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Accounting Policies of Garg Furnace Ltd. Company

Mar 31, 2015

1.1 Basis of preparation of financial statements

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) .The Company has prepared these Financial Statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules 2006,(as amended) and the relevant provisions of Companies Act, 2013. Financial Statements have been prepared in accordance with historical cost convention on accrual basis.

The Accounting policies adopted in preparation of financial statements are consistent with those of previous year.

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 Schedule III of Companies Act, 2013 .Based on nature of business company has ascertained its operating cycle as 12 months for purpose of current or non current classification of assets and liabilities.

1.2 Use of Estimates:

The presentation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which results are known/materialized.

1.3 Inventories

The inventories are valued at cost or net realizable value whichever is lower. The cost formula used in valuation of different categories is as under:-

i) For Raw-Material - FIFO Method

ii) For Stores & spares - FIFO Method for bought out items and weighted average material cost for inhouse manufactured items.

iii) For Work in Process & - Weighted Average Material Cost Finished Goods Plus Conversion Cost.

iv) For Goods in transit - At Cost plus expenses incurred up to their present condition and location

1.4 Depreciation

Depreciation on Fixed Assets has been provided on straight line method in terms of useful life of the assets specified in Schedule II of Companies Act, 2013

1.5 Investments

Long term Investments are carried at cost less provision, if any for diminution in value which is other than temporary, and Current Investment are carried at lower of cost and fair value.

1.6 Fixed Assets

All fixed assets are stated at cost of acquisition net off Cenvat & VAT including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

1.7 Revenue Recognition

Revenue on sale of products is recognised at the point of despatch of finished goods to the Customers.

1.8 Excise Duty

Excise Duty in respect of goods manufactured by the company is accounted for at the time of removal of goods from the factory for sale and/or captive consumption and provisions are made for finished goods lying in the factory at the year-end.

1.9 Employee's Retirement Benefits

a) Short Term Employee Benefits:

Short Term Employee Benefits are recognized as an expenses on an undiscounted basis in the profit and loss account of the year in which the related service is rendered.

b) Post Employment Benefits:

i) Defined Contribution Plans:

Provident fund:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is charged to the statement of profit and loss..

ii) Defined Benefit Plans Gratuity:

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

c) The actuarial gain/loss is recognized in statement of profit and loss.

1.10 FOREIGN CURRENCY TRANSACTIONS

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary foreign currency items outstanding at the year-end are restated into rupees at the rate of exchange prevailing on the balance sheet date except those covered by forward contracts.

(iii) Non monetary foreign currency items are carried at cost.

(iv) Any income or expense on account of exchange difference either on settlement or on translation is recognized in statement of profit and loss

1.11 Accounting for Taxes on Income :

Current Taxes

Current Tax is determined as the amount of tax payable in respect of taxable income for period after considering tax allowances and exemptions.

Deferred Taxes

Deferred Tax is recognized, subject to consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more accounting period.

Minimum Alternate Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.12 Government Grants

Government Grants are recognised if it is certain that the grants will be received & the conditions attached thereto could reasonably be complied with.

1.13 Impairment of Assets.

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal and external factors an Impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing value,the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.14 Provisions - Contingent Liabilities & Contingent Assets

(i) Provisions involving substantial degree of estimate in measurement is recognized when there is a present obligation arising as a result of past events and it is probable that there will be an outflow of resource embodying economics benefits.

(ii) Contingent Liability is a possible obligation from past event, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise or a present obligation that arises from past events but is not recognized because it is not probable that an outflow embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made. Such a liability is not recognized but is disclosed in the notes.

(iii) Contingent Assets are neither recognized nor disclosed in financial statements.

1.15 Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. There are no Dilutive Potential Shares outstanding during the period, so DEPS is same as BEPS.

1.16 Borrowing Cost

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

(e) The Company presently has one class of Equity Shares having par value of Rs 10 each,holders of Equity shares are entitled to one vote per share. In the Event of liquidation of company,the holders of Equity Shares will be entitled to receive any of the remaining assets of the company after distribution of all preferential amounts. The distribution will be proportion to the number of Equity Shares held by Shareholders


Mar 31, 2013

1.1 Basis of preparation of financial statements

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in lndia(lndian GAAP).The company has prepared these Financial Statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules 2006,(as amended) and the relevant provisions of Companies Act 1956.Financial Statements have been prepared in accordance with historical cost convention on accrual basis.

The Accounting policies adopted in preparation of financial statements are consistent with those of previous year.

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 Schdule-VI of Companies Act 1956.Based on nature of business company has ascertained its operating cycle as 12 months for purpose of current or non current classification of assets and liabilities.

1.2 Use Of Estimates:

The presentation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which results are known/materialized.

1.4 Depreciation

Depreciation has been provided on straight-line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956.

1.5 Investments

Long term Investments are carried at cost less provision, if any for diminution in value which is other than temporary, and Current Investment are carried at lower of cost and fair value.

1.6 Fixed Assets

All fixed assets are stated at cost of acquisition net off Cenvat & VAT including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

1.7 Revenue Recognition

Revenue on sale of products is recognised at the point of despatch of finished goods to the Customers.

1.8 Excise Duty

Excise Duty in respect of goods manufactured by the company is accounted for at the time of removal of goods from the factory for sale and/or captive consumption and provisions are made for finished goods lying in the factory at the year-end.

1.9 Employee''s Retirement Benefits

a) Shoit Term Employee Benefits:

Short Term Employee Benefits are recognized as an expenses on an undiscounted basis in the profit and loss account of the year in which the related service is rendered.

b) Post Employment Benefits.

i) Defined Contribution Plans: Provident fund:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act. 1952 and is charged to the profit and loss account.

ii) Defined Benefit Plans Gratuity

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

c) The actuarial gain/loss is recognized in statement of profit and loss account.

1.10 FOREIGN CURRENCYTRANSACTIONS

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary foreign currency items outstanding at the year-end are restated into rupees at the rate of exchange

prevailing on the balance sheet date except those covered by forward contracts. (iii) Non monetary foreign currency items are carried at cost.

(iv) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit loss account

1.11 Accounting for Taxes on Income: Current Taxes

Current Tax is determined as the amount of tax payable in respect of taxable income For period after considering tax allowances and exemptions. Deferred Taxes

Deferred Tax is recognized, subject to consideration of prudence, on timing differences being the difference between taxable income and accounting income that Originate in one period and capable of reversal in one or more accounting period. Minimum Alternate Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.12 Government Grants

Government Grants are recognised if it is certain that the grants will be received & the conditions attached thereto could reasonably be complied with.

1.13 Impairment of Assets.

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal and external factors an Impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.The recoverable amount is greater of the asset''s net selling price and value in use. In assessing value.the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.14 Provisions and Contingent Liabilities

(i) Provisions involving substantial degree of estimate in measurement is recognized when there is a present obligation arising as a result of past events and it is probable that there will be an outflow of resource embodying economics benefits.

(ii) Contingent Liability is a possible obligation from past event, the existence of which will be confirmed only by the ccurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise or a present obligation that arises from past events but is not recognized because it is not probable that an outflow embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made. Such a liability is not recognized but is disclosed in the notes

1.15 Earning PerShare

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. There are no Dilutive Potential Shares outstanding during the period, so DEPS is same as BEPS.

1.16 Borrowing Cost

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

1.17 Operating Leases

Assets acquired on leases whei in significant portion of risks and rewards Of ownership are retained by the lesser are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on Systematic basis over the term of lease.


Mar 31, 2012

1.1 Basis of preparation of financial statements

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in lndia(lndian GAAP).The company has prepared these Financial Statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules 2006,(as amended) and the relevant provisions of Companies Act 1956.Financial Statements have been prepared in accordance with historical cost convention on accrual basis.

The Accounting policies adopted in preparation of financial statements are consistent with those of previous year.

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 Schdule-VI of Companies Act 1956.Based on nature of business company has ascertained its operating cycle as 12 months for purpose of current or non current classification of assets and liabilities.

1.2 Presentation and disclosure of financial statements

For the year ended 31" March 2012,the revised schedule notified under Companies Act 1956 has become applicable to 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 disclosures made In financial statements.The Company has also reclassified the previous yearfigures In accordance with the requirements applicable in current year.

1.3 Use Of Estimates:

The presentation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which results are known/materialized.

1.4 Inventories

The inventories are valued at cost or net realisable value whichever is lower. The cost formula used in valuation of different categories are as under:-

i) For Raw-Material - FIFO Method

ii) For Stores & spares - FIFO Method for boughtout items & weighted average material cost for inhouse manufactured items.

iii) For Work in Process & Finished Goods - Weighted Average Material Cost Plus Conversion Cost.

iv) For Goods in transit - At Cost plus expenses incurred up to their present condition and location.

1.5 Depreciation

Depreciation has been provided on straight-line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956.

1.6 Investments

Long term Investments are carried at cost less provision, if any for diminution in value which is otherthan temporary, and Current Investment are carried at lower of costand fairvalue.

1.7 Fixed Assets

All fixed assets are stated at cost of acquisition net off Cenvat & VAT including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

1.8 Revenue Recognition

Revenue on sale of products is recognised at the point of despatch of finished goods to the Customers.

1.9 Excise Duty

Excise Duty in respect of goods manufactured by the company is accounted for at the time of removal of goods from the factory for sale and/or captive consumption and provisions are made for finished goods lying in the factory at the year-end.

1.10 Employee's Retirement Benefits

a) Short Term Employee Benefits:

Short Term Employee Benefits are recognized as an expenses on an undiscounted basis in the profit and loss account of the year in which the related service is rendered.

b) Post Employment Benefits:

i) Defined Contribution Plans:

Provident fund:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is charged to the profit and loss account.

ii) Defined Benefit Plans Gratuity:

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

c) The actuarial gain/loss is recognized in statement of profit and loss account.

1.11 FOREIGN CURRENCY TRANSACTIONS

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary foreign currency items outstanding at the year-end are restated into rupees at the rate of exchange prevailing on the balance sheet date except those covered by forward contracts.

(iii) Non monetary foreign currency items are carried at cost.

(iv) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit loss account.

1 Accounting for Taxes on income:

Current Taxes

Current Tax is determined as the amount of tax payable in respect of taxable income for p' od after considering tax allowances and exemptions.

Deferred Taxes

Deferred Tax is recognized, subject to consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more accounting period.

Minimun Alternate Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.13 GovernmentGrants

Government Grants are recognised if it is certain that the grants will be received & the conditions attached thereto could reasonably be complied with.

1.14 Impairment of Assets.

At each balance sheet an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

1.15 Provisions and Contingent Liabilities

(i) Provisions involving substantial degree of estimate in measurement is recognized when there is a present obligation arising as a result of past events and it is probable that there will be an outflow of resource embodying economics benefits.

(ii) Contingent Liability is a possible obligation from past event, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise or a present obligation that arises from past events but is not recognized because it is not probable that an outflow embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made. Such a liability is not recognized but is disclosed in the notes.

1.16 Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. There are no Dilutive Potential Shares outstanding during the period, so DEPS is same as BEPS.

1.17 Borrowing Cost

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

 
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