :

Company Contributes To Provident And Other Funds, Which Are Administrated By Government And Such Contribution Are Charged Against Revenue. Leave salary is accounted for on the accrual basis on the basis of methodical estimates, under taken by the management. Retirement gratuity payable to employees is covered by group gratuity scheme with Life Insurance Corporation of India and companys contribution by way of payment against the scheme in terms of advice of LIC is charged off to revenue.

h) Recognition Of Income & Expenditure :

i) Sales Are Recognised In The Accounts On Passing Of Title To The Goods, I.E., Delivery As Per Terms Of Sale. Sale Comprises Sale Of Goods And Services, Net Of Trade Discount both divisions.

Price Variation Bills Have Been Accounted For In The Year Of Receipt Of Approval From The Customers in case of Steel Wire Division.

ii) All items of Income & Expenses Are Accounted For On Accrual Basis, in AS-9.

i) Foreign Currency Transactions :

Purchase and sales from/to overseas sources are accounted for in reporting currency on the date of transaction. The impact of loss/gain arising on account of difference between the date of transaction and the date of payment are seperately accounted for in revenue account as exchange loss/gain.

j) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if

(a) the Company has a present obligation as a result of a past event,

(b) a probable outflow of resources is expected to settle the obligation and

(c) the amount of the obligation can be reliably estimated. For reimbursement expected in respect of expenditure required to settled, provision is recognised only when it is virtually certain that the reimbursement will be received. -

Contingent Liabilities not provided for but disclosed in the case of a present obligation arising from a past event, when the probable outflow of resources to settle the obligation cannot be determined with reasonable certainty.

Contingent assets are neither recognised nor disclosed. Contingent liabilities and contingent assets are reviewed at each balance sheet date.

k) Accounting Policies, Not Specifically Referred To berein, Are Consistent with Generally Accepted Accounting Principles read with accounting standards mandatorised under section 211 (3c) of companies act, 1956 and in its absence IAS.

 
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