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Accounting Policies of Orosil Smiths India Ltd. Company

Mar 31, 2015

I. BACKGROUND

Orosil Smiths India Limited was incorporated in June 01, 1994 as per Companies Act, 1956, The Company operating in Gems and Jewellery sector.

Operational Outlook

During the Financial year ended March 31, 2015 the Company had a total income of Rs 37,205,116 (March 31, 2014 Rs 50,115,659) along with Loss after Tax of 2,766,710 (March 31, 2014 Rs 1,086,761). As at March 31, 2015 the Company's accumulated losses is Rs 8,595,404.

Share Holders having more than 5% shares of the Company has committed to provide continued operational and financial support to the Company. Accordingly, the accompanying financial statements have been prepared on a going concern basis.

1.1 Basis of preparation of financial statements

These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued amounts. These financial statements haye been prepared to comply in all material aspects with the accounting standards specified under Section 133 of the Companies Act, 2013 (the Act), read with Rule 7 of the Companies (Accounts) Rules, 2014.

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 Companies Act, 2013.

The accounting policies adopted in the preparation of these financial statements are consistent with those applied in previous year.

1.2 Tangible Assets

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

The cost of fixed assets not ready for their intended use is recorded as capital work-in-progress before such date. Cost of construction that relate directly to specific fixed assets and that are attributable to construction activity in general and can be allocated to specific fixed assets are included in capital work-in-progress.

Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Gains or losses arising from disposal of assets are measured as the differences between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss when the asset is disposed off.

Depreciation is provided on a pro-rata basis on Written Down Value Method (WDV) using the rates arrived based on the useful lives of assets specified in Part C of Schedule II thereto of the Companies Act, 2013.

1.3 Leases

Where the Company is the lessee

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.

1.4 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. Revenues from services are recognized as per the contractual arrangement.

1.5 Other Income

Interest Income:

Interest Income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

1.6 Employee benefits

Provident Fund: Contribution towards provident fund for certain employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.

Gratuity liability is a defined benefit obligation and is provided on the basis of an actuarial valuation on projected unit credit method. The Company recognizes the actuarial gains and losses in the Statement of profit & loss in the period in which they arise. ,

Liability for leave encashment is provided on the basis of an actuarial valuation on projected unit credit method. The Company recognizes the actuarial gains and losses in the Statement of profit & loss in the period in which they arise.

1.7 Current and deferred taxes

Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit for the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in the respective jurisdictions. Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. 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 assets can be realised.

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. At each Balance Sheet date, the Company re-assesses unrecognized deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws

Minimum Alternative Tax credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

1.8 Provisions and contingencies

Provisions: Provisions are recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

1.9 Earnings Per Share

In determining the Earnings Per Share (EPS), the Company considers the net profit after tax and includes the post tax effect of any extraordinary / exceptional item. In absence of any dilutive effect of equity shares, the basic and diluted EPS are calculated on the same basis. The number of shares used in computing basic and diluted earnings per shares, the weighted average number of equity shares outstanding during the year is used.

1.10 Segment Information

The Company operates under single reportable segment and hence requirement of Accounting Standard-17 "Segment Reporting" specified under Section 211 (3C) of the Act is not applicable.


Mar 31, 2014

Not Available.


Mar 31, 2012

(1) Basis of preparation of financial statements: -

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India and comply with the mandatory accounting standards as notified under the Companies (Accounting Standards) Rules, 2006, to the extent applicable and in accordance with the provisions of the Companies Act, 1956, as adopted consistently by the Company.

(2) Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses 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.

(3) 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.

Sale of Goods

Revenue from Sale of Goods is recognized when the significant risk and reward of ownership of goods are transferred to the customer and is stated net of sales tax and sales return.

Interest

Revenue is recognized on accrual basis.

Dividend

Revenue is recognized when the payment is received.

(4) Fixed Assets: - Tangible Assests

Fixed Assets are stated at the original cost inclusive of inward freight, incidental expenses related to acquisition and related pre-operational expenses.

INTangible Assests

Intangible Assests are stated at cost of acquisitions net of accumulated amortization/ depletion . All costs, including financing cost till commencement of commercial productionattributable to the intangible assets are capitalized.

5) Depreciation: - Depreciation has been provided on Written Down Value method at the rates

prescribed in Schedule XIV to the Companies Act, 1956. All assets costing Rs.5000 or below are depreciated in full by way of a one time depreciation charge. However no depreciation has been provided on Master Pieces of Gold and Silver, Library Books and Props. The Company's has not provided depreciation on the Web Portal - Jewelry YTT, as it was not in operation during the year. The Company will provide the depreciation on the Web Portal - Jewelry YTT, as and when it becomes operational.

Leasehold Improvements are amortized over the period of Lease.

(6) Inventories: - Method of Valuation

(a) Raw Material - at cost

(b) Finished Goods - at lower of cost or estimated realizable value.

(7) Provision for Income Tax: -

Provision for taxation has been ascertained as per the applicable provisions of the Income Tax Act, 1961.

(8) Deferred Taxation: -

Deferred tax is recognized, subject to the consideration of prudence 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 years.

(9) Borrowing Costs

Borrowing costs that are attributable to the acquisition of assets are capitalized as part of the cost of such Assets. All other borrowing costs are recognized as an expense in the period in which they are incurred.

(10) Investments

Investments are classified into Current and Long Term investments. Current investments are stated at lower of cost and fair value. Long term Investments are stated at cost.

(11) Retirement Benefits

Employees' benefits of short term nature are recognized as expenses as and when it accrues. Long term employee benefits (e.g. long-service leave) and post employment benefits (e.g. Gratuity) are recognized as expenses based on actuarial valuation at the end which takes into account actuarial gains and losses.

(12) Impairment of Assets: -

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

(13) Foreign Exchange Transactions:-

Transaction denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate at the date of the transactions or that approximate the actual rate at the date of transactions.

Monetary items denominated in foreign currencies at the year end are restated at year end rates. Non-Monetary foreign currency items are carried at cost.

Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

(14) Provisions, Contigent Liabilities and Contigent Assets

Provisions involving sunstantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is possible that there will be an outflow of resources. Contigent Liabilities are not recognized but are disclosed in notes. Contignent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

(1) Basis of preparation of financial statements: -

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India and comply with the mandatory accounting standards as notified under the Companies (Accounting Standards) Rules, 2006, to the extent applicable and in accordance with the provisions of the Companies Act, 1956, as adopted consistently by the Company.

(2) Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

(3) 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.

Sale of Goods

Revenue from Sale of Goods is recognized when the significant risk and reward of ownership of goods are transferred to the customer and is stated net of sales tax and sales return.

Training and Education Income

Revenue in respect of Training and Education is recognized on rendering of services, only when it is reasonably certain that the ultimate collection will be made.

Interest

Revenue is recognized on accrual basis.

Dividend

Revenue is recognized when the payment is received.

(4) Fixed Assets: -

Fixed Assets are stated at the original cost inclusive of inward freight, incidental expenses related to acquisition and related pre-operational expenses.

5) Depreciation: - Depreciation has been provided on Written Down Value method at the rates prescribed in Schedule XIV to the Companies Act, 1956. All assets costing Rs.5000 or below are depreciated in full by way of a one time depreciation charge. However no depreciation has been provided on Master Pieces of Gold and Silver, Library Books and Props. The Companys has not provided depreciation on the Web

Portal-Jewellery YTT, as it was not in operation during the year. The Company will provide the depreciation on the Web Portal - Jewellery YTT, as and when it becomes operational.

Leasehold Improvements are amortized over the period of Lease.

(6) Inventories: - Method of Valuation

(a) Raw Material - at cost

(b) Finished Goods - at lower of cost or estimated realizable value.

(7) Provision for Income Tax: -

Provision for taxation has been ascertained as per the applicable provisions of the Income Tax Act, 1961.

(8) Provision for Fringe Benefit Tax

Provision for Fringe Benefit Tax has been ascertained as per the applicable provisions of the Income Tax Act, 1961.

(9) Deferred Taxation: -

Deferred tax is recognized, subject to the consideration of prudence 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, years

(10) Borrowing Costs

Borrowing costs that are attributable to the acquisition of assets are capitalized as part of the cost of such Assets. All they other borrowing costs are recognized as an expense in the period in which are incurred.

(11) Investments

Investments are classified into Current and Long Term investments. Current investments are stated at lower of cost and fair value. Long term Investments are stated at cost. A Provision for diminution is made to recognize a decline, other than the temporary, in the value of Long-term Investments.

(12) Retirement Benefits

Employees benefits of short term nature are recognized as expenses as and when it accrues. Long term employee benefits (e.g. long-service leave) and post employment benefits (e.g. Gratuity) are recognized as expenses based on actuarial valuation at the end which takes into account actuarial gains and losses.

(13) Impairment of Assets:-

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

 
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