Accounting Policies of HG Industries Ltd. Company

Mar 31, 2015

1 DISCLOSURE OF ACCOUNTING POLICIES (AS - 1):

1.1 Accounting concepts & Basis of Preparation :

The financial Statements are prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as specified in the Company (Accounting Standards) Rules 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014 and the provisions of the Companies Act, 2013. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The Company's management evaluates all recently issued or revised accounting standards on an on-going basis.

1.2 use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

2 valuation OF inventories (AS - 2):

2.1 Stock of Raw Materials, Consumables and Stores and spare are valued at cost. Cost represents purchase price and other costs for bringing inventories upto their present location and condition and is generally determined on weighted average basis.

2.2 Finished goods are valued at lower of cost and net realisable value.

3 CASH FLOW STATEMENT (AS - 3):

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated. Cash and cash equivalents in the balance sheet comprise cash at bank (excluding pledged term deposits), cash/cheques in hand and short term investments with an original maturity of three months or less.

4 CONTINGENCIES AND EvENTS OCCuRRING AFTER BALANCE Sheet DATE (AS - 4) :

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

5 DEPRECIATION (AS - 6):

5.1 Tangible assets are depreciated on the basis of their useful lives as notified in Schedule II to the Companies Act, 2013. Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period when the assets are ready for use.

6 REVENUE RECOGNITION (AS - 9):

6.1 Revenue from sale of goods and services rendered is recognized from passage of title which generally concides with delivery of materials and rendering of services to the customers.

6.2 Interest income is recognized from time proportion basis taking into account the amount outstanding and rate applicable.

6.3 Rental income is recognised on accrual basis.

7 ACCOUNTING FOR FIXED ASSETS (AS - 10) :

Fixed assets are stated at cost less accumulated depreciation. Cost includes borrowing costs and all incidental expenditure net of CENVAT, Service Tax Input Credit and VAT input credit, wherever applicable.

8 EMPLOYEE BENEFITS (AS - 15):

8.1 Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

8.2 Post Employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of past employment and other long term benefits are charged to the Statement of Profit and Loss.

9 RELATED PARTY DISCLOSURES (AS - 18):

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

10 EARNINGS PER SHARE (AS - 20):

Basic earnings (loss) per share are 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.

For the purpose of calculating diluted earnings 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 effects of all dilutive potential equity shares.

11 ACCOUNTING FOR TAXES ON INCOME (AS - 22):

Income-tax expenses comprises current tax and deferred tax charge or release. The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets based on expected future profits. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Such assets are reviewed as at each Balance Sheet date to reassess realisation.

12 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS - 29):

12.1 Provisions are made for present obligations arising as a result of past events.

12.2 Contingent liabilities are not provided for but are disclosed by way of Notes on Accounts.

12.3 Contingent assets are neither accounted for nor disclosed by way of Notes on Accounts.

13 VAT, SERVICE TAX & EDUCATION CESS

Various expenses are accounted for after deducting the refunds receivable in respect of VAT, Service Tax & Education cess.

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Mar 31, 2014

1 DISCLOSURE OF ACCOUNTING POLICIES (AS - 1):

1.1 Accounting concepts & Basis of Preparation :

The financial Statements are prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the Companies Act, 1956, read with the General Circular number 15/2013 dated 13th September, 2013 in respect of Section 133 of the Companies Act, 2013 and General Circular number 08/2014 dated 04th April 2014 of the Ministry of Corporate Affairs and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The Company''s management evaluates all recently issued or revised accounting standards on an on-going basis. Where changes are made in presentation, the comparative figures of the previous year are regrouped and re-arranged accordingly.

1.2 Use of Estimates :

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

2 VALUATION OF INVENTORIES (AS - 2):

2.1 Stock of Raw Materials, Consumables and Stores and spare are valued at cost. Cost represents purchase price and other costs for bringing inventories upto their present location and condition and is generally determined on weighted average basis.

2.2 Finished goods are valued at lower of cost and net realisable value.

3 CASH FLOW STATEMENT (AS - 3):

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated. Cash and cash equivalents in the balance sheet comprise cash at bank (excluding pledged term deposits), cash/cheques in hand and short term investments with an original maturity of three months or less.

4 CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE (AS - 4) :

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

5. DEPRECIATION (AS - 6):

5.1 Depreciation on Fixed Assets is provided for on straight line method in accordance with and generally at the rates specified in Schedule XIV to the Companies Act, 1956.

5.2 Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period of use of such assets.

6 REVENUE RECOGNITION (AS - 9) :

6.1 Revenue from sale of goods and services rendered is recognized from passage of title which generally concides with delivery of materials and rendering of services to the customers.

6.2 Interest income is recognized from time proportion basis taking into account the amount outstanding and rate applicable.

6.3 Rental income is recognised on accrual basis.

7 ACCOUNTING FOR FIXED ASSETS (AS - 10) :

Fixed assets are stated at cost less accumulated depreciation. Cost includes borrowing costs and all incidental expenditure net of CENVAT, Service Tax Input Credit and VAT input credit, wherever applicable.

8 EMPLOYEE BENEFITS (AS - 15) :

8.1 Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

8.2 Post Employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of past employment and other long term benefits are charged to the Statement of Profit and Loss.

9 RELATED PARTY DISCLOSURES (AS - 18):

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

10 EARNINGS PER SHARE (AS - 20):

Basic earnings (loss) per share are 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.

For the purpose of calculating diluted earnings 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 effects of all dilutive potential equity shares.

11 ACCOUNTING FOR TAXES ON INCOME (AS - 22):

Income-tax expenses comprises current tax and deferred tax charge or release. The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets based on expected future profits. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Such assets are reviewed as at each Balance Sheet date to reassess realisation.

12 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS - 29):

12.1 Provisions are made for present obligations arising as a result of past events.

12.2 Contingent liabilities are not provided for but are disclosed by way of Notes on Accounts.

12.3 Contingent assets are neither accounted for nor disclosed by way of Notes on Accounts.

13 VAT, SERVICE TAX & EDUCATION CESS

Various expenses are accounted for after deducting the refunds receivable in respect of VAT, Service Tax & Education cess.

17.1 DISCLOSURES REGARDING EMPLOYEE BENEFITS :

Defined Contribution Plan: Employee benefits in the form of Provident Fund is considered as defined contribution plan and the contributions to Employees'' Provident Fund Organisation established under The Employees'' Provident Fund and Miscellaneous Provisions Act 1952 , is charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

Defined Benefit Plan : Retirement benefits in the form of Gratuity are considered as defined benefit obligations and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation. Defined Benefit Obligation at the year end amounted to Rs.256729 (previous year Rs.243029).

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

The above information is certified by the actuary.

Para 132 of Accounting Standard 15 (revised 2005) does not require any specific disclosures except where expense resulting from compensated absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard 5 or Accounting Standard 18. In the opinion of the management the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

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Mar 31, 2013

I. Basis of preparation of Financial Statements :

The financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis, except for certain fixed assets which are revalued. GAAP comprises mandatory accounting standards as specified in the Company (Accounting Standards) Rules 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The management evaluates all recently issued or revised accounting standards on an on-going basis. Where changes are made in presentation, the comparative figures of the previous year are regrouped and re-arranged accordingly.

ii. Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Revenue Recognition:

a) Revenue from sale of goods and services rendered is recognized from passage of title which generally concides with delivery of materials and rendering of services to the customers.

b) Interest income is recognized from time proportion basis taking into account the amount outstanding and rate applicable.

iv. Where changes are made in presentation, the comparative figures of the previous year are regrouped accordingly.

v. Figures have been rounded off to the nearest rupee.

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Mar 31, 2012

I. Basis of preparation of Financial Statements :

The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis, except for certain fixed assets which are revalued. GAAP comprises mandatory accounting standards as specified in the Company (Accounting Standards) Rules 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The management evaluates all recently issued or revised accounting standards on an on- going basis. Where changes are made in presentation, the comparative figures of the previous year are regrouped and re-arranged accordingly.

ii. Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

iii. Revenue Recognition:

a) Revenue from sale of goods and services rendered is recognized from passage of title which generally concides with delivery of materials and rendering of services to the customers.

b) Interest income is recognized from time proportion basis taking into account the amount outstanding and rate applicable.

iv. Where changes are made in presentation, the comparative figures of the previous year are regrouped accordingly.

v. Figures have been rounded off to the nearest rupee.

2. FIXED ASSETS:

Capitalised at acquisition cost including directly attributable costs such as freight, insurance, installation charges and incidental expenses for bringing the assets to its working condition for use.

3. INVESTMENTS:

Investments, being long term in nature, are stated at cost of acquisition. Adjustment for increase/ decrease in the value of investments, if any, will be accounted for on realisation of the investments. However, any permanent fall in market value of investments is considered.

4. INVENTORIES:

a) Raw Materials, Consumables, Stores and spare parts and Goods under Process are valued at cost. Cost represents purchase price and other costs for bringing inventories upto their present location and condition and is generally determined on weighted average basis.

b) Finished goods are valued at lower of cost and net realisable value.

5. TAXATION:

Income-tax expenses comprises current tax and deferred tax charge or release. The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets based on expected future profits. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Such assets are reviewed as at each Balance Sheet date to reassess realisation.

6. FOREIGN CURRENCY TRANSACTIONS:

a) Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions.

b) In conformity with revised Accounting Standard (AS - 11), issued by the Institute of Chartered Accountants of India (ICAI), monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the difference between the forward rate and exchange rate on the date of transaction, such difference having been amortised over the life of the contract.

c) Non-monetary items carried at historical cost are reported using the rate at the date of transaction.

d) Other non-monetary items are carried at fair value, are reported using the rate that existed when the fair values were determined.

7. CONTINGENT LIABILITIES :

Contingent Liabilities are not provided for but are disclosed by way of Notes on Accounts.

8. VAT, SERVICE TAX & EDUCATION CESS

Various expenses are accounted for after deducting the refunds receivable in respect of VAT, Service Tax & Education cess.

9. DEPRECIATION:

a) Depreciation on Fixed Assets is provided for on straight line method in accordance with and generally at the rates specified in Schedule XIV to the Companies Act, 1956. The revised rates have been straightaway applied to all existing assets and to those assets acquired during the year.

b) Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period of use of such assets. The provision for depreciation for multiple shifts has been made on the basis of the actual utilisation of respective eligible assets.

10. EMPLOYEE BENEFITS:

a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

b) Post Employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of past employment and other long term benefits are charged to the Profit and Loss Account.

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Mar 31, 2010

1. ACCOUNTING CONCEPTS & BASIS OF PRESENTATION

a) The company follows mercantile system of accounting and recognises income and expenditure on accrual basis except in case of few items stated under the heading "Revenue Recognition" hereinafter. The accounts have been prepared on historical cost basis, as a going concern and are prepared in accordance with generally accepted accounting principles.

b) Where changes are made in presentation, the comparative figures of the previous year are regrouped accordingly.

c) Figures have been rounded off to the nearest rupee.

2. FIXED ASSETS:

Capitalised at acquisition cost including directly attributable costs such as freight, insurance, installation charges and incidental expenses for bringing the assets to its working condition for use.

3. INVESTMENTS:

Investments, being long term in nature, are stated at cost of acquisition. Adjustment for increase/ decrease in the value ofinvestments, if any, will be accounted for on realisation of the investments. However, any permanent fall in market value of investments is considered.

4. INVENTORIES:

a) Raw Materials, Consumables, Stores and spare parts and Goods under Process are valued at cost. Cost represents purchase price and other costs for bringing inventories upto their present location and condition and is generally determined on weighted average basis.

b) Finished goods are valued at lower of cost and net realisable value.

5. TAXATION:

Income-tax expenses comprises current tax and deferred tax charge or release. The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets based on expected future profits. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Such assets are reviewed as at each Balance Sheet date to reassess realisation.

6. FOREIGN CURRENCY TRANSACTIONS:

a) Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions.

b) In conformity with revised Accounting Standard (AS - 11), issued by the Institute of Chartered Accountants of India (ICAI), monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the difference between the forward rate and exchange rate on the date of transaction, such difference having been amortised over the life of the contract.

c) Non-monetary items carried at historical cost are reported using the rate at the date of transaction.

d) Other non-monetary items are carried at fair value, are reported using the rate that existed when the fair values were determined.

7. CONTINGENT LIABILITIES:

Contingent Liabilities are not provided for but are disclosed by way of Notes on Accounts.

8. REVENUE RECOGNITION:

Income and Expenditure are recognised on accrual basis.

9. VAT. SERVICE TAX & EDUCATION CESS:

Various expenses are accounted for after deducting the refunds receivable in respect of VAT, Service Tax & Education cess.

10. DEPRECIATION:

a) Depreciation on Fixed Assets is provided for on straight line method in accordance with and generally at the rates specified in Schedule XIV to the Companies Act, 1956. The revised rates have been straightaway applied to all existing assets and to those assets acquired during the year.

b) Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period of use of such assets. The provision for depreciation for multiple shifts has been made on the basis of the actual utilisation of respective eligible assets.

11. EMPLOYEE BENEFITS:

a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

b) Post Employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of past employment and other long term benefits are charged to the Profit and Loss Account.