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Accounting Policies of Kanika Infrastructure & Power Ltd. Company

Mar 31, 2012

A. Basis of Preparation

These Financial Statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain financial instruments which are major at fair value. The financial statements have been prepared to comply in the material aspects with the accounting standard notified under section 211(3C) [Companies (Accounting Standards) Rules, 2006 as amended] and other relevant provisions of the Companies Act, 1956.

b. Principals of Consolidation

These Financial Statements of the subsidiaries companies used in the consolidation are drawn up to the same reporting date as of the Company.

The Consolidated Financial Statements have been prepared on the following basis:- i. The Financial Statements of the Company as its subsidiaries Companies have been combined on line-by-line basis by adding together like item of assets, liabilities, income & expenses. Inter-Company balances and transactions and unrealized profits or losses have been fully eliminated.

c. Use of Estimates

The preparation of Financial Statements requires the management of the group to make estimates and assumptions that affect the reported balance of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the Financial Statements and reported amounts of income and expenses during the year. Example of such estimates include provisions for doubtful debts, employee benefits, provisions for income taxes, accounting for contracts costs expected to the incurred, the useful lives of depreciable fixed assets and provisions for impairment.

d. Fixed Assets

Fixed Assets are stated at cost, less accumulated depreciation/amortization. Costs include all expenses incurred to bring the assets to its present location and conditions.

e. Investments

Long-term investments and current maturities on long term investments are stated at cost, less provisions for other than temporary diminution in value. Current Investments, except for current maturities of long term investments, are stated at the lower of cost and fair value.

f. Employee Benefits

1. Contributions to defined contribution scheme such as provident fund and family pension fund are charged to the profit and loss account as incurred.

2. Leave encashment are accounted for at the time of encashment.

3. As per payment of Bonus Act, Bonus is not payable for the Financial Year 2011-2012.

4. The Company has completed Eight years of operations but none of employees is in duty of the company for above 5 years hence provision for Gratuity Act not required.

g. Taxation

Current Income tax expense comprises taxes on income from operation in India and in foreign jurisdiction. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expenses relating to overseas operation is determined in accordance with tax laws applicable in countries were such operations are domiciled.

Minimum alternative tax (MAT) paid in accordance with the tax laws, which gives ride to future economic benefits in the form of adjustment of future Income tax liability, is considered an asset if there is convincing evidence that the Group will pay normal Income tax after the tax holiday period. Accordingly, MAT is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Group and the asset can be measured reliably.

Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

h. Foreign currency transactions

The Company is accounting in foreign exchange transactions at the exchange rate prevailing on the date of transaction the gain/loss resulting out of foreign currency transaction are accounted for as and when actual remittance is made/ received. At the yearend outstanding in foreign currency are computed and any loss arise out of that is provided for in the book as per AS-11.

i. Inventories

Raw materials, sub-assemblies and components are carried at the lower of cost and net realizable value. Cost is determined on a purchase basis. Purchased goods-in-transit are carried at cost. Finished goods produced or purchase by the Group is carried at the Purchase value. Cost includes direct material and labor cost and a portion of manufacturing overheads.

j. Provisions, Contingent liabilities and Contingent assets

A provision is recognized when the Group has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made.

Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements.

A contingent asset is neither recognized nor disclosed in the financial statements.

k. Purchase The Company accounts for purchase of goods and materials on the date of finalization of purchase contract and on receipt of goods.

l. Sale

Revenue from sale of goods is recognized upon passing of title, which generally coincides with delivery.

m. Depreciation Depreciation on fixed assets is on "Written Down Value Basis" at the rates specified in Schedule XIV to the Companies Act, 1956 from the date the same is put to use.

n. Deferred Tax Liability/Assets Deferred Taxation liability/asset has been provided in the books up to the period 31-03-2012.


Mar 31, 2011

1) ACCOUNTING CONVENTION

The financial statements are prepared under historical cost convention in accordance with the mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956, and followed consistently by the Company.

2) SYSTEM OF ACCOUNTING

The company adopts accrual basis of accounting in the preparation of accounts except interest on income tax refund, filling fee, which is accounted on the basis of communication received from income tax department.

3) PURCHASE

The Company accounts for purchase of goods and materials on the date of finalization of purchase contract and on receipt of goods.

4) SALE

Revenue from sale of goods is recognized upon passing of title, which generally coincides with delivery.

5) STOCK

The Stock of goods is accounted on the basis of cost including acquisition cost or the market value which ever is lower on the valuation date.

6) FIXED ASSETS

Fixed Assets are stated at cost less depreciation. Fixed Assets are capitalized at the cost of acquisition including all expenses directly attributable to bringing the assets to it 's working condition for intended use.

7) DEPRECIATION

Depreciation on fixed assets is on "Written Down Value Basis" at the rates specified in Schedule XIV to the Companies Act, 1956 from the date the same is put to use.

8) EMPLOYEE BENEFIT

a) Contributions to defined contribution scheme such as provident fund and family pension fund are charged to the profit and loss account as incurred.

b) Leave encashment are accounted for at the time of encashment.

c) As per payment of Bonus Act, Bonus is not payable for the Financial Year 2010-2011.

d) The Company has completed eight years of operations but non of employee is in duty of the company for above 5 years hence provision for Gratuity Act not required.

9) DEFERRED TAX LAIBILITY/ASSETS

Deferred Taxation liability/asset has been provided in the books up to the period 31-03-2011.

10) FOREIGN CURRENCY TRANSACTION

The Company is accounting in foreign exchange transactions at the exchange rate prevailing on the date of transaction the gain/loss resulting out of foreign currency transaction are accounted for as and when actual remittance is made/received. At the year end outstanding in foreign currency are computed and any loss arise out of that is provided for in the book as per AS-11.


Mar 31, 2010

1) ACCOUNTING CONVENTION

The financial statements are prepared under historical cost convention in accordance with the mandatory Accounting Standards and the relevant provisions of the Companies Act, 1956, and followed consistently by the Company.

2) SYSTEM OF ACCOUNTING

The company adopts accrual basis of accounting in the preparation Of accounts except interest on income tax refund, filling fee, which is accounted on the basis of communication received from income tax department.

3) PURCHASE

The Company accounts for purchase of goods and materials on the date of finalization of purchase contract and on receipt of goods.

4) SALE

Revenue from sale of goods is recognized upon passing of title, which generally coincides with delivery.

5) STOCK

The Stock of goods is accounted on the basis of cost including acquisition cost or the market value which ever is lower on the valuation date.

6) FIXED ASSETS

Fixed Assets are stated at cost less depreciation. Fixed Assets are capitalized at the cost of acquisition including all expenses directly attributable to bringing the assets to it's working condition for intended use.

7) DEPRECIATION

Depreciation on fixed assets is on "Written Down Value Basis" at the rates specified in Schedule XIV to the Companies Act, 1956 from the date the same is put to use.

8) EMPLOYEE BENEFIT

a) Contributions to defined contribution scheme such as provident fund and family pension fund are charged to the profit and loss account as incurred.

b) Leave encashment are accounted for at the time of encashment.

c) As per payment of Bonus Act, Bonus is not payable for the Financial Year 2008-2010.

d) The Company has completed eight years of operations but non of employee is in duty of the company for above 5 years hence provision for Gratuity Act not required;

9) DEFERREDTAX LA1B1LITY/ASSETS

Deferred Taxation liability/asset has been provided in the books up to the period 31-03-2010.

10) FOREIGN CURRENCY TRANSACTION

The Company is accounting in foreign exchange transactions at the exchange rate prevailing on the date of transaction the gain/loss resulting out of foreign currency transaction are accounted for as and when actual remittance is made/received. At the year end outstanding in foreign currency are computed and any loss arise out of that is provided for in the book as per AS-11.

 
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