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Accounting Policies of Miven Machine Tools Ltd. Company

Mar 31, 2014

A. ACCRUAL SYSTEM OF ACCOUNTING :

i) The company follows the accrual system of accounting in respect of all items of expenditure except warranty claim and income.

ii) Warranty claims from customers are accounted in the year of claim / settlement. Non-provision for the same on accrual basis is not expected to have a material effect on. the account.

b. USE OF ESTIMATES:

The preparation of financial statements requires estimation and assumptions to be made that affect reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. The management believes that the estimates used in preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

c. FIXED ASSETS:

Fixed assets are stated at cost of acquisition inclusive of freight, duties, taxes and incidental expenses relating to acquisition, installation, erection and commissioning less depreciation. Internally manufactured assets are valued at cost or estimated market price whichever is lower

d. INVENTORIES:

Raw materials, stores'', spare parts, and components are valued on the basis of Weighted Average Method after providing for obsolescence. Work-in-process is valued at cost. Finished goods are valued at cost or net realisable value whichever is lower. Cost for the purpose of Work in Process and finished goods include material cost valued as per weighted average method and applicable conversion cost. As per Accounting Standard 2 excise duty on finished goods lying at works is also accounted and provided in the books of account. Materials in transit are valued at cost inclusive of Customs duty and other incidental expenses payable.

e. DEPRECIATION :

Depreciation oh all assets excepting vehicles and computers are charged on the straight-line method as contemplated in Section 205 (2) (b) of the Companies Act, 1956. Depreciation on vehicles has been charged on the Written Down Value method as contemplated Under Section 205 (2) (a) of the Companies Act, 1956. Depreciation rates are in accordance with Schedule XIV of Companies Act, 1956 except in respect of computers. Deprecation on computers is charged on straight line method at 33.33% p.a.

f. RESEARCH AND DEVELOPMENT EXPENDITURE :

Revenue expenditure in carrying out Research and Development activities is charged to profit & loss account of the year in which it is incurred.

g. REVENUE RECOGNITION :

i) Sales are recognised on shipment to customers after pre-inspection wherever applicable and include recovery towards excise duty.

ii) Interest income is recognized on time proportion basis.

iii) Dividend income is recognized, when the right to receive the dividend is established.

h. BORROWING COST:

Interest and other costs in connection with borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying assets are capitalized up to the date when such assets are ready for their intended use and other borrowing costs are charged to profit and loss account.

i) FOREIGN CURRENCY TRANSLATION :

Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transactions. The exchange differences arising on their settlement are dealt with in the Profit and Loss Account. All monetary items denominated in foreign currency are restated at the year-end exchange rate and the differences arising from such restatement are recognised in the Profit and Loss Account.

j) EMPLOYEE BENEFITS :

(i) Short Term Employee Benefits:

Employee benefits payable wholly within twelve months of rendering the service are classified as short term. Benefits such as salaries, bonus, exgratia etc. are recognised in the period in which the employee renders the related service.

(ii) Post Employment Benefits:

a) Defined Contribution Plans:

The Company has contributed to Provident, Pension, EDLI & Superannuation Funds which are defined contribution plans. The contributions paid/ payable under the scheme to the Regional Provident Fund Commissioner/Life Insurance Corporation of India is recognised during the year in which employee renders the related service.

b) Defined Benefit Plans :

Employees'' gratuity is defined benefit plan. The present value of the obligation under such plan has been determined based on completed service at the end of the year as per actuarial valuation under projected unit credit method. Actuarial gain / losses are recognized in profit and loss account immediately. Leave encashment is a defined benefit plan and is provided on accrual basis as per actuarial valuation,

k) TAXES ON INCOME :

Provision for current tax is made after considering any excess / short in earlier years. Deferred tax liability on account of timing differences are provided considering the tax rates and the tax laws enacted by the Balance Sheet date. However, deferred tax assets are recognised only if future profits are virtually certain.

i) CONTINGENT LIABILITIES AND PROVISIONS:

Financial effect of contingent liabilities is disclosed based on information available upto the dates on which financial statements are approved. However, where a reasonable estimate of financial effect cannot be made, suitable disclosures are made with regard to this fact and the existence and nature of the contingent liability.

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

m) IMPAIRMENT OF ASSETS :

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired; If any such indication exists, the Company estimates the recoverable amount, if the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the Profit & Loss account to the extent the carrying amount exceeds the recoverable amount.


Mar 31, 2012

1. ACCRUAL SYSTEM OF ACCOUNTING:

a) The company follows the accrual system of accounting in respect of all items of expenditure except warranty claim and income.

b) Warranty claims from customers are accounted in the year of claim/settlement. Non provision for the same on accrual basis is not expected to have a material effect on the account.

2. USE OF ESTIMATES:

The preparation of financial statements requires estimation and assumptions to be made that affect reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. The management believes that the estimates used in preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

3. FIXED ASSETS:

Fixed assets are stated at cost of acquisition inclusive of freight, duties, taxes and incidental expenses relating to acquisition, installation, erection and commissioning less depreciation. Internally manufactured assets are valued at cost or estimated market price whichever is lower.

4. INVENTORIES:

Raw materials, stores, spare parts and components are valued on the basis of Weighted average Method after providing for obsolescence. Work-in-process is valued at cost. Finished goods are valued at cost or net realisable value whichever is lower. Cost for the purpose of Work in Process and finished goods include material cost valued as per weighted average method and applicable conversion cost. As per Accounting Standard 2 excise duty on finished goods lying at works is also accounted and provided in the books of account. Materials in transit are valued at cost inclusive of Customs duty and other incidental expenses payable.

5. DEPRECIATION:

Depreciation on all assets excepting vehicles is charged on the straight-line method as contemplated in Section 205 (2)(b) of the Companies Act, 1956. Depreciation on vehicles has been charged on the Written Down Value method as contemplated Under Section 205 (2)(a) of the Companies Act, 1956. Depreciation rates are in accordance with Schedule XIV of Companies Act, 1956 except in respect of computers. Deprecation on computers is charged on straight line method at 33.33% p.a.

6. RESEARCH AND DEVELOPMENT EXPENDITURE:

Revenue expenditure in carrying out Research and Development activities is charged to profit and loss account of the year in which it is incurred.

7. REVENUE RECOGNITION:

Sale of Machine is recognised on shipment to customers after pre-inspection wherever applicable and includes recovery towards excise duty.

8. BORROWING COST:

Interest and other costs in connection with borrowing of funds to the extent related/attributed to the acquisition/construction of qualifying assets are capitalised upto the date when such assets are ready for their intended use and other borrowing costs are charged to profit and loss account.

9. FOREIGN CURRENCY TRANSLATION :

Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transactions. The exchange differences arising on their settlement are dealt with in the Profit and Loss Account. All monetary items denominated in foreign currency are restated at the year end exchange rate and the differences arising from such restatement are recognised in the Profit and Loss Account.

10. EMPLOYEE BENEFITS:

i) Short Term Employee Benefits: Employee benefits payable wholly within twelve months of rendering the service are classified as short term. Benefits such as salaries, bonus, exgratia, etc., are recognised in the period in which the employee renders the related service.

ii) Post Employment Benefits :

a) DEFINED CONTRIBUTION PLANS: The Company has contributed to Provident, Pension, EDLI & Superannuation Funds which are defined contribution plans. The contributions paid/payable under the scheme to the Regional Provident Fund Commissioner/Life Insurance Corporation of India is recognised during the year in which employee renders the related service.

b) DEFINED BENEFIT PLANS: Employees' gratuity is defined benefit plan. The present value of the obligation under such plan has been determined based on completed service at the end of the year as per actuarial valuation under projected unit credit method. Actuarial gain/losses are recognized in profit and loss account immediately. Leave encashment, a defined benefit plan is provided on accrual basis as per actuarial valuation.

11. TAXES ON INCOME:

Provision for current tax is made after considering any excess/short in earlier years. Deferred tax liability on account of timing differences are provided considering the tax rates and the tax laws enacted by the Balance Sheet date. However, deffered tax assets are recognised only if future profits are virtually certain.

12. CONTINGENT LIABILITIES AND PROVISIONS :

Financial effect of contingent liabilities is disclosed based on information available upto the dates on which financial statements are approved. However, where a reasonable estimate of financial effect cannot be made, suitable disclosures are made with regard to this fact and the existence and nature of the contingent liability.

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

13. IMPAIRMENT OF ASSETS :

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in the Profit and Loss account to the extent the carrying amount exceeds the recoverable amount.


Mar 31, 2010

1. ACCRUAL SYSTEM OF ACCOUNTING

a) The company follows the accrual system of accounting in respect of all items of expenditure except warranty claim and income.

b) Warranty claims from customers are accounted in the year of claim 7 settlement. Non-provision for the same on accrual basis is not expected to have a material effect on the account.

2. USE OF ESTIMATES

The preparation of financial statements requires estimation and assumptions to be made that affect reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. The management believes that the estimates used in preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

3. fixed Assets

Fixed assets are stated at cost of acquisition inclusive of freight, duties, taxes and incidental expenses relating to acquisition, installation, erection and commissioning less depreciation.

Internally manufactured assets are valued at cost or estimated market price whichever is lower.

4. INVENTORIES

Raw materials, stores, spare parts and components are valued on the basis of Weighted Average Method after providing for obsolescence. Work-in-process is valued at cost. Finished goods are valued at cost or net realisable value whichever is lower. Cost for the purpose of Work in Process and finished goods include material cost valued as per weighted average method and applicable conversion cost. As per Accounting Standard 2 excise duty on-finished goods lying at works is also accounted and provided in the books of account. Materials in transit are valued at cost inclusive of Customs duty and other incidental expenses payable.

5. DEPRECIATION

Depreciation on all assets excepting vehicles is charged on the straight-line method as contemplated in Section 205 (2) (b) of the Companies Act, T956. Depreciation on vehicles has been charged on the Written Down Value method as contemplated Under Section 205 (2) (a) of the Companies Act, 1956. Depreciation rates are in accordance with Schedule XIV of the Companies Act, 1956 except in respect of computers. Depreciation on computers is charged on straight line method at 33.33% p.a.

6. RESEARCH AND DEVELOPMENT EXPENDITURE

Revenue expenditure in carrying out Research and Development activities is charged to profit & loss account of the year in which it is incurred.

7. REVENUE RECOGNITION

Sale of Machine is recognised on shipment to customers after pre-inspection wherever applicable and includes recovery towards excise duty..

8. BORROWING COST

Interest and other costs in connection with borrowing of funds to the extent related / attributed to the acquisition / construction of qualifying assets are capitalised up to the date when such assets are ready for their intended use and other borrowing costs are charged to profit and loss account.

9. FOREIGN CURRENCY TRANSLATION

Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transactions. The exchange differences arising on their settlement are dealt with in the. Profit and Loss Account. All monetary items denominated in foreign currency are restated at the year-end exchange rate and the differences arising from such. restatement are recognised in the Profit and Loss Account.

10. EMPLOYEE BENEFITS

(i) Short Term Employee Benefits :

Employee benefits payable wholly within twelve months of rendering the service are classified as short term. Benefits such as salaries, bonus, exgratia etc. are recognised in the period in which the employee renders the related service.

(ii) Post Employment Benefits :

a) Defined Contribution Plans :

The Company has contributed to Provident, Pension, EDLI and Superannuation Funds which are defined contribution plans. The contribution paid/payable under the scheme to the Regional Provident Fund Commissioner / Life Insurance Corporation of India is recognised during the year in which employee renders the related service. The Company also contributes to the Officers Provident Fund Trust for a few senior employees in respect of which interest shortfall, if any, is accounted on a year to year basis.

b) Defined Benefit Plans :

Employees gratuity is defined benefit plan. The present value of the obligation under such plan has been determined based on completed service at the end of the year as per acturial valuation under projected unit credit method. Acturial gain / losses are recognized in profit and loss account immediately. Leave encashment a defined benefit plan is provided on accrual basis as per actuarial valuation.

11. TAXES ON INCOME

Provision for current tax is made after considering any excess / short in earlier years. Deferred tax liability on account of timing differences are provided considering the tax rates and the tax laws enacted by the Balance Sheet date. However, deferred tax assets are recognised only if future profits are virtually certain.

12. CONTINGENT LIABILITIES AND PROVISIONS

Financial effect of contingent liabilities is disclosed based on information available upto the dates on which financial statements are approved. However, where a reasonable estimate of financial effect cannot be made, suitable disclosures are made with regard, to this fact and the existence and nature of the contingent liability.

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

13. IMPAIRMENT OF ASSETS

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is, recognized in the profit & Loss account to the extent the carrying amount exceeds the recoverable amount.