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Accounting Policies of Gujarat Toolroom Ltd. Company

Mar 31, 2014

A) Basis of Preparation

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 read with General Circular 15/2013 dated 13-Sep-2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

b) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and differences between the actual results and the estimates are recognised in the periods in which the results are known / materialised.

c) Current & Non-Current Classification

All the 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 Revised Schedule VI to the Companies Act, 1956. Based on the nature of activities and time between the activities performed and their subsequent realisation in cash or cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.

d) Cash And Cash Equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

f) Inventories

Traded goods are valued at Lower of cost and Net realisable value. Cost includes the purchase price and other associated cost directly incurred in bringing the inventory to its present location.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated costs necessary to make the sale.

g) Prior Period Items

AH identifiable items of Income and Expenditure pertaining to prior period are accounted through "Prior Period items".

h) Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any attributable cost of bringing the asset to working condition for its intended use i.e. cost of acquisition of assets and incidental expenditure incurred upto the date of installation / use. However, since the asset was not in active use by the company and was held for sale, depreciation for the year has not been provided.

i) Revenue Recognition

Revenue is recognized to the extent that probable economic benefits will flow to the company and the revenue can be reliably measured.

i) Sale of Products:

Revenue from sale of products is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer . The company collects sales taxes and value added tax (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included from revenue (gross) and not the entire amount of liability arising during the year.

ii) Other income is recognised when the Company''s right to receive payment is established.

j) Employee Benefits

Employee benefits includes gratuity, compensated absences and contribution to provident fund, employees'' state insurance, superannuation fund.

No provision for employee''s benefits viz. Gratuity, Leave encashment, retrenchment etc for the employees has been made as the same are presently not applicable to the company.

k) Segment Accounting

In accordance with Accounting Standard 17 "Segment Reporting" as prescribed under Companies (Accounting Standards) Rules, 2006 (as amended), the company has determined its business segment as Sale of Moulds. Since, there are no other business segments in which the company operates, there are no other primary reportable segments. Further since the company''s operations are limited within India, it operates in a single geographical segment. Therefore, the segment revenue, results, segment assets, segment liabilities, total cost incurred to acquire segment assets, depreciation charge are all as reflected in the financial statements.

l) Related Party Transactions

Disclosure of transactions with Related Parties, as required by Accounting Standard 18 "Related Party disclosures" prescribed under The Companies (Accounting Standards) Rules, 2006 (as amended) has been set out in a separate note forming part of this schedule. Related Parties as defined under clause 3 of the Accounting Standard 18 have been identified on the basis of representation made by key managerial personnel and information available with the Company.

m) Earnings Per Share

The Company reports basic and diluted earnings per share (EPS) in accordance with the Accounting Standard 20 prescribed under The Companies (Accounting Standards) Rules, 2006 (as amended). The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of

equity shares outstanding during the accounting year. The Diluted EPS has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year.

n) Taxes on Income

I) Deferred Taxation

In accordance with the Accounting Standard 22 - Accounting for Taxes on Income, prescribed under The Companies (Accounting Standards) Rules, 2006 (as amended), the deferred tax for timing differences between the book and tax profits for the year is accounted for by using the tax rates and laws that have been enacted or substantively enacted as of the Balance Sheet Date.

Deferred tax assets arising from timing differences are recognised to the extent there is virtual certainty that the assets can be realised in future.

Net outstanding balance in Deferred Tax account is recognized as deferred tax liability/asset. The deferred tax account is used solely for reversing timing difference as and when crystallized.

II) Current Taxation

In the absense of any taxable income, provision for taxation has not been made in accordance with the income tax laws prevailing for the relevant assessment year.

o) Provisions, Contingent Liabilities and Contingent Assets

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

p) Applicability of other Accounting Standards

Though other Accounting Standards also apply to the company by virtue of the Companies (Accounting Standards) Rules 2006 (as amended), no disclosure for the same is being made as the company has not done any transaction to which the said Accounting Standard apply.


Mar 31, 2012

I) System of Accounting:

The Financial statements are prepared on historical cost convention and on the accounting principles of going concern in accordance with generally accepted accounting principles comprising of the mandatory accounting standards referred to in sub section (3c) of section 211 of the companies Act., 1956 and guidance notes, etc. issued by Institute of chartered Accountants of India and the other provisions of the companies Act.

ii) Revenue Recognition:

All known income and expenditure quantifiable till the date of finalization of accounts are accounted on accrual basis when virtual certainty is established.

(a) Revenue from Operation :

Sales revenue is recognized when property in the goods with all risk rewards and effective control of goods usually associated with ownership are transferred to buyer at price and excludes sales tax.

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

iii) Fixed Asset:

(i) Tangible Asset:

Fixed assets are stated at cost less accumulated depreciation Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

(ii) Intangible Assets :

Intangible assets are stated at cost of purchase/acquired less amortised during period.

iv) Depreciation:

Depreciation has been provided on written down value method accordance with the provision of section 205(2) (b) of Companies Act, 1956 at the rates prescribed in Schedule XIV of the companies Act, 1956 on prorate basis with reference to the day of acquisition/installation. However During the year Depreciation has not provided on Plant & Machinery the loss is under state to the extent of depreciation amount of Rs. 38310/-

v) Impairment of Tangible and intangible assets

The carrying amount of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of any assets exceeds its recoverable amount.

During the year it has been reviewed there is no any impairment of fixed assets.

vi) Investments:

During the year there is no Long term Investments.

vii) Valuation of Inventories:

Stock-in-trade - at cost or net realizable value whichever is less.

Net realizable value is the estimated current procurement price in the ordinary course of eh business. The cost of inventory is determined net of taxes on FIFO or Weighted Average cost formula method on relevant categories of inventories on a consistent basis after providing for obsolete, slow moving and defective inventories wherever necessary.

viii) Cenvat:

VAT Credits: VAT Credit available on purchases input are reduced from purchases and balance at end of the stocks at end of the stocks is carried forward under current asset to avail the credit in the succeeding year.

ix) Provisions and Contingent liabilities:

Provisions are recognized when the present obligation of the past event gives rise to a probable outflow embodying economic benefits on settlement, and the amount of obligation can be reliably estimated.

Contingent liabilities are disclosed after careful evaluation of facts and legal aspects of the matter involved.

Provisions and contingent liability are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

x) Retirement Benefits:

No provision for retirement's benefits viz. Gratuity, leave encashment, retrenchment etc for the employee has been made as there are no eligible employees on the muster roll entitle of these benefits.

xi) Research & Development:

No research and development expenditure has been incurred during the year.

xii) Miscellaneous Expenditure:

In accordance with the provisions of section 35D of Income Tax Act 1961, the company has written off one- tenth of expenses.

xiii) Provision for current and Deferred Tax:

Taxes on Income are computed using tax deferral Assets or Liability method where taxes accrue in the same period, the respective revenue and expenses arises. The differences that result between the profit offered for income tax and the profit as per financial statements are identified and Deferred Tax Liability is recognized for timing difference, that originate in one accounting period and reverse in another based on the tax effect of the prevailing enacted regulation in force.

Deferred Tax Assets are recognized subject to prudence, only, if there is reasonable certainty that they will be realized and are subject to appropriate reviews at each balance sheet date for the purpose of measurement of Deferred Tax Liability or Assets, the applicable tax rates and enacted regulations expected to apply in the year in which the temporary differences are expected to be recovered or settled are applied.

Minimum Alternative 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 furnishing the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India the said asset is created by way of credit to the profit and loss statement and shown as MAT Credit entitlement.

xiv) Borrowing Cost:

Borrowing cost directly attributable and/or funds borrowed generally and used for the purpose of acquisition of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized, at its capitalization rate to expenditure on that assets, for the period, until all activities necessary to prepare qualifying assets for its intended use are complete.

xv) Sundry Debtors:

No provision has been made for the bad and doubtful debts. The Bad debts are charged to revenue in the year of, as and when they arise.

xvi) Earning per Share

Basic Earning Per share are calculated by dividing the net profit or loss for the period attributable to equity share holders by the number of equity shares outstanding during the period.

For the purpose of calculation diluted earning per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential shares.

xvii)Cash and cash equivalents for the propose of cash flow statement comprise of cash at bank, cash in hand and short term tern deposit in bank with in original maturity of 12 months or less


Mar 31, 2010

(i) System of Accounting

The Financial statements are prepared on historical cost basis and on the accounting principles of going concern in accordance with generally accepted accounting principles comprising of the mandatory accounting standards referred to in sub section (3c) of section 211 of the companies Act., 1956 and guidance notes, etc. issued by Institute of chartered Accountants of India and the other provisions of the companies Act.

(ii) Revenue Recognition

All known income and expenditure quantifiable till the date of finalization of accounts are accounted on accrual basis when virtual certainty is established.

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

(iii) Fixed Asset: Cost of Fixed assets comprises of its purchase price including duties and other non refundable taxes or levies, expenditure incurred in the course of construction or acquisition and any directly attributable costs of bringing the asset to its working condition for the purpose of use for the business.

(iv) Depreciation:

Depreciation has been provided on written down value method accordance with the provision of section 205(2)

(b) of Companies Act, 1956 at the rates prescribed in Schedule XIV of the companies Act, 1956 on prorate basis

with reference to the day of acquisition/ installation. (v) Investments:

During the year there is no Long term Investments. (vi) Valuation of Inventories:

Stock-in-trade - at cost or net realizable value whichever ig less

The cost of inventory is determined net of taxes on FIFO or Weighted Average cost formula method on relevant categories of inventories on a consistent basis after providing for obsolete, slow moving and defective inventories wherever necessary.

(vii) Cenvat:

VAT Credits: VAT Credit available on purchases input are reduced from purchases and balance at end of the stocks at end of the stocks is carried farword under current asset to avail the credit in the succeeding year.

(viii) Provisions and Contingent liabilities:

Provisions are recognized when the present obligation of the past event gives rise to a probable outflow embodying economic benefits on settlement, and the amount of obligation can be reliably estimated. Contingent liabilities are disclosed after careful evaluation of facts and legal aspects of the matter involved.

Provisions and contingent liability are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(ix) Retirement Benefits.

As there are no permanent employees during the year hence no specific comment on the retirement benefits to the employees.

(x) Research & Development

No research and development expenditure has been incurred during the year.

(xii) Provision for current and Deferred Tax:

Deferred Tax Assets are recognized subject to prudence, only, if there is reasonable certainty that they will be realized and are subject to appropriate reviews at each balance sheet date for the purpose of measurement of Deferred Tax Liability or Assets, the applicable tax rates and enacted regulations expected to apply in the year in which the temporary differences are expected to be recovered or settled are applied. (xiii) Impairment of Assets:

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is recognized as an expense.

 
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