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Accounting Policies of Circuit Systems (India) Ltd. Company

Mar 31, 2015

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, the relevant provisions of the Companies Act, 2013.

1.2 Use of Estimates

The preparation of financial statements requires estimates and assumptions which affect the reporting amount of assets, liabilities, revenues and expenses of the reporting period. The difference between the actual results and estimates are recognized in the period in which the results are known or materialized.

1.3 Tangible Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation and impairment loss (if any). Cost comprises of purchase price, non refundable duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

1.4 Intangible Fixed Assets

Intangible Assets are stated at cost of acquisition less accumulated amortization and impairment loss (if any). Cost of acquisition comprises of purchase price, non refundable duties, levies and any directly attributable cost of bringing the intangible assets to its working condition for the intended use.

1.5 Depreciation and Amortization

(i) Tangible Fixed Assets

Depreciation on fixed assets is provided on Straight Line Method in accordance with the useful life specified in schedule II of the Companies Act, 2013.

Lease premium on leasehold land is written off over the period of lease except premium paid for acquiring leasehold land for lease period exceeding 99 years.

(ii) Intangible Fixed Assets

The intangible fixed assets are amortized over useful life of assets specified under Schedule II of Companies Act, 2013.

(ii) Write Offs of Fixed Assets

The Company had depreciated fixed assets at rates specified under Schedule XIV of Companies Act, 1956 till 31 March 2014. However, Schedule II of Companies Act, 2013 requires company to depreciate its assets over its useful-life with effect from 1 April 2014. Accordingly, the company has calculated useful lives of all assets as on 1 April 2014 and depreciated their written down value on their remaining useful lives. However, the written down values of assets, whose useful life has become Nil as on 1 April 2014, are required to be adjusted towards reserves and surplus. The Company has adjusted Rs. 8, 67, 28,201/- towards reserves and surplus of the company. The details of which are available in Note No 2 and Note No 11 to these financial statements. The change in rate of depreciation or useful life of an asset is change in accounting estimate and is therefore applied prospectively with effect from 1 April 2014. The above write off is of exceptional nature and warranted due to change in legal provisions. The same write off is not expected to recur in foreseeable future.

1.6 Inventories

Cost of inventories comprises of cost of purchase and other costs incurred in bringing them to their

respective present location and condition.

(i) Raw Materials are valued at lower of cost (net of refundable taxes and duties) and net realizable values. Cost is derived on FIFO basis.

(ii) Work-in-Progress is valued at lower of conversion cost and net realizable values. Cost are derived on Standard Cost basis

(iii) Stores, Spares and Packing Materials are valued at cost.

1.7 Revenue Recognition

(i) Revenue from sales is recognized at the point of dispatch to the customers when risk and reward stand transferred to the customers. Sales include excise duty but exclusive of sales tax.

(ii) Dividend income is recognized when the company's right to receive the dividend is established.

(iii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

1.8 Employee Benefits

(i) Short term 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.

(ii) Defined Contribution Plans

Defined contribution plans are those plans where the Company pays fixed contribution to a fund managed by independent trusts. Contributions are paid in return for service rendered by employees during the year. The company has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay employee benefits. The Company provides Provident Fund facility to employees. The contributions are expenses as they are incurred in line with the treatment of wages and salaries.

(iii) Defined Benefit Plans

The Company provides Gratuity and Leave Encashment Benefits to its employees. Gratuity liabilities are funded through a separate trust with its funds managed by Life Insurance Corporation of India. The liability towards leave encashment is not funded. The present value of these defined benefit obligations are ascertained by an independent actuarial valuation as per requirement of Accounting Standards 15 - Employee Benefits. The liability recognized in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. All actuarial gain and losses are recognized in the Statement of Profit and Loss in full in the year in which they occur.

1.9 Provision for Taxes on Income

Tax expenses include current tax 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 asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

1.10 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.

1.11 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.

1.12 Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded on initial recognition using the exchange rates prevailing on the date of the transaction or that approximates the actual rate at the date of transaction. Monetary assets and liabilities denominated in foreign currencies at the year-end are restated at rates of exchange prevailing at the balance sheet date. Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss. Premium or discount on forward contracts for hedging foreign currency transactions are amortized and recognized in the statement of profit and loss over the period of the contract.

1.13 Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as long- term investments. Current Investments are carried at lower of cost and fair value. Long Term 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.

1.14 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 the Statement of Profit and Loss.


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, the 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 which affect the reporting amount of assets, liabilities, revenues and expenses of the reporting period. The difference between the actual results and estimates are recognized in the period in which the results are known or materialized.

1.3 Tangible Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation and impairment loss (if any). Cost comprises of purchase price, non refundable duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

1.4 Intangible Fixed Assets

Intangible Assets are stated at cost of acquisition less accumulated amortization and impairment loss (if any). Cost of acquisition comprises of purchase price, non refundable duties, levies and any directly attributable cost of bringing the intangible assets to its working condition for the intended use.

1.5 Depreciation and Amortization

(i) Tangible Fixed Assets

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.

Lease premium on leasehold land is written off over the period of lease except premium paid for acquiring leasehold land for lease period exceeding 99 years.

(ii) Intangible Fixed Assets

Computer Software is amortized over a period of 10 years on pro-rata basis commencing from the year in which software is put to use.

1.6 Inventories

Cost of inventories comprises of cost of purchase and other costs incurred in bringing them to their respective present location and condition.

(i) Raw Materials are valued at lower of cost (net of refundable taxes and duties) and net realizable values. Cost is derived on FIFO basis.

(ii) Work-in-Progress is valued at lower of conversion cost and net realizable values. Cost are derived on Standard Cost basis

(iii) Stores, Spares and Packing Materials are valued at cost.

1.7 Revenue Recognition

(i) Revenue from sales is recognized at the point of dispatch to the customers when risk and reward stand transferred to the customers. Sales include excise duty but exclusive of sales tax.

(ii) Dividend income is recognized when the company''s right to receive the dividend is established.

(iii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

1.8 Employee Benefits

(i) Short term 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.

(ii) Defined Contribution Plans

Defined contribution plans are those plans where the Company pays fixed contribution to a fund managed by independent trusts. Contributions are paid in return for service rendered by employees during the year. The company has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay employee benefits. The Company provides Provident Fund facility to employees. The contributions are expenses as they are incurred in line with the treatment of wages and salaries.

(iii) Defined Benefit Plans

The Company provides Gratuity and Leave Encashment Benefits to its employees. Gratuity liabilities are funded through a separate trust with its funds managed by Life Insurance Corporation of India. The liability towards leave encashment is not funded. The present value of these defined benefit obligations are ascertained by an independent actuarial valuation as per requirement of Accounting Standards 15 - Employee Benefits. The liability recognized in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. All actuarial gain and losses are recognized in the Statement of Profit and Loss in full in the year in which they occur.

1.9 Provision for Taxes on Income

Tax expenses include current tax 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 asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

1.10 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.

1.11 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.

1.12 Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded on initial recognition using the exchange rates prevailing on the date of the transaction or that approximates the actual rate at the date of transaction. Monetary assets and liabilities denominated in foreign currencies at the year-end are restated at rates of exchange prevailing at the balance sheet date. Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss. Premium or discount on forward contracts for hedging foreign currency transactions are amortized and recognized in the statement of profit and loss over the period of the contract.

1.13 Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as long- term investments. Current Investments are carried at lower of cost and fair value. Long Term 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.

1.14 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 the Statement of Profit and Loss.


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 which affect the reporting amount of assets, liabilities, revenues and expenses of the reporting period. The difference between the actual results and estimates are recognized in the period in which the results are known or materialized.

1.3 Tangible Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation and impairment loss (if any). Cost comprises of purchase price, non refundable duties, levies and any directly attributable cost of bringing the assets to its working condition for the intended use.

1.4 Intangible Fixed Assets

Intangible Assets are stated at cost of acquisition less accumulated amortization and impairment loss (if any). Cost of acquisition comprises of purchase price, non refundable duties, levies and any directly attributable cost of bringing the intangible assets to its working condition for the intended use.

1.5 Depreciation and Amortization (i) Tangible Fixed Assets

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.

Lease premium on leasehold land is written off over the period of lease except premium paid for acquiring leasehold land for lease period exceeding 99 years.

(ii) Intangible Fixed Assets

Computer Software is amortized over a period of 10 years on pro-rata basis commencing from the year in which software is put to use.

1.6 Inventories

Cost of inventories comprises of cost of purchase and other costs incurred in bringing them to their respective present location and condition.

(i) Raw Materials are valued at lower of cost (net of refundable taxes and duties) and net realizable values. Cost is derived on FIFO basis.

(ii) Work-in-Progress is valued at lower of conversion cost and net realizable values. Cost are derived

on Standard Cost basis (iii) Stores, Spares and Packing Materials are valued at cost.

1.7 Revenue Recognition

(i) Revenue from sales is recognized at the point of dispatch to the customers when risk and reward stand transferred to the customers. Sales include excise duty but exclusive of sales tax.

(ii) Dividend income is recognized when the company''s right to receive the dividend is established.

(iii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

1.8 Employee Benefits

(i) Short term 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.

(ii) Defined Contribution Plans

Defined contribution plans are those plans where the Company pays fixed contribution to a fund managed by independent trusts. Contributions are paid in return for service rendered by employees during the year. The company has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay employee benefits. The Company provides Provident Fund facility to employees. The contributions are expenses as they are incurred in line with the treatment of wages and salaries.

(iii) Defined Benefit Plans

The Company provides Gratuity and Leave Encashment Benefits to its employees. Gratuity liabilities are funded through a separate trust with its funds managed by Life Insurance Corporation of India. The liability towards leave encashment is not funded. The present value of these defined benefit obligations are ascertained by an independent actuarial valuation as per requirement of Accounting Standards 15 – Employee Benefits. The liability recognized in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognized past service costs. All actuarial gain and losses are recognized in the Statement of Profit and Loss in full in the year in which they occur.

1.9 Provision for Taxes on Income

Tax expenses include current tax 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 asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

1.10 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.

1.11 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.

1.12 Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded on initial recognition using the exchange rates prevailing on the date of the transaction or that approximates the actual rate at the date of transaction. Monetary assets and liabilities denominated in foreign currencies at the year-end are restated at rates of exchange prevailing at the balance sheet date. Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

1.13 Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as long- term investments. Current Investments are carried at lower of cost and fair value. Long Term 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.

1.14 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 the Statement of Profit and Loss.


Mar 31, 2010

1) CONVENTION :

The financial statements are prepared under the historical cost convention in accordance with applicable accounting standard and requirement of the Companies Act, 1956.

2) BASIS OF ACCOUNTING :

The company follows the Mercantile system of Accounting.

3) FIXED ASSETS :

i) Fixed Assets are stated at cost of acquisition and subsequent improvements including taxes, freight and other incidental expenses related to acquisition, installation and foundation less accumulated depreciation (other than leasehold land where no depreciation is charged).

ii) Costs of fixed assets are net of CENVAT to be set off against excise payable on sales, irrespective of actual set-of during the year under review.

iii) Leasehold land will be written off, in the year in which the respective lease period expires.

4) DEPRECIATION:

i) Depreciation on fixed assets has been provided on SLM method as per rates specified in AMENDED SCHEDULE-XIV of the Companies Act, 1956 vide Notification No. GSR: 758(2) dated 16-12-1992 on pro-rata basis.

5) INVENTORIES:

The inventories are valued as under:

i) Stores, Spare parts & Packing material at cost;

ii) Work-in-progress at cost;

iii) The Raw Material has been valued at Lower of cost plus expenses or net realizable Value.

6) IMPORT & EXCISE CENVAT:

i) The purchase cost of raw material & other expenses have been considered net of cenvat remaining unutilized at the year ending;

ii) Costs of fixed assets are net of cenvat, as the said cenvat is to be set off against excise duties payable in sales.

iii) Value of import includes duties, freight, clearing charges, expenses incidental to acquisition.

iv) Increase/ decrease in rupee liability at the end of the year in respect of money borrowed for purchase or construction of fixed assets consequent to fluctuation in exchange rates are treated as addition/ deduction to the fixed assets.

7) SALES & EXPORTS:

Sales are net of sales rejections for the year under review but inclusive of excise duty and sales tax. Rejection quantity of the period under review is not incorporated in Quantitative detail of Production. Sales rejection of the earlier period is charged to profit & loss account as sales rejection & shown separately.

8) EXCISE:

Total excise collected, irrespective of net payment in PLA after adjustment of cenvat, has been considered to work out net income.Excise and service tax credit receivable are considered as per books of accounts but irrespective of actual claims lodged with revenue authorities.

9) WAGES & SALARIES:

Includes PF contribution from employer, salaries to trainees & apprentices and administrative charges paid for such PF Contribution.

10) TAXATION:

Provision for current tax is made on the basis of estimated taxable income for the period in accordance with the provisions of the income Tax Act, 1961. Deferred tax is recognized, subject to consideration of prudence, on timing differences between taxable income and accounting income for the period that originate in one period and are capablereversal in one or more subsequent periods.

11) FOREIGN CURRENCY TRANSACTIONS :

Transactions in foreign currencies are recognized at the prevailing exchange rates on the date of transaction and difference, if any, on realization date is charged to Profit & Loss Account under the head Exchange difference account. Unrealized gains and losses on settlement of foreign currency transactions realized after the year-end are recognized in the Profit and Loss Account at the rate prevailing at the year end. Foreign currency transactions relating to acquisition of fixed assets are adjusted in the cost of the fixed assets.

12) IMPAIRMENT OF ASSETS:

As per the opinion of the management, there being no indication of impairment of assets, no loss has been recognized on impairment of assets.

13) RETIREMENT BENEFITS :

i) Contributions to employees Provident Fund remitted to statutory authority are charged to revenue.

ii) Gratuity benefits wherever applicable are covered by policies taken with the L.I.C. The premium paid under the scheme is charged to revenue. However, the company had made provision for gratuity as per actuarial valuation as required by Accounting Standard - 15.

iii) Liability on leave encashment to employees are provided on actuarial Valuation Report as required by Accounting Standard - 15.

14) PRELIMINARY EXPENSES :

Preliminary expenses are written off in five equal installments. Preliminary expenses on public issue are written off in five equal installments from the year in which Proceeds from the public Issue has been utilized.

15) PREOPERATIVE EXPENSES (SEZ PROJECT)

Revenue and Financial Expenses incurrend and to be incurred upto commencement of commercial production on SEZ project is to be capitalized and will be allocated to the Fixed Assets on the commencement of the commercial production in SEZ Project.

 
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