Home  »  Company  »  Guj. Investa  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Gujarat Investa Ltd. Company

Mar 31, 2015

BASIS OF PREPARATION :

The Company follows the accrual method of accounting. The financial statements have been prepared in accordance with historical cost convention and accounting principles generally accepted in India. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by the Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of Companies Act, 1956 (Companies (Accounting Standards) Rules, 2006, as amended) and other relevant provisions of Companies Act, 2013.

USE OF ESTIMATES :

The preparation of Financial Statements requires the management to make estimates and assumptions in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Further results could differ from these estimates.

ASSETS CLASSIFICATION :

All assets and liabilities have been classified as current or non current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

INFLATION :

Assets and liabilities are recorded at historical cost to the Company (except so far as they relate to (a) revaluation of fixed assets and providing for deprecation on revalued amounts and (b) items covered under "Accounting Standard (AS) - 30" on Financial Instruments; Recognition and Measurement" which have been measured at their fair value). These costs are not adjusted to reflect the changing value in the purchasing power of money.

REVENUE RECOGNITION :

a) Sales are recorded net of trade discounts, rebates and include excise duty, if any. Income from service is recognized as they are rendered based on arrangement/agreements with concerned parties.

b) Revenue from services is recognized based on the services rendered in accordance with the terms of contracts.

VALUATION OF INVENTORY :

Inventories are valued at cost or net realizable value whichever is lower.

FIXED ASSETS AND DEPRECIATION :

Tangible Assets :

Fixed assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses. Cost comprises of all costs incurred to bring the asses to their location and working condition.

Till 1st April, 2014, Depreciation on Fixed Assets was provided on pro rate basis for the period of use on straight line method (SLM) as per rates specified in the Schedule XIV of the Companies Act, 1956.

Effective from 1st April, 2014, the Company depreciates its fixed assets over useful life in the manner prescribed in Schedule II of the Companies Act, 2013.

INTANGILBE ASSETS :

Intangible assets are stated at their cost of acquisition less accumulated amortization and impairment losses. An intangible assets is recognized, where it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where its value/cost can be reliably measured.

IMPARMENT OF ASSETS :

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the assets or where applicable, the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the assets net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss account.

Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased

INVESTMENTS :

Investments are classified as Long Term Investments and Current Investments. Long Term Investments are stated at cost less permanent diminution in value, if any. Current Investments are stated at lower of cost and net realizable value.

Investments in associates are valued at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.

Investments in property, Investments in building that are not intended to be occupied substantially for use by, or in the operations of the Company have been classified as investment property. Investment properties are carried at cost less accumulated depreciation.

DERIVATIVES & COMMODITY HEDGING TRANSACTIONS :

In order to hedge its exposure to foreign exchange, interest rate and commodity price risks, the Company enters into forward, option, swap contracts and other derivative financial instruments. The Company neither hold nor issues any derivatives financial instruments for speculative purposes.

Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and are re-measured at their fair value at subsequent balance sheet dates.

Change in the fair value of derivatives that are designated and qualify as cash flow hedges and are determined to be an effective hedge are recorded in hedging reserve account. To designate a forward contract or option as an effective hedge, management, objectively evaluates evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to hedged risk. Ay cumulative gain or loss on the hedging instrument recognized in hedging reserve is kept in hedging reserve until the forecast transaction occurs or the hedged accounting is discontinued. Amount deferred to hedging reserve are recycled in the Statement of Profit and Loss in the periods when the hedged item is recognized in the Statement of Profit and Loss or when the portion of the gain or loss is determined to be an ineffective hedge.

Derivative Financial instruments that do not qualify for hedge accounting are marked to market at the balance sheet date and gains or losses are recognized in the Statement of Profit and Loss immediately.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in hedging reserve is transferred to profit of Loss for the year.

EMPLOYEE BENEFITS :

The Company's Contributions to State Plans namely Employees Provident Fund, Employee's State Insurance Fund and Employee's Pension Scheme are charged to revenue every year.

No provision for gratuity has been made during the year and the liability for the same has not been ascertained by the company till the end of the accounting year and same will be accounted on cash basis.

BORROWING COST :

Borrowing costs include interest, fees and other charges incurred in connection with the borrowing of funds. It is calculated on the basis of effective interest rate in accordance with Accounting Standard (AS)-30 and considered as revenue expenditure and charged to Statement of Profit and Loss for the year in which it is incurred except for borrowing costs either generally or specifically attributed directly to the acquisition/ improvement of qualifying assets up to the date when such assets are ready for intended use which are capitalized s a part of the Cost of such asset.

TAXES ON INCOME :

Tax expense consists of both current as well as deferred tax. Current tax represent amount of income tax payable including the tax payable U/s 115JB, if any, in respect of taxable income for the year.

Minimum Alternate Tax Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax within the specified period.

Deferred tax is recognized on timing difference between the accounting income and taxable income for the year that originates in one period and capable of reversal in one or more subsequent period. Such deferred tax is quantified using the tax rates and laws enacted or substantively enacted as on the Balance sheet date.

Deferred Tax asset is recognized and carried forward to the extent that there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :

Provisions involving a substantial degree of estimation in measurement are recognized when there is a preset obligation as a result of past events and it is probable that there will be an outflow or resources. Contingent liabilities are not recognized but are disclosed in the accounts by way of a note. Contingent assets are neither recognized nor disclosed in the financial statements.






Mar 31, 2014

BASIS OF PREPARATION

The Company follows the accrual method of accounting. The financial statements have been prepared in accordance with historical cost convention and accounting principles generally accepted in India. The financial Statements comply with the requirements of the Accounting Standards notified under Section 211 (3C) [Companies (Accounting Standards) Rules. 2006, as amended] and other relevant provisions of the Companies Act, 1956

USE OF ESTIMATES

The preparation of Financial Statements requires the management to make estimates and assumptions in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Further results could differ from these estimates.

ASSETS CLASSIFICATION

All assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria set out in the Schedule Vi to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

INFLATION

Assets and liabilities are recorded at historical cost to the Company (except so far as they relate to (a) revaluation of fixed assets and providing for deprecation on revalued amounts and (b) items covered under "Accounting Standard (AS) - 30" on Financial Instruments; Recognition and Measurement" which have been measured at their fair value). These costs are not adjusted to reflect the changing value in the purchasing power of money.

REVENUE RECOGNITION

a) Sales are recorded net of trade discounts, rebates and include excise duty. Income from service is recognized as they are rendered based on arrangement/agreements with concerned parties,

b) Revenue from services is recognized based on the services rendered in accordance with the terms of contracts.

VALUATION OF INVENTORY

Inventories are valued at cost or net realizable value whichever is lower.

FIXED ASSETS AND DEPRECIATION Tangible Assets

Fixed assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses. Cost comprises of all costs incurred to bring the asses to their location and working condition.

Depreciation on Fixed Assets is provided on pro rate basis for the period of use on straight line method (SLM) as per rates specified in the Schedule XIV of the Companies Act, 1956

INTANGILBE ASSETS

Intangible assets are stated at their cost of acquisition less accumulated amortization and impairment losses. An intangible assets is recognized, where it is probable that the future economic benefits attributable to the assets will flow to the enterprise and where its value/cost can be reliably measured.

The Company capitalized software and related implementation costs where it is reasonably estimated that the software have an enduring useful life.

IMPARMENT OF ASSETS

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at balance sheet date there are indications of impairment and the carrying amount of the assets or where applicable, the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the assets net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss account.

Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased

INVESTMENTS

Investments are classified as Long Term Investments and Current Investments. Long Term Investments are stated at cost less permanent diminution in value, if any. Current Investments are stated at lower of cost and net realizable value.

Investments in associates are value at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.

Investments in property, Investments in building that are not intended to be occupied substantially for use by, or in the operations of the Company have been classified as investment property. Investment properties are carried at cost less accumulated depreciation.

DERIVATIVES & COMMODITY HEDGING TRANSACTIONS

In order to hedge its exposure to foreign exchange, interest rate and commodity price risks, the Company enters into forward, option, swap contracts and other derivative financial instruments. The Company neither hold nor issues any derivatives financial instruments for speculative purposes.

Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and are re-measured at their fair value at subsequent balance sheet dates.

Change in the fair value of derivatives that are designated and qualify as cash flow hedges and are determined to be an effective hedge are recorded in hedging reserve account. To designate a forward contract or option as an effective hedge, management, objectively evaluates evidences with appropriate supporting documents at the inception of each contract whether the contract is effective in achieving offsetting cash flows attributable to hedged risk. Ay cumulative gain or loss on the hedging instrument recognized in hedging reserve is kept in hedging reserve until the forecast transaction occurs or the hedged accounting is discontinued. Amount deferred to hedging reserve are recycled in the Statement of Profit and Loss in the periods when the hedged item is recognized in the Statement of Profit and Loss or when the portion of the gain or loss is determined to be an ineffective hedge.

Derivative Financial instruments that do not qualify for hedge accounting are marked to market at the balance sheet date and gains or losses are recognized in the Statement of Profit and Loss immediately.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. If a hedged transaction in no longer expected to occur, the net cumulative gain or loss recognized in hedging reserve is transferred to profit of Loss for the year.

EMPLOYEE BENEFITS

The Company''s Contributions to State Plans namely Employees Provident Fund, Employee''s State Insurance Fund and Employee''s Pension Scheme are charged to revenue every year.

No provision for gratuity has been made during the year and the liability for the same has not been ascertained by the company till the end of the accounting year and same will be accounted on cash basis.

BORROWING COST

Borrowing costs include interest, fees and other charges incurred in connection with the borrowing of funds. It is calculated on the basis of effective interest rate in accordance with Accounting Standard (AS) -30 and considered as revenue expenditure and charged to Statement of Profit and Loss for the year in which it is incurred except for borrowing costs either generally or specifically attributed directly to the acquisition/ improvement of qualifying assets up to the date when such assets are ready for intended use which are capitalized s a part of the Cost of such asset.

TAXES ON INCOME

Tax expense consists of both current as well as deferred tax. Current tax represent amount of income tax payable including the tax payable U/s 115JB, if any, in respect of taxable income for the year.

Minimum Alternate Tax Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax within the specified period.

Deferred tax is recognized on timing difference between the accounting income and taxable income for the year that originates in one period and capable of reversal in one or more subsequent period. Such deferred tax is quantified using the tax rates and laws enacted or substantively enacted as on the Balance sheet date.

Deferred Tax asset is recognized and carried forward to the extent that there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving a substantial degree of estimation in measurement are recognized when there is a preset obligation as a result of past events and it is probable that there will be an outflow or resources. Contingent liabilities are not recognized but are disclosed in the accounts by way of a note. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

1. System of Accounting -

The company generally follows mercantile system of accounting and recognises Income and Expenditure on accrual basis. ii) The financial statements are prepared on historical cost basis and as a going concern, in accordance with normally accepted Accounting principles and the provisions of the Companies Act, 1956 as followed consistently by the company

2. Fixed Assets and Depreciation

A. Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. No revaluation has been made in any fixed assets.

B. Depreciation is charged on fixed assets on following basis:

i) On straight line method applying rates as per schedule XIV of The Companies Act, 1956 for the assets in use for full year.

ii) On the assets added during the year, on pro-rata basis with reference to the date of addition.

3. Investments

All investments are held as Long Term Investments, unless otherwise mentioned and are stated at cost unless there is a permanent fall in the value of investments.

4. Inventories

i) Inventories are valued at cost or net realisable value whichever is lower.

5, Taxation:

(i) Provision for current tax is made on the assessable income computed for the accounting period in accordance with the Income Tax Act, 1961.

(ii) Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, calculated by applying tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets arising mainly on account of business losses and capital losses under tax laws are recognised, only if there is a virtual certainty of its realisation supported by convincing evidence. At each balance sheet date, the carrying amount of deferred tax assets is reviewed to reassure realisation.


Mar 31, 2009

1. System of Accounting

(i) The company generally follows mercantile system of accounting and recognises Income and Expenditure on accrual basis.

ii) The financial statements are prepared on historical cost basis and as a going concern, in accordance with normally accepted Accounting principles and the provisions of the Companies Act, 1956 as followed consistently by the company.

2. Fixed Assets and Depreciation

A. Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. No revaluation has been made in any fixed assets.

B. Depreciation is charged on fixed assets on following basis:

i) On straight line method applying rates as per schedule XIV of The Companies Act, 1956 for the assets in use for full year.

ii) On the assets added during the year, on pro-rata basis with reference to the date of addition.

3. Investments

All investments are held as Long Term Investments, unless otherwise mentioned and are stated at cost, unless there is a permanent fall in the value of investments.

4. Inventories

i) Inventories are valued at cost or net realisable value whichever is lower.

5. Taxation:

(i) Provision for current tax is made on the assessable income computed for the accounting period in accordance with the Income Tax Act, 1961.

(ii) Deferred Tax is recognised, subject to the consideration of prudence, on timing differences, calculated by applying tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets arising mainly on account of business losses and capital losses under tax laws are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. At each balance sheet date, the carrying amount of deferred tax assets is reviewed to reassure realisation.

 
Subscribe now to get personal finance updates in your inbox!