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Accounting Policies of Kratos Energy & Infrastructure Ltd. Company

Mar 31, 2013

A) Basis of Accounting

The financial statements have been prepared under historical cost convention on an accrual basis & comply with the Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956. (Except provision for retirement benefits of the Employee, Leave Salary & Bonus which are recorded on Cash Basis).

b) Revenue Recognition

All income and expenditure have a material bearing on the financial statements are recognised on accrual basis except Interest on Government Securities and Dividend which have been accounted on receipt basis.

c) Fixed Assets

Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes taxes, duties, freight and other incidental expenses but net of Cenvat availed related to acquisition and installation of the respective fixed assets.

d) Impairment of Fixed Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indication that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets" issued by the ICAI. Where the recoverable amount of any fixed assets is lower than its carrying amount, a provision for impairment loss on fixed assets is made for the difference

e) Depreciation

Depreciation on Fixed Assets has been provided on ''Written Down Value Method'' as per the rates and in the manner specified in Scheduled XIV of the Companies Act, 1956. Depreciation on Additions / deletions has been accounted on pro-rata basis.

f) Valuation of Inventories

As informed by management there is no stock in hand in existence at the year end.

g) Investment

Investments that is intended to be held for more than a year from the date of acquisition are classified as long term investment and are carried at cost less any provision for permanent diminution in value.

h) Provisions and Contingent Liabilities

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

i) Accounting for Taxation on Income :

Current Taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income- tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions. No provision for taxation has been made under section 115JB of the Income Tax Act, 1961, even though there is taxable income earned for the year, as there are carried forward losses under the Income Tax Act,1961 of the previous years which are brought forward for set off against the current year''s income.

Deferred Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date. The effect of a change in tax rates on deferred tax and assets or liabilities are recognized in the period that includes the enactment date. Deferred tax Assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future.


Mar 31, 2010

A) Basis of Accounting

The financial statements have been prepared under historical cost convention on an accrual basis & comply with the Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956. (Except provision for retirement benefits of the Employee, Leave Salary & Bonus which are recorded on Cash Basis).

b) Revenue Recognition

All income and expenditure have a material bearing on the financial statements are recognised on accrual basis except Interest on Government Securities and Dividend which have been accounted : on receipt basis.

c) Fixed Assets

Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed assets includes taxes, duties, freight and other incidental expenses but net of Cenvat availed related to acquisition and installation of the respective fixed assets.

d) Impairment of Fixed Assets:

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indication that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets" issued by the ICAI. Where the recoverable amount of any fixed assets is lower than its carrying amount, a provision for impairment loss on fixed assets is made for the difference

e) Depreciation

Depreciation on Fixed Assets has been provided on Written Down Value Method as per the rates and in the manner specified in Scheduled XIV of the Companies Act, 1956. Depreciation on Additions / deletions has been accounted on pro-rata basis.

f) Valuation of Inventories

As informed by management there is no stock in hand in existence.

g) Investment

Investments that is intended to be held for more than a year from the date of acquisition are classified as long term investment and are carried at cost less any provision for permanent diminution in value.

h) Provisions and Contingent Liabilities

security. A Case was filed by Eldo Guarantee Ltd. against the bank for doing such a transaction without informing it. Later on in the current year the matter was settled and 75% proceeds were issued to Eldo Gaurantee Ltd. as its share in the Fd. Since in the books of accounts liability was not created in the name of Eldo Gauarntee , it is shown as compensation paid to it and same is debited to "Reserves & surplus A/c".Since all the TDS certificates for Interest on this Fd are issued in the current year for last four years and in the name of Dilvikas Finance Ltd., it is shown under the head "Current Assets"

 
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