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Accounting Policies of Lesha Industries Ltd. Company

Mar 31, 2015

Company Overview

Lesha Industries Limited ("the company") is a listed company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company is engaged in the business of trading of various steel products and in the electronic items.The company is listed on Bombay Stock Exchange.

Basis for Preparation of Financial statements

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, on the basis of going concern under the historical cost convention and also on accrual basis. These financial statements comply, in all material aspects, with the provisions the Companies Act, 2013 (to the extent applicable) and also accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006, which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. All the divisions of the Company have normal operating cycle of less than twelve months, hence a period of twelve months has been considered for bifurcation of assets and liabilities into current and non-current as required by Schedule III to the Companies Act, 2013 for preparation of Financial Statements

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

Use of Estimates

The preparation of financial statements is conformity with generally accepted accounting principles requires management to make assumptions and estimates, which it believes are reasonable under the circumstances that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

Inventories

* The inventories including stock of shares are valued on the Cost basis.

* Cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.

Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit or (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cashflows from operating, investing and financing activities of the company are segregated based on the available information.

Fixed assets

Fixed Assets are stated at cost less depreciation. Cost comprises of cost of acquisition and any attributable cost of bringing the assets to the condition for its intended use.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Depreciation and Amortization

Depreciation on fixed assets is calculated on a SLM basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013, whichever is higher. The company has used the following rates to provide depreciation on its fixed assets.

Asset Useful Life

Office equipment 5 Years

Furniture 10 Years

Office Premise 60 Years

Vehicle 10 Years

Plant & Machinery 15 Years

Impairment of assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Revenue Recognition

The principles of revenue recognition are given below:

* General systems of accounting is mercantile, accordingly the income/expenditure are recognized on accrual basis on reasonable certainty concept.

* Sales of goods traded accounted net off VAT receivable and payable and in case of share trading are accounted net off of other expenses such as STT, Service tax and Transaction charges etc.

* Dividend income is recognized when right to receive payment is established.

Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Liabilities which are of contingent nature are not provided but are disclosed at their estimated amount in the notes forming part of the accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

Investments

Investments that are readily realizable 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 investment are classified as long-term investments. Current investments are measured at cost or market value whichever is lower,determined on an individual investment basis. Long Term Investments are stated at cost.

Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

Event occurring after the Balance Sheet Date

No significant events which could affect the financial position as on 31st March, 2015, to a material extent have been reported by the management, after the Balance Sheet date till the signing the report.

Prior period Items

Prior period expenses/income is accounted for under respective heads. Material items, if any, are disclosed separately by way of note.

Preliminary Expense

Preliminary expenses and Pre - Operative expenses has not been amortized.

Earning Per Share

The earning considered in ascertaining the Company's Earnings Per Share (EPS) comprises the net profit after tax. The number of shares used in computing Basic and diluted EPS is weighted average number of shares outstanding during the year as per the guidelines of AS-20 and calculation of EPS is shown in notes to account.


Mar 31, 2014

A) Basis of preparation of Financial Statements:

i) The financial statements have been prepared under the historical cost convention on accrual basis as a going concern in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 and in accordance with applicable accounting standard as prescribed by the Companies (Accounting Standard) Rules, 2006.

ii) Accounting policies not specifically referred to otherwise are in consonance with generally accepted accounting principles.

B) Fixed Assets and Depreciation:

Fixed assets are stated at cost. Depreciation has been provided on Straight Line Method (SLM) at rates as provided in Schedule XIV of the Companies Act, 1956.

C) 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 cost are recognized as an expense in the period in which these are incurred.

D) Revenue Recognition:

i) All income and expenditure items having material bearing on the financial statements are recognised on accrual basis.

ii) In case of Steel & Toys business, the purchase and sales are accounted net off of VAT receivable and payable and in case of Share trading sales and purchase are accounted net off of other expenses such as STT, Service Tax and Transaction charges etc.

E) Valuation of Closing Stock:

1) Stock of Shares is valued at cost

F) Income-tax expenses:

- Income tax expenses comprises current tax and deferred tax charge or credit.

- Current Tax

The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the company.

- Deferred Tax

Deferred Tax charge or credit reflects the tax effects of timing differences between accounting Income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantially enacted by the Balance Sheet date as per the Accounting Standard - 22.

In view of negligible difference in taxable profit and book profit, the impact of deferred tax assets/ liability is not considered.

G) Investment:

Investment is shown at cost.

H) Prior Period Adjustment :

Expense and income pertaining to earlier/previous years are accounted as prior period item.

I) Preliminary and Pre-operative :

Preliminary expenses and Pre-operative expenses has not been amortized.

J) Provision, Contingent Liabilities and Contingent Assets:

Provisions are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources to settle the obligation that can be reliably estimated. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed.

K) Employee Benefits :

The company is not liable to the provision of Provident Fund Act or ESI Act and no provision is required for Gratuity liability as non of the employee has completed eligible period of employment.

Further the benefit in terms of Leave Encashment is paid during the same year as the employees are not allowed to accumulate the leaves entitled during the year.

L) Impairment of assets:

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which assets is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been change in the estimate of recoverable amount.


Mar 31, 2013

A) Basis of preparation of Financial Statements:

i) The financial statements have been prepared under the historical cost convention on accrual basis as a going concern in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 and in accordance with applicable accounting standard as prescribed by the Companies (Accounting Standard) Rules, 2006.

ii) Accounting policies not specifically referred to otherwise are in consonance with generally accepted accounting principles.

B) Fixed Assets and Depredation:

Fixed assets are stated at cost. Depreciation has been provided on Straight Line Method (SLM) at rates as provided in Schedule XIV of the Companies Act, 1956.

C) 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 cost are recognized as an expense in the period in which these are incurred.

D) Revenue Recognition:

i) All income and expenditure items having material bearing on the financial statements are recognised on accrual basis.

ii) In case of Steel business, the purchase and sales are accounted net off of VAT receivable and payable and in case of Share trading sales and purchase are accounted net off of other expenses such as STT, Service Tax and Transaction charges etc.

E) Valuation of Closing Stock:

1) Stock of Steel Products is valued at cost or market price whichever is lower basis.

2) Stock of Shares is valued at cost

F) Income-tax expenses:

Income tax expenses comprises current tax and deferred tax charge or credit.

Current Tax

The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the company.

Deferred Tax

Deferred Tax Assets as on 31/03/2013 has not been recognised since, there is no reasonable certainty of taxable income being available against which such deferred tax assets can be realised.

G) Investment:

Investment is shown at cost.

H) Prior Period Adjustment:

Expense and income pertaining to earlier/previous years are accounted as prior period item.

I) Preliminary and Pre-operative :

Preliminary expenditure has been amortized over a period of 5 years in equal installments.

3) Provision, Contingent Liabilities and Contingent Assets:

Provisions are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources to settle the obligation that can be reliably estimated. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed.

K) Employee Benefits :

The company is not liable to the provision of Provident Fund Act or ESI Act and no provision is required for Gratuity liability as non of the employee has completed eligible period of employment.

Further the benefit in terms of Leave Encashment is paid during the same year as the employees are not allowed to accumulate the leaves entitled during the year.


Mar 31, 2012

A) Basis of preparation of Financial Statements:

i) The financial statements have been prepared under the historical cost convention on accrual basis as a going concern in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 and in accordance with applicable accounting stan dard as prescribed by the Companies (Accounting Standard) Rules, 2006.

ii) Accounting policies not specifically referred to otherwise are in consonance with generally accepted accounting principles.

B) Fixed Assets and Depreciation:

Fixed assets are stated at cost. Depreciation has been provided on Straight Line Method (SLM) at rates as provided in Schedule XIV of the Companies Act, 1956.

C) 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 cost are recognized as an expense in the period in which these are incurred.

D) Revenue Recognition:

i) All income and expenditure items having material bearing on the financial statements are recognised on accrual basis.

ii) In case of Steel business, the purchase and sales are accounted net off of VAT receivable and payable and in case of Share trading sales and purchase are accounted net off of other expenses such as STT, Service Tax and Transaction charges etc.

E) Valuation of Closing Stock:

1) Stock of Steel Products is valued at cost or market price whichever is lower basis.

2) Stock of Shares is valued at cost

F) Income-tax expenses:

- Income tax expenses comprises current tax and deferred tax charge or credit.

- Current Tax

The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the company.

- Deferred Tax

Deferred Tax charge or credit reflects the tax effects of timing differences between accounting Income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantially enacted by the balance sheet date as per the Accounting Standard - 22.

G) Investment:

Investment is shown at cost.

H) Prior Period Adjustment :

Expense and income pertaining to earlier/previous years are accounted as prior period item.

I) Preliminary and Pre-operative :

Preliminary expenditure has been amortized over a period of 5 years in equal installments.

J) Provision, Contingent Liabilities and Contingent Assets:

Provisions are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources to settle the obligation that can be reliably estimated. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed.


Mar 31, 2009

I) Basis of preparation of Financial Statements: The financial statements have been prepared under the historical cost convention in accordance with the normally accepted accounting principles and the provisions of the Companies Act, 1956.

ii) Basis of Accounting:

All income and expenditure items having a material bearing on the financial statements are recognised on accrual basis.

iii) Fixed Assets and Depreciation:

Fixed assets are stated at cost. Depreciation has been provided on Straight Line Method (SLM) at rates as provided in Schedule XIV of the Companies Act, 1956.

iv) Deferred Tax:

Deferred Tax is accounted by computing the tax effect of timing difference which arise during "the year and reverse in subsequent period.

v) Investment:

Investment is shown at cost. provision against diminution in value of quoted investment is not made, where in the opinion of the management, diminution is not a permanent nature.

vi) Preliminary and Pre- operative :

Preliminary expenditure has been amortized over a period of 10 years in equal installments.


Mar 31, 2008

I) Basis of preparation of Financial Statements: The financial statements have been prepared under the historical cost convention in accordance with the normally accepted accounting principles and the provisions of the Companies Act, 1956.

ii) Basis of Accounting:

All income and expenditure items having a material bearing on the financial statements are recognised on accrual basis.

iii) Fixed Assets and Depreciation:

Fixed assets are stated at cost. Depreciation has been provided on Straight Line Method (SLM) at rates as provided in Schedule XIV of the Companies Act, 1956.

iv) Deferred Tax:

Deferred Tax is accounted by computing the tax effect of timing difference which arise during "the year and reverse in subsequent period.

v) Investment:

Investment is shown at cost. provision against diminution in value of quoted investment is not made, where in the opinion of the management, diminution is not a permanent nature.

vi) Preliminary and Expenses :

Preliminary expenditure has been amortized over a period of 10 years in equal installments.

 
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