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Accounting Policies of Jullundur Motor Agency (Delhi) Ltd. Company

Mar 31, 2015

A. Basis of Preperation of financial statements

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles (GAAP) in compliance with the provisions of The Companies Act 2013 (the Act) and the applicable Accounting Standards.

B Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and restimate are recognised in the period in which the results materialise.

C. Fixed Assets

a. Tangible, Non current Fixed Assets

(i) Fixed assets are shown in accounts at historical cost less depreciation. Improvement to fixed assets which have the effect of increasing the future benefits from the existing assets beyond its previously assessed standrad of performance is included in the gross block

(ii) Leasehold land : land acquired under long term lease is classified under "tangible assets".

(iii) Tangible assets not ready for the intened use on the date of the Balance Sheet are disclosed as " capital work in progress".

b. Intangible assets

(i) Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.

(ii) Intangible assets are stated at original cost less accumulated amortisation.

(iii) Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as " Intangible assets under development"'

D. Depreciation and amortisation

Depreciation on tangible assets except building and plant and machinery is provided on the written down value basis at the rates as derived, based on the useful life of the assets as specified in Schedule II to the Companies Act, 2013.

Depreciation on building and plant and machinery is provided on straight line basis at the rates as derived, based the useful life of the assets as specified in Schedule II to the Companies Act, 2013.

Land acquired under long term lease is amortised over the period of lease.

Intangible assets are amortised on straight line method over the estimated useful life.

E. Investments

Long term investments are carried at cost. However if there is a decline other than temporary in the value of such investments, the carrying amount is reduced to recongnise the decline. Current investments are carried at lower of cost and fair value.

F. Inventories

Finished goods and Goods in transit are valued at cost or estimated realizable value whichever is lower. Cost includes related overheads.

G. Revenue Recognition

a. Revenue from sale of goods is recognised when substantial risks and rewards of ownership are transferred to the buyer. The sales are reflected net of applicable tax, returns and trade discounts.

b. Others operational revenue represents income earned from activities incidental to the business and is recognised when right to receive the income is established.

c. Other Income

Interest income is accrued at the applicable interest rate.

Dividend and other income is recognised in the period in which the right to receive the same is established

H. Purchases

Purchases are net of incentive and commission received from suppliers and include claims rejected and goods short received. Incentive and commission from principals are recognised as and when no significant uncertainty exists regarding their collectability.

1. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at exchange rates prevailing on the date of respective transactions.

J. Employees benefits

a. Short term employee benefits : All employee benefits due wholly within twelve months of rendering of services are classified as short term employee benefits. Benefits like salaries, wages, leave salary, contribution to Provident Fund/ Employee State Insurance contributions etc. paid or payable during the reporting period and the expected cost of bonus are recognised in the period in which the employee renders the related service. b . Post -employment benefits

(i). Defined Contribution Plan : The State governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid /payable under the schemes is recognised during the period in which employee renders the related service.

2. Defined Benefit Plan

(a) The Company's Gratuity is Defined Benefit Plan. The Company 's Liability towards Gratuity is determined using the Projected Unit Credit Method which recognises each period of service as giving rise to additional unit of Employee Benefit Entitlement. The Gratuity scheme is operated through Group Gratuity Scheme of LIC.

(b) The liabilities are provided based on Actuarial Valuation certified by LIC. Actuarial gains and losses are recognised in statement of profit and loss.

K. Taxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the aggregate amount of income tax determined to be payable in respect of taxable income for the period. Deferred tax is the tax effect of timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

L. Provision and Contingencies Liabilities

i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past event.

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and

c) the amount of the obligation can be reliably estimated.

Contingent liability is disclosed in case there is ;

ii) a) possible obligation that arises from past events and 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

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations ; or

(ii) a reliable estimate of the amount of the obligation cannot be made.

M. Impairment of Assets

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

N. Earning per share (EPS)

Basic EPS 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 the during the year.

O. Leases

Lease payments under an operating lease are recognised as an expense in the statement of profit and loss on straight line basis over the lease term unless another systematic basis is more representative of the time pattern of the users' benefits.


Mar 31, 2014

A) Accounting convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 and other relevant provisions of the said Act. ''

b) Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised on the period in which the results materialise.

c) Fixed assets

Fixed assets are shown in accounts at historical cost less depreciation. Improvement to fixed assets which have the effect of increasing the future benefits from the existing assets beyond its previously assessed standard of performance are included in the gross block.

d) Depreciation

Depreciation on building,plant and machinery is provided for on Straight Line basis and on other fixed assets on Written Down Value basis as per the rates specified in Schedule XIV to the companies Act, 1956.

e) Intangible assets

Intangible Assets are stated at cost less accumulated amount of amortisation.

f) Amortisation

Lease hold Land is amortised over the period of lease. Intangible assets are amortised on straight line method over the estimated useful life.

g) Inventories

Finished goods and Goods in Transit are valued at cost or estimated realizable value whichever is lower.

h) Investments

Long Term Investments are carried at Cost. However if there is a decline other than temporary in the value of long term investments, the carrying amount is reduced to recognise the decline. Current investments are carried out at lower of cost and fair value.

i) Employees benefits

1. Defined Contribution Plan

The Company''s Provident Fund Scheme and ESI plans are defined Contribution Plans and the Company''s Contribution paid/ payable is recognised as expense in the Statement of Profit and Loss during the period in which the employees render the related service.

2. Defined Benefit Plan

(a) The Company''s Gratuity is Defined Benefit Plan. The Company ''s Liability towards Gratuity is determined using the Projected Unit Credit Method which recognises each period of service as giving rise to additional unit of Employee Benefit Entitlement. The Gratuity scheme is operated through Group Gratuity Scheme of Lie.

(b) The liabilities are provided based on Actuarial Valuation certified by LIC. Actuarial gains and losses are charged to Profit and Loss Account.

j) Sales and other income

Revenue from sale of goods is recognised when the property in the goods is transferred to the buyer. The Sales are reflected net of sales tax, returns and trade discount. Cash discount received is recognised in the books at the time of making the payments to suppliers. Dividend from investments is recognised when the Company in which they are held declares the dividend and when the right to receive is established.

k) Purchases

Purchases are net of incentive and commission received from suppliers and include claims rejected and goods '' short received. Incentive and commission from principals are recognised as and when no significant uncertainty exists regarding their collectability.

l) Leases:

The company has leased facilities under cancellable operating lease arrangements with a lease term raging from one year to three years, which are subject to renewals at mutual consents thereafter. The cancellable arrangements can be terminated by either party after giving due notices. The Company does not have any non cancellable lease arrangements therefore no disclosure is required as per AS 19. Company has given some portion of the building on rent and it is not possible to segregate the cost of rented protion of the building.

m) Foreign Exchange Transactions

Transactions in foreign currencies are recorded at exchange rates prevailing on the date of respective transactions.

n) Impairment of Assets

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

o) Accounting forTaxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the aggregate amount of income tax determined to be payable in respect of taxable income for the period. Deferred tax is the tax effect of timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

p) Provision and Contingencies Liabilities

i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past event.

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and

c) the amount of the obligation can be reliably estimated.

ii) Contingent liability is disclosed in case there is;

a) possible obligation that arises from past events and 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

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations; or

(ii) a reliable estimate of the amount of the obligation cannot be made.


Mar 31, 2013

A) Accounting convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised on the period in which the results materialise.

c) Fixed assets

Fixed assets are shown in accounts at historical cost less depreciation improvement to fixed assets which have the effect of increasing the future benefits from the existing assets beyond its previously assessed standard of performance are included in the gross block.

d) Depreciation

Depreciation on building .plant and machinery is provided for on Straight Line basis and on other fixed assets on Written Down Value basis as per the rates specified in Schedule XIV to the companies Act, 1956.

e) Intangible assets

Intangible Assets are stated at cost less accumulated amount of amortisation.

f) Amortisation

Lease hold Land is amortised over the period of lease. Intangible assets are amortised on straight line method over the estimated useful life.

g) Inventories

Finished goods and Goods in Transit are valued at cost or estimated realizable value whichever is lower.

h) Investments

Long Term Investments are carried at Cost. However if there is a decline other than temporary in the value of long term investments, the carrying amount is reduced to recognise the decline. Current investments are carried out at lower of cost and fair value.

i) Employees benefits

1. Defined Contribution Plan

The Company''s Provident Fund Scheme and ESI plans are defined Contribution Plans and the Company''s Contribution paid/ payable is recognised as expense in the Statement of Profit and Loss during the period in which the employees render the related service.

2. Defined Benefit Plan

(a) The Company''s Gratuity is Defined Benefit Plan. The Company ''s Liability towards Gratuity is determined using the Projected Unit Credit Method which recognises each period of service as giving rise to additional unit of Employee Benefit Entitlement. The Gratuity scheme is operated through Group Gratuity Scheme of LIC.

(b) The liabilities are provided based on Actuarial Valuation certified by LIC. Actuarial gains and losses are charged to Profit and Loss Account.

j) Sales and other income

Revenue from sale of goods is recognised when the property in the goods is transferred to the buyer. The Sales are reflected net of sales tax, returns and trade discount. Cash discount received is recognised in the books at the time of making the payments to suppliers. Dividend from investments is recognised when the Company in which they are held declares the dividend and when the right to receive is established.

k) Purchases

Purchases are net of incentive and commission received from suppliers and include claims rejected and goods short received. Incentive and commission from principals are recognised as and when no significant uncertainty exists regarding their collectability.

l) Leases:

The company has leased facilities under cancellable operating lease arrangements with a lease term raging from one year to three years, which are subject to renewals at mutual consents thereafter. The cancellable arrangements can be terminated by either party after giving due notices. The Company does not have any non cancellable lease arrangements therefore no disclosure is required as per AS 19. Company has given some portion of the building on rent and it is not possible to segregate the cost of rented protion of the building.

m) Foreign Exchange Transactions

Transactions in foreign currencies are recorded at exchange rates prevailing on the date of respective transactions.

n) Impairment of Assets

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

o) Accounting for Taxes on Income

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the aggregate amount of income tax determined to be payable in respect of taxable income for the period. Deferred tax is the tax effect of timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

p) Provision and Contingencies Liabilities

i) Provision is recognised (for liabilities that can be measured by using a substantial degree of estimation) when:

a) the company has a present obligation as a result of a past event.

b) a probable outflow of resources embodying economic benefits is expected to settle the obligation ; and

c) the amount of the obligation can be reliably estimated.

ii) Contingent liability is disclosed in case there is;

a) possible obligation that arises from past events and 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

b) a present obligation arising from past events but is not recognised

(i) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations; or

(ii) a reliable estimate of the amount of the obligation cannot be made.

 
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