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Accounting Policies of Kanel Industries Ltd. Company

Mar 31, 2015

(A) METHOD OF ACCOUNTING :

(i) These financial statements have been prepared under historical cost convention from books of accounts maintained on an accrual basis (unless otherwise stated hereinafter) in conformity with accounting principles generally accepted in India and comply with the Accounting Standards issued by the Institute Of Chartered Accountants Of India and referred to Section 129 and Section 133 of The Companies Act, 2013 of India. The Accounting policies applied by the company are consistent with those used in previous year.

(ii) The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis except specified below

(a) Liability of Sales Tax, Income tax for pending assessments.

(b) Employees Benefit in respect of Gratuity, Leave Encashment and Bonus.

(B) FIXED ASSETS :

(i) Tangible Fixed Assets acquired by the company are reported at acquisition value, with deduction for accumulated depreciation [ other than "freehold land " where no depreciation is charged]. The acquisition value includes purchase price, inward freight, duties, taxes and incidental expenses related to acquisition and installation and allocable pre-operative expenditure.

(ii) Intangible Fixed Assets: there is no intangible fixed assets.

(iii) There is no Capital work in progress during the year under audit.

(C) DEPRECIATION :

Depreciation has been provided based on life assigned to each asset in accordance with Schedule II of The Companies Act, 2013

(D) INVESTMENTS :

All the investments are current investments and valued at purchase cost.

(E) INVENTORIES :

The cost of various categories of Inventory is determined as follows.

1. Raw material and packing material : At Cost including local taxes (Net of setoff)

Or Net realizable value, whichever is lower

2. Stock in Process : At Cost or Net realizable Value, whichever is lower

3. Stock of Finished Goods : At Cost or Net realizable Value, whichever is lower

4. Consumable stores and spares : At Cost or Net realizable Value, whichever is lower

5. Scrap : At Net realizable Value

Cost of raw material and packing material are determined in using FIFO method. Cost of Finished goods and stock in process include cost of raw material and packing materials, cost of conversion and other cost incurred in bringing inventories to the present location and condition. Accounting policy for inventory applied to the extent applicable to present business operation of the company.

(F) REVENUE RECOGNITION :

(i) SALES - Sales are exclusive of all the duty, forwarding charges. (ii) Dividend income are realized on cash basis. (iii) Interest Income from Bank Fixed Deposit accounted on receipt basis.

(G) RETIREMENT BENEFITS :

Gratuity, other ex-gratia benefits and leave encashment are accounted on cash basis. Provisions for Provident Fund, Super annotation, pension and ESIC are not applicable to the company as number of employees are below statutory limit.

(H) TAXATION :

Current Tax provision not done by the company. Management is arranging to file all income tax pending returns and at that time current tax provision will be workout.

Deferred tax assets arising on account of brought forward business losses including unabsorbed depreciation are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on temporary timing difference are recognized only if there is reasonable certainty of realization.

(I) Value Added Tax(VAT) :

VAT payable of finished goods is accounted net of setoff i.e. VAT payable on finished goods less VAT paid on inputs.

(J) PROVISIONS & CONTINGENCIES :

A provision is recognized when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligations, in respect of which reliable estimate can be made. These are reviewed at each balance sheet and adjusted to reflect the current best estimate. Contingent liabilities are not recognized but are disclosed in the notes to the Financial Statements to the extent of details available, if any. A contingent Assets is neither recognized nor disclosed.

(K) PROVISION FOR BAD AND DOUBTFUL DEBTS :

Provision for bad and doubtful debt has been made as per management's option and their decision, if any.

(L) CASH FLOW STATEMENT :

Cash Flow are reported using the indirect method, whereby profit (loss) before tax is adjusted for the effect of transactions of a non-cash nature and any income due to writing-off liabilities of the company and any expenses due to provision for bad debts have been considered as extra ordinary item.

Cash and Cash equivalents presented in the Cash flow statement consist of cash on hand and balance with banks including dormant bank accounts and No lien bank accounts [ read with Notes no 26] .

(M) IMPAIRMENT OF ASSETS :

Impairment losses, if any, are recognized in accordance with the Accounting Standard 28 issued in this regard by the Institute Of Chartered Accountants Of India.

(N) BORROWING COST :

Borrowing cost attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost of that assets, till the assets is ready for use. Other Borrowing costs are recognized as an expense in the period in which these are incurred.

(O) PRELIMINARY EXPENSES :

Preliminary expenses and Share issue expenses have been amortized over a period of years as defined in section 35D of Income Tax Act, 1961.

(P) EARNING PER SHARE :

The Basic and Diluted Earnings Per Share ( EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.


Mar 31, 2014

(A) METHOD OF ACCOUNTING :

(i) The Financial Statements have been prepared to comply in all material respects with the Notified Accounting Standards by The Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounts are prepared on historical cost basis and on the principles of a going concern.

(ii) The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis except specified below

(a) Liability of Sales Tax, Income tax for pending assessments.

(b) Employees Benefit in respect of Gratuity, Leave Encashment and Bonus.

(B) USE OF ESTIMATES :

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual result and estimates are recognised in the period in which the results are known / materialised.

(C) FIXED ASSETS :

(i) Tangible Fixed Assets acquired by the company are reported at acquisition value, with deduction for accumulated depreciation [ other than "freehold land " where no depreciation is charged]. The acquisition value includes purchase price, inward freight, duties, taxes and incidental expenses related to acquisition and installation and allocable pre-operative expenditure.

(ii) Intangible Fixed Assets: there is no intangible fixed assets.

(iii) There is no Capital work in progress during the year under audit.

(D) DEPRECIATION :

Depreciation has been provided on the assets in accordance with Section 205(2) of the Companies Act, 1956 on written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956. Depreciation on Plant & Machinery at Naroda unit has been provided for normal Wear & tear though it has been inoperative throughout the year.

(E) INVESTMENTS :

All the investments are current investments and valued at purchase cost.

(F) INVENTORIES :

Raw Materials and finished goods are valued at cost or net realizable value whichever is lower.

(G) REVENUE RECOGNITION :

(i) SALES - Sales are exclusive of all the duty, forwarding charges. (ii) Dividend income are realized on cash basis. (iii) Commodities settlement income/charges recognize on settlement of dues.(iv) Interest Income from Bank Fixed Deposit accounted on cash basis. (v) Rent Income is accounted on accrual basis.

(H) RETIREMENT BENEFITS :

Gratuity, other ex-gratia benefits and leave encashment are accounted on cash basis. Provisions for Provident Fund, Super annuation, pension and ESIC are not applicable to the company as number of employees are below statutory limit.

(I) TAXATION :

Current Tax provision not done by the company. Management is arranging to file all income tax pending returns and at that time current tax provision will be workout.

Deferred tax assets arising on account of brought forward business losses including unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that

such assets will be realised. Deferred tax assets arising on temporary timing difference are recognised only if there is reasonable certainty of realisation.

(J) PROVISIONS &CONTINGENCIES :

A provision is recognized when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligations, in respect of which reliable estimate can be made. These are reviewed at each balance sheet and adjusted to reflect the current best estimate. Contingent liabilities are not recognised but are disclosed in the notes to the Financial Statements to the extent of details available. A contingent Assets is neither recognised nor disclosed.

(K) PROVISION FOR BAD AND DOUBTFUL DEBTS :

Provision for bad and doubtful debt has been made as per management''s option and their decision, if any.

(L) CASH FLOW STATEMENT :

Cash Flow are reported using the indirect method, whereby profit (loss) before tax is adjusted for the effect of transactions of a non-cash nature and any income due to writing-off liabilities of the company and any expenses due to provision for bad debts have been considered as extra ordinary item.

Cash and Cash equivalents presented in the Cash flow statement consist of cash on hand and demand deposits with bank and balance with dormant bank accounts [ read with Notes no 26] .

(M) IMPAIRMENT OF ASSETS :

Impairment loss is charged to the profit and loss account in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognized in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(N) BORROWING COST :

Borrowing cost attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost of that assets, till the assets is ready for use. Other Borrowing costs are recognized as an expense in the period in which these are incurred.

(O) PRELIMINARY EXPENSES :

Preliminary expenses and Share issue expenses have been amortized over a period of years as defined in section 35D of Income Tax Act, 1961.

(P) EARNING PER SHARE :

The Basic and Diluted Earning Per Share ( EPS) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the year.


Mar 31, 2013

(A) METHOD OF ACCOUNTING :

i) The accounts are prepared on historical cost basis and on the principles of a going concern.

ii) The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis except specified below

(a) Liability of Sales Tax, Income tax for pending assessments.

(b) Employees Benefit in respect of Gratuity, Leave Encashment and Bonus.

(B) FIXED ASSETS :

(i) Tangible Fixed Assets acquired by the company are reported at acquisition value, with deduction for accumulated depreciation [ other than "freehold land " where no depreciation is charged]. The acquisition value includes purchase price, inward freight, duties, taxes and incidental expenses related to acquisition and installation and allocable pre-operative expenditure.

(ii) Intangible Fixed Assets: there is no intangible fixed assets.

(iii) There is no Capital work in progress during the year under audit.

(C) DEPRECIATION :

Depreciation has been provided on the assets at written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956. Depreciation on Plant & Machinery at Naroda unit has been provided for normal Wear & tear though it has been inoperative throughout the year.

(D) INVESTMENTS :

All the investments are current investments and valued at purchase cost.

(E) INVENTORIES :

There are no closing stock of Finished Goods, Raw Material and any WIP at year end.

(F) REVENUE RECOGNITION :

i. Revenue / Income and Cost / Expenditure are accounted for on accrual basis

ii. Vatav / Kasar income are recognised due to writing off long outstanding dormant accounts under managements'' decision.

iii. Rent Income recognised on accrual basis.

iv. Interest Income others accounted on basis of TDS credited in our account on basis of form 26AS though respective deposits with Uttar Gujarat Vij Co. Ltd have been transferred to other parties on transfer of plants in previous years.

(G) RETIREMENT BENEFITS :

1) The company has terminated its permanent staff due to close down of manufacturing activities of the company and decided to appoint one or two assistant on retainership salary basis. Gratuity and other ex- gratia benefits are not accounted at this stage.

2) Company has no Leave encashment scheme as a part of retirement benefits scheme. The employees of the company are entitled to en cash their un availed leave accrued during course of their employment in accordance with the company''s rules and regulations. The same are accounted in the books of accounts as and when claimed.

(H) TAXATION :

Current Tax provision not done by the company. Management is arranging to file all income tax pending returns and at that time current tax provision will be workout.

Deferred tax assets arising on account of brought forward business losses including unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on temporary timing difference are recognised only if there is reasonable certainty of realisation.

(I) PROVISIONS & CONTINGENCIES :

A provision is recognized when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligations, in respect of which reliable estimate can be made. These are reviewed at each balance sheet and adjusted to reflect the current best estimate. Contingent liabilities are not recognised but are disclosed in the notes to the Financial Statements to the extent of details available. A contingent Assets is neither recognised nor disclosed.

(J) PROVISION FOR BAD AND DOUBTFUL DEBTS :

Provision for bad and doubtful debt has been made as per management''s option and their decision, if any.

(K) CASH FLOW STATEMENT :

Cash Flow are reported using the indirect method, whereby profit (loss) before tax is adjusted for the effect of transactions of a non-cash nature and any income due to writing-off liabilities of the company and any expenses due to provision for bad debts have been considered as extra ordinary item.

Cash and Cash equivalents presented in the Cash flow statement consist of cash on hand and demand deposits with bank and balance with dormant bank accounts [ read with Notes no 5].


Mar 31, 2010

(A) METHOD OF ACCOUNTING

i) The Financial Statement are prepared under historical cost convention and on

accrual basis.

ii) The company generally follows mercantile system of accounting and recognizes

significant items of income and expenditure on accrual basis except specified below

(a) Liability of Sales Tax, Income tax for pending assessments.

(b) Employees Benefit in respect of Gratuity Leave Encashment and Bonus.

(B) FIXED ASSETS

Fixed Assets are accounted at cost inclusive of inward freight, duties, taxes and incidental expenses related to acquisition and installation and allocable pre-operative expenditure.

(C) DEPRECIATION

Depreciation has been provided on the assets at written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956. Depreciation on Plant & Machinery at Naroda unit has been provided for normal Wear & tear though it has been inoperative throughout the year.

(D) INVESTMENTS

All the investments are current investments and valued at purchase cost.

(E) INVENTORIES

There are no closing stock of Finished Goods. Raw Material and any WIP at year end.

(F) REVENUE RECOGNITION

i. Vatav / Kasar income are recognised on settlement of Account due to earlier years

differences. ii. Other Income is accounted on receipt of payment relating to Sale of Fixed Assets in

earlier year.

(G) RETIREMENT BENEFITS

1) Gratuity and other ex-gratia benefits are accounted on cash basis and hence no provision for accrued gratuity has been made.

2) Company has no Leave encashment scheme as a part of retirement benefits scheme. The employees of the company are entitled to en cash their un availed leave accrued during course of their employment in accordance with the companys rales and regulations. The same are accounted in the books of accounts as and when claimed.

(H) TAXATION

Deferred tax assets arising on account of brought forward business losses including unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on temporary timing difference are recognised only if there is reasonable certainty of realisation.

(I) CONTINGENT LIABILITIES

All contingent liabilities are disclosed to the extent of details available.

(J) PROVISION FOR BAD AND DOUBTFUL DEBTS

Provision for bad and doubtful debt has been made as per managements option and their decision, if any.

 
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