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Accounting Policies of Competent Automobiles Co Ltd. Company

Mar 31, 2015

1. Accounting Convention

The company adopts the historical cost convention on the accrual basis in preparing the accounts in accordance with generally accepted accounting principles in India and applicable statutes and comply with the Accounting Standards specified under the Companies Act 1956, {which are deemed to be applicable as per Section 133 of companies Act 2013, read with Rule 7 of Companies (Accounts )Rules ,2014} and the other relevent provisions of the 1956 Act /2013 Act as Applicable .

All Assets and liabilities have been classified as Current and Non Current as per Company''s normal operating cycle and other criteria set out in the Schedule III of The Companies Act, 2013.

1.1 Tangible Assets

a) Fixed Assets are stated at their original cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition and installation of the concerned assets. The amount of capital expenditure which has not been attributed to the assets and pending for capitalization are shown as Capital Work in progress.

b) Depreciation on Fixed Assets is provided based on useful life of the assets as prescribed in the Schedule -II to the Companies Act 2013 , and charged on the basis of written down Value Method .

c) The vehicles purchased for the purpose of test drive are treated as an asset of the Company and depreciation is charged accordingly.

1.2 Inventories

Cost of the Inventories are valued on the basis given below:

(i) Cost of finished goods are measured at cost or market value which ever is lower.

(ii) Cost of Spare Parts and Accessories, Oils and Lubricants are measured at cost on FIFO basis.

1.3 Investments

Current Investment are stated at the lower of cost or fair value . Non current Investments are valued at cost of acquisition, less provisions for diminution, as necessary, if any.

1.4 Lease

Lease Rentals for operating lease are charged to statement of profit and loss on accrual basis in accordance with the respective lease agreements.

1.5 Segment Accounting

The accounting policies adopted for segment reporting are in accordance with the Accounting Standards -17 " Segment Reporting" issued by The Institute of Chartered Accountants of India. Segment revenue and expenses include amounts which can be directly identifiable to the segment on reasonable basis.

1.6 Taxation

Provision for Income Tax comprises of the current tax and deferred tax charge or release. Current income tax is measured on the basis of taxable profits computed for current accounting period at the applicable rate of tax in accordance with The Income Tax Act, 1961. Deferred tax is recognized subject to consideration of prudence on timing difference between taxable profits and book profit that originate in one period and are capable of reversal in one or more subsequent periods(s). Deferred tax assets are represented by unabsorbed depreciation and carry forward business losses are not recognized unless there is " Virtual certainity" that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1.7 Foreign Exchange Transactions

Transactions denominated in foreign exchange , if any, are recorded at the exchange rate prevailing on the date of the transaction. Monetary items are translated at the exchange rate prevailing at the end of the year.

1.8 Employee Benefits

In respect of payment of gratuity to employees, the contributions are being made to the trust established under the Group Gratuity Scheme of Life Insurance corporation of India. The premium and the contribution paid every year are charged to the revenue. Leave encashment is provided on the basis of earned leave standing to credit of employees and the same is discharged by the Company by the end of the year and accounted for on actual payment basis. Ex-Gratia is accounted for on actual payment basis.

1.9 Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations include sale of goods and services adjusted for discount (Net). Interest income is recognized on time proportion basis taking in to account the amount outstanding and applicable.

1.10 Impairment of Assets

Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not berecoverable. An impairment loss is recognized for the amount by which the asset carrying amount exceeds is its reco-verable amount. The recoverable amount is the higher of the assets fair value minus the cost to sell and value in use.

1.11 Borrowing Cost

Borrowing cost that is attributable to the acquisition , construction or production of qualifying assets is capitalized as part of cost of such asset. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing cost is recognized as an expense in the Profit and Loss Account in the period in which they are incurred.

1.12 Earning per Share

The earnings considered in ascertaining the Earnings per Share (EPS) comprise the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

1.13 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an out flow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2014

1. Accounting Convention

The company adopts the historical cost convention on the accrual basis in preparing the accounts in accordance with generally accepted accounting principles in India and applicable statutes and comply with the Accounting Standards referred in Section 211 (3C) Companies (Accounting Standards) Rules 2006, as amended and the other relevant provisions of The Companies Act, 1956.

All Assets and liabilities have been classified as Current and Non Current as per Company''s normal operating cycle and other criteria set out in the Revised Schedule VI of The Companies Act, 1956.

1. 1 Tangible Assets

a) Fixed Assets are stated at their original cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition and installation of the concerned assets. The amount of capital expenditure which has not been attributed to the assets and pending for capitalization are shown as Capital Work in progress.

b) Depreciation on fixed assets is provided on written down value method at the rates prescribed in the schedule XIV of The Companies Act, 1956 on pro rata basis.

c) The vehicles purchased for the purpose of test drive are treated as an asset of the Company and depreciation is charged accordingly.

1. 2 Inventories

Cost of the Inventories are valued on the basis given below: (i) Cost of finished goods are measured at cost or market value which ever is lower. (ii) Cost of Spare Parts and Accessories, Oils and Lubricants are measured at cost on FIFO basis.

1. 3 Investments

Investments are valued at cost of acquisition, less provisions for diminution, as necessary, if any.

1. 4 Segment Accounting

The accounting policies adopted for segment reporting are in accordance with the Accounting Standards -17 " Segment Reproting" issued by The Institute of Chartered Accountants of India. Segment revenue and expenses include amounts which can be directly indentifiable to the segment or on reasonable basis.

1. 5 Taxation

Provision for Income Ta x comprises of the current tax and deferred tax charge or release. Current income tax is measured on the basis of taxable profits computed for current accounting period at the applicable rate of tax in accordance with The Income Tax Act, 1961. Deferred tax is recognized subject to consideration of prudence on timing difference between taxable profits and book profit that originate in one period and are capable of reversal in one or more subsequent periods(s). Deferred tax assets are represented by unabsorbed depreciation and carry forward business losses are not recognized unless there is " Virtual certainity" that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1. 6 Foreign Exchange Transactions

Transactions denominated in foreign exchange , if any, are recorded at the exchange rate prevailing on the date of the transaction. Monetary items are translated at the exchange rate prevailing at the end of the year.

1. 7 Employee Benefits

In respect of payment of gratuity to employees, the contributions are being made to the trust established under the Group Gratuity Scheme of Life Insurance corporation of India. The premium and the contribution paid every year are charged to the revenue. Leave encashment is provided on the basis of earned leave standing to credit of employees and the same is discharged by the Company by the end of the year and accounted for on actual payment basis. Ex-Gratia is accounted for on actual payment basis.

1. 8 Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations include sale of goods and services adjusted for discount (Net). Interest income is recognized on time proportion basis taking in to account the amount outstanding and applicable.

1. 9 Impairment of Assets

Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset carrying amount exceeds is its recoverable amount. The recoverable amount is the higher of the assets fair value minus the cost to sell and value in use.

1.10 Borrowing Cost

Borrowing cost that is attributable to the acquisition, construction or production of qualifying assets is capitalized as part of cost of such asset. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing cost is recognized as an expense in the Profit and Loss Account in the period in which they are incurred.

1.11 Earning per Share

The earnings considered in ascertaining the Earnings per Share (EPS) comprise the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

1.12 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an out flow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2013

1. Accounting Convention

The company adopts the historical cost convention on the accrual basis in preparing the accounts in accordance with generally accepted accounting principles in India and applicable statutes and comply with the Accounting Standards referred in Section 211 (3C) Companies (Accounting Standards) Rules 2006, as amended and the other relevant provisions of The Companies Act, 1956.

All Assets and liabilities have been classified as Current and Non Current as per Company''s normal operating cycle and other criteria set out in the Revised Schedule VI of The Companies Act, 1956.

1. 1 Tangible Assets

a) Fixed Assets are stated at their original cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition and installation of the concerned assets. The amount of capital expenditure which has not been attributed to the assets and pending for capitalization are shown as Capital Work in progress.

b) Depreciation on fixed assets is provided on written down value method at the rates prescribed in the schedule XIV of The Companies Act, 1956 on pro rata basis.

c) The vehicles purchased for the purpose of test drive are treated as an asset of the Company and depreciation is charged accordingly.

1. 2 Inventories

Cost of the Inventories are valued on the basis given below:

(i) Cost of finished goods are measured at cost or market value which ever is lower.

(ii) Cost of Spare Parts and Accessories, Oils and Lubricants are measured at cost on FIFO basis.

1. 3 Investments

Investments are valued at cost of acquisition, less provisions for diminution, as necessary, if any.

1. 4 Segment Accounting

The accounting policies adopted for segment reporting are in accordance with the Accounting Standards -17 ''Segment Reproting” issued by The Institute of Chartered Accountants of India. Segment revenue and expenses include amounts which can be directly identifiable to the segment or allocable on a reasonable basis.

1. 5 Taxation

Provision for Income Ta x comprises of the current tax and deferred tax charge or release. Current income tax is measured on the basis of taxable profits computed for current accounting period at the applicable rate of tax in accordance with The Income Ta x Act, 1961. Deferred tax is recognized subject to consideration of prudence, on timing difference between taxable profits and book profit that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are represented by unabsorbed depreciation and carry forward business losses are not recognized unless there is '' Virtual Certainty” that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1. 6 Foreign Exchange Transactions

Transactions denominated in foreign exchange , if any, are recorded at the exchange rate prevailing on the date of the transaction. Monetary items are translated at the exchange rate prevailing at the end of the year.

1. 7 Employee Benefits

In respect of payment of gratuity to employees, the contributions are being made to the trust established under the Group Gratuity Scheme of Life Insurance Corporation of India. The premium and the contribution paid every year are charged to the revenue. Leave encashment is provided on the basis of earned leave standing to credit of employees and the same is discharged by the Company by the end of the year and accounted for on actual payment basis.

1. 8 Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations include sale of goods and services adjusted for discount (Net). Interest income is recognized on time proportion basis taking in to account the amount outstanding and applicable.

1. 9 Impairment of Assets

Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset carrying amount exceeds is its recoverable amount. The recoverable amount is the higher of the assets fair value minus the cost to sell and value in use.

1.10 Borrowing Cost

Borrowing cost that is attributable to the acquisition , construction or production of qualifying assets is capitalized as part of cost of such asset. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing cost is recognized as an expense in the Profit and Loss Account in the period in which they are incurred.

1.11 Earning per Share

The earnings considered in ascertaining the Earnings per Share (EPS) comprise the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

1.12 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an out flow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2012

1. Accounting Convention

The company adopts the historical cost convention on the accrual basis in preparing the accounts in accordance with generally accepted accounting principles in India and applicable statutes and comply with the Accounting Standards referred in Section 211 (3C) Companies (Accounting Standards) Rules 2006, as amended and the other relevant provisions of The Companies Act, 1956.

All Assets and liabilities have been classified as Current and Non Current as per Company's normal operating cycle and other criteria set out in the Revised Schedule VI of The Companies Act, 1956.

1. 1 Tangible Assets

a) Fixed Assets are stated at their original cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition and installation of the concerned assets. The amount of capital expenditure which has not been attributed to the assets and pending for capitalization are shown as Capital Work in progress.

b) Depreciation on fixed assets is provided on written down value method at the rates prescribed in the schedule XIV of The Companies Act, 1956 on pro rata basis.

c) The vehicles purchased for the purpose of test drive are treated as an asset of the Company and depreciation is charged accordingly.

1. 2 Inventories

Cost of the Inventories are valued on the basis given below:

(i) Cost of finished goods are measured at cost or market value which ever is lower.

(ii) Cost of Spare Parts and Accessories, Oils and Lubricants are measured at cost on FIFO basis.

1. 3 Investments

Investments are valued at cost of acquisition, less provisions for diminution, as necessary, if any.

1. 4 Segment Accounting

The accounting policies adopted for segment reporting are in accordance with the Accounting Standards -17 " Segment Reproting" issued by The Institute of Chartered Accountants of India. Segment revenue and expenses include amounts which can be directly indentifiable to the segment or allocable on a reasonable basis.

1. 5 Taxation

Provision for Income Tax comprises of the current tax and deferred tax charge or release. Current income tax is measured on the basis of taxable profits computed for current accounting period at the applicable rate of tax in accordance with The Income Tax Act, 1961. Deferred tax is recognized subject to consideration of prudence, on timing difference between taxable profits and book profit that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are represented by unabsorbed depreciation and carry forward business losses are not recognized unless there is " Virtual Certainty" that sufficient future taxable income will be available against which such deferred tax assets can be realized.

1. 6 Foreign Exchange Transactions

Transactions denominated in foreign exchange , if any, are recorded at the exchange rate prevailing on the date of the transaction. Monetary items are translated at the exchange rate prevailing at the end of the year.

1. 7 Employee Benefits

In respect of payment of gratuity to employees, the contributions are being made to the trust established under the Group Gratuity Scheme of Life Insurance Corporation of India. The premium and the contribution paid every year are charged to the revenue. Leave encashment is provided on the basis of earned leave standing to credit of employees and the same is discharged by the Company by the end of the year and accounted for on actual payment basis. Ex-Gratia is accounted for on actual payment basis.

1. 8 Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations include sale of goods and services adjusted for discount (Net). Interest income is recog- nized on time proportion basis taking in to account the amount outstanding and applicable.

1. 9 Impairment of Assets

Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset carrying amount exceeds is its recoverable amount. The recoverable amount is the higher of the assets fair value minus the cost to sell and value in use.

1.10 Borrowing Cost

Borrowing cost that is attributable to the acquisition, construction or production of qualifying assets is capitalized as part of cost of such asset. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing cost is recognized as an expense in the Profit and Loss Account in the period in which they are incurred.

1.11 Earning per Share

The earnings considered in ascertaining the Earnings per Share (EPS) comprise the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

1.12 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an out flow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

1. Accounting Convention

The company adopts the historical cost convention on the accrual basis in preparing the accounts in accordance with the requirements of the Companies Act, 1956 and applicable statutes and comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

2. Fixed Assets

a) Fixed assets are stated at their original cost of acquisition including taxes, duties, freight and other incidental expenses related to acquisition and installation of the concerned assets. The amount of capital expenditure which has not been attributed to the assets and pending for capitalization are shown as Capital Work in Progress.

b) Depreciation on fixed assets is provided on written down value method at the rates prescribed in the schedule XIV of the Companies Act, 1956 on pro rata basis.

c) The vehicles purchased for the purpose of test drive are treated as an asset of the Company and depreciation charged accordingly.

3. Inventories

Items of the inventories are valued on the basis given below:

(i) Finished Goods: At cost or market value whichever is lower.

(ii) Consumable stores, Oils, Lubricants & Accessories: At cost on FIFO basis.

(iii) Spare parts: At cost on FIFO basis.

(iv) Work -in- progress: At estimated cost or realizable value, whichever is lower. Cost being determined on the basis of spare parts consumed/issued on vehicles under going repairs /service at the closing of the financial year.

4. Investments

Investments are stated at cost, if any.

5. Segment Accounting

The accounting policies adopted for segment reporting are in accordance with the Accounting Standard 17 "Segment Reporting" issued by the Institute of Chartered Accountants of India. Segment revenue and expenses include amounts, which can be directly identifiable to the segment or allocable on a reasonable basis.

6. Taxation Accounting

a) Provision for income tax comprises of the current tax and deferred tax charge or release. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act 1961.Deferred Tax is recognized subject to consideration of prudence, on timing differences, being difference be- tween taxable and accounting Income / Expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred Tax Assets are not recognized unless there is "Virtual Certainty" that suffi- cient future taxable income will be available against which such deferred tax assets will be realize.

7. Foreign Exchange Transactions

Transactions in foreign exchange, if any, are recorded at the exchange rate prevailing on the date of the transaction. Monetary items are translated at the exchange rate prevailing at the end of the year.

8. Retirement Benefits

In respect of payment of gratuity to employees, the contributions are being made to the trust established under the Group Gratuity Scheme of Life Insurance Corporation of India. The premium and the contribution paid every year are charged to revenue.

Leave encashment is provided on the basis of earned leave standing to the credit of the employees and the same is discharged by the Company by the end of the year and accounted for on actual payment basis. Ex-gratia is accounted for on actual payment basis.

9. Revenue Recognition

Income and expenditure are accounted for on accrual basis.

10. Impairment of Fixed Asset

Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the Assets carrying amount exceeds is recoverable amount. The recoverable amount is the higher of the assets fair value less cost to sell and value in use.

11. Borrowing Cost

Borrowing cost that is attributable to the acquisition, construction or production of qualifying assets is capitalized as part of cost of such asset. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing cost is recognized as an expense in the period in which they are incurred.

12. Earnings Per Share

The earnings considered in ascertaining the Earnings per share (EPS) comprise the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares.

 
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