Home  »  Company  »  Lakshmi Finance  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Lakshmi Finance & Industrial Corporation Ltd. Company

Mar 31, 2015

1. NATURE OF OPERATIONS:

Company is engaged in the business of Money lending, Commodity Trading and investments in Equity Shares and Mutual Funds.

2. BASIS OF PREPARATION:

The financial statements have been prepared to comply in all material respects with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, and the relevant provisions of the Companies Act,2013 and in accordance with the generally accepted Accounting Principles in India under the historical cost convention and on accrual basis, except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies are consistent with those used in the previous year.

3. SIGNIFICANT ACCOUNTING POLICIES:

a. 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 dining the reporting period". Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

b. Tangible Fixed Assets:

Fixed assets are stated at cost (or revalued amounts, as the case may be), less accumulated depreciation, amortisation and impairment losses if any. Cost comprises the purchase price and any attributable cost to bring the asset to its working condition for its intended use.

Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

c. Depreciation on Tangible Fixed Assets:

Depreciation is provided considering the useful lives of respective assets, as provided and prescribed under schedule II of the Companies Act, 2013.

Fixed Assets costing rupees Five thousand or less are fully depreciated in the year of acquisition.

d. Inventories:

Stock in Trade is stated at the lower of cost and net realizable value. Cost is determined on FIFO basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.

e. Prior period items:

All items of income/expenditure pertaining to prior period, which are material, are accounted through "prior period adjustments" and the others are shown under respective heads of account in the statement of Profit and Loss.

f. Revenue Recognition :

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Specifically the following basis is adopted:

Sale of Commodities:

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends:

Dividend is recognised when the right to receive the same is established.

g. Investments:

Investments that are readily realisable and intended to be held for not more than a year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value of each long term investment is made to recognize a decline other than temporary in nature.

An investment in land or buildings, which is not interded to be occupied substantially for use by, or in the operations of the company, is treated as investment property. Investment properties are stated at cost, net of accumulated depreciation and impairment losses, if any.

Depreciation on buildings is provided on written down value method, in accordance with Schedule XIV to the Companies Act, 1956.

h. Retirement and Other Employee Benefits:

Gratuity liability is a defined benefit obligation and is provided for or the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

The Provident Fund is a defined contribution scheme and the contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due There are no other obligations other than the contribution payable to the respective trusts.

Short term compensated absences are provided on an estimated basis. Long term compensated absences are provided for based on actuaral valuation on project unit credit method carried by an actuary as at the end of the year.

Actuarial gains/losses are immedately taken to profit and loss account and are not defened.

i. Borrowing Costs:

Borrowing costs that are directly attrbutable to the acquisition, construction or production of Fixed Assets, which take substantial period of time to get ready for their intended use, are capitalized. Other Borrowing costs are recognized as an expense in the yea; in which they are incurred.

j. Leases:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases.

Where the Company is the lessee

Operating lease payments are recognised as an expense in the profit and loss account on straight-line basis over the lease term.

Where the Company is the lessor

Assets subject to operating leases are included in fixed assets. Lease income is recognized in the profit and loss account. Costs, including depreciation are recognised as an expense in the profit and loss account.

k. Earnings per Share (Basic and Diluted):

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

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.

l. Taxes on Income:

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 1961 enacted in India. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the Company has carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only, if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

m. Impairment:

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on intemal/extemal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset are no longer exist or have decreased.

n. Provisions:

A provision is recognised when there is 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 a reliable estimate can be made. Provisions 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.

o. Contingent Liabilities:

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

p. Earnings per Share (Basic and Diluted):

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

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.

q. Cash Flow Statement:

Cash flows are reported using indirect method. Cash and cash equivalents in the cash flow statement comprise cash at bank, cash/cheques in hand and Fixed Deposits with Banks.

r. Others:

Dividend as recommended by the Board of Directors is provided for in the accounts pending shareholders approval.


Mar 31, 2011

A) Basis of Accounting

The financial statements have been prepared to comply in all material respects with the Notified accounting standards by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared in accordance with the generally accepted Accounting Principles in India under the historical cost convention and on accrual basis, except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies are consistent with those used in the previous year.

b) 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. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

c) Fixed Assets

Fixed assets are stated at cost (or revalued amounts, as the case may be), less accumulated depreciation, amortisation and impairment losses if any. Cost comprises the purchase price and any attributable cost to bring the asset to its working condition for its intended use.

Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

d) Depreciation

i. Depreciation on Fixed Assets not related to leases is provided on straight - line method, in accordance with Schedule XIV to the Companies Act, 1956.

ii. The Assets given on lease are written of during the primary lease period taking the month as a unit.

iii. Fixed Assets costing rupees Five thousand or less are fully depreciated in the year of acquisition.

e) Prior period items

All items of income/expenditure pertaining to prior period, which are material, are accounted through "prior period adjustments" and the others are shown under respective heads of account in the Profit and Loss Account.

f) Contingent Liabilities

The contingent liabilities are indicated by way of a note and will be provided/paid on crystalisation.

g) Impairment

i. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

ii. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset are no longer exist or have decreased.

h) Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long- term investments are carried at cost. However, provision for diminution in value of each long term investment is made to recognize a decline other than temporary in nature.

i) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Specifically the following basis is adopted:

i. Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

ii. Dividends:

Dividend is recognised as and when the payment is received.

j) Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of Fixed Assets, which take substantial period of time to get ready for their intended use, are capitalized. Other Borrowing costs are recognized as an expense in the year in which they are incurred.

k) Retirement and Other Employee Benefits

i. Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

ii. The Provident Fund is a defined contribution scheme and the contributions are charged to the profit and loss account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.

iii. Short term compensated absences are provided on an estimated basis. Long term compensated absences are provided for based on actuarial valuation on project unit credit method carried by an actuary as at the end of the year.

iv. Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

l) Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases.

Where the Company is the lessee

Operating lease payments are recognised as an expense in the proft and loss account on straight-line basis over the lease term.

Where the Company is the lessor

Assets subject to operating leases are included in fixed assets. Lease income is recognized in the profit and loss account. Costs, including depreciation are recognised as an expense in the profit and loss account.

m) Taxes on Income

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act 1961 enacted in India. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the Company has carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only, if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

n) Provisions

A provision is recognised when there is 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 a reliable estimate can be made. Provisions 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.

o) Earnings per Share (Basic and Diluted)

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

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.

p) Cash Flow Statement

Cash flows are reported using indirect method. Cash and cash equivalents in the cash flow statement comprise cash at bank, cash/cheques in hand and Fixed Deposits with Banks.

q) Others

Dividend as recommended by the board of directors is provided for in the accounts pending shareholders approval.


Mar 31, 2008

A) Financial Statements are based on historical costs.

b) The preparation of financial statements requires the management of the Company to make certain estimates and assumptions that effect the reported balances 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 expenditure during the year. Example of such estimates includes provision for doubtful debts, employee retirement benefits and provision for taxes etc,. Any revision to such estimate is recognised prospectively in the year in. which they are revised.

c) Fixed Assets are stated at cost net of depreciation provided.

d) Long Term Investments are carried at cost. Provision for diminution, if any, in the opinion of the Board, in the value of each long-term investment is made to recognise a decline, other than of a temporary nature.

e) Stock in trade is valued at lower of cost or realisable value.

f) The following are accounted for on receipt basis:

i) Additional Finance Charges on over dues.

ii) Dividend Income.

g) Employee benefits:

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

ii) Post employment and other long term employee benefits are recognised as an expense in the Pofit and Loss Account for the year in which the employee has rendered service. The expense is recognised at the present value of the amount payable determined on the basis of actuarial valuation. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Profit and Loss Account.

h) Depreciation on Fixed Assets is provided as follows:

i) Depreciation on Plant & Machinery not related to leases is provided on straight-line method, in accordance with schedule xiv to the Companies Act, 1956.

ii) The Assets given on lease are written of during the primary lease period taking the month as a unit.

i) Dividend as recommended by the Board of Directors is provided for in the accounts pending shareholders. approval.

j) Deferred tax asset and liability is calculated by applying the tax rate and tax laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.


Mar 31, 2005

A) Financial Statements are based on historical costs.

b) Fixed Assets are stated at cost net of depreciation provided.

c) Long Term Investments are carried at cost. Provision for diminution, if any, in the opinion of the Board, in the value of each long term investment is made to recognise a decline, other than of a temporary nature.

d) Stock in trade is valued at lower of cost or realisable value.

e) The following are accounted for on receipt basis:

i) Additional Finance Charges on Overdues.

ii) Dividend Income.

0 Provision for Earned Leave is made for value of unutilised leave due to employees at the end of the year.

g) Provident Fund is administered through Regional Provident Fund Commissioner. Superannuation and group gratuity schemes are administered through policies taken from Life Insurance Corporation of India. Other retirement benefits are provided for on an estimated basis. All outgoings are charged to revenue.

h) Depreciation on Fixed Assets is provided as follows:

i) Depreciation on Plant & Machinery not related to leases is provided on straight line method, in accordance with schedule XIV to the Companies Act, 1956.

ii) On written down value method on the other assets (excluding the assets given on lease on or after 1.4.1991),in accordance with Schedule XIV to the Companies Act, 1956 read with circular No. 1/86 dated 21.5.1986 issued by the Department of Company Affairs, Government of India.

iii) The Assets given on lease on or after 1.4.1991 are written off during the primary lease period taking the month as a unit.

i) The Current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax assets and liabilities are recognised for future result between profit offered for income tax and the profit as per the financial statements. Deferred tax assets and liabilities are measured as per the tax rates and laws that have been enacted or substantially enacted by the balance sheet date. However, deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainity that sufficient future taxable income will be available against which such deferred tax asset can be realised.


Mar 31, 2000

A) Financial Statements are based on historical costs.

b) Fixed Assets are stated at cost net of depreciation provided.

c) The Investments are stated at cost.

d) Hire Purchase income is accounted taking month as a unit.

e) Lease Rentals credited to Profit & Loss Account are net of/including Lease Equalisation Charge as recommended by the Institute of Chartered Accountants of India in its Guidance Note on "Accounting for Leases".

f) The following are accounted for on receipt basis:

i) Service Charges on Hire Purchase and Lease transactions.

ii) Additional Finance Charges on Overdues.

iii) Dividend Income.

g) Provision for Earned Leave is made for value of unutilised leave due to employees at the end of the year.

h) Provident Fund is administered through Regional Provident Fund Commissioner. Superannuation and group gratuity schemes are administered through policies taken from Life Insurance Corporation of India. Other retirement benefits are provided for on an estimated basis. All outgoings are charged to revenue.

i) Stock on Hire is stated at agreement prices reduced by the Instalments which are fallen due.

j) Moulds developed/Purchased are treated as inventory and the Company charges them off over a period of three years in the case of imported moulds and two years in the case of indigenous moulds. Moulds capitalised upto March 31, 1989 are depreciated as per the Provisions of the Companies Act, 1956.

k) Depreciation on Fixed Assets is provided as follows:

i) Depreciation on Plant & Machinery not related to leases is provided on straight line method, in accordance with schedule XIV to the Companies Act, 1956.

ii) On written down value method on the other assets (excluding the assets given on lease on or after 1.4.1991),in accordance with Schedule XIV to the Companies Act, 1956 read with circular No. 1/86 dated 21.5.1986 issued by the Department of Company Affairs, Government of India.

iii) The Assets given on lease on or after 1.4.1991 are written off during the primary lease period taking the month as a unit.



 
Subscribe now to get personal finance updates in your inbox!