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

Accounting Policies of Pact Industries Ltd. Company

Mar 31, 2015

A) BASIS OF PREPARATION

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules,2006, as amended] and the other relevant provisions of the Companies Act,1956.

b) REVENUE RECOGNITION:

Sales:

Revenue from sale of goods is recognized :

(i) when all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

(ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

Interest:

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

Benefit under Duty Entitlement Pass Book Scheme / Duty Drawback Scheme Revenue in respect of the above benefit is recognized on post export basis.

Insurance and Other Claims

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

c) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect 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 expenses during the year. Example of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, the useful lives of depreciable fixed assets and provisions for impairment.

d) FIXED ASSETS:

Fixed assets are stated at historical cost less accumulated depreciation. Interest on borrowed money allocated to and utilized for qualifying fixed assets, pertaining to the period up to the date of capitalization is capitalized. Assets acquired on direct finance lease are capitalized at the gross value and interest thereon is charged to profit and loss account. Intangible assets are stated at the consideration paid for acquisition less accumulated amortization . Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date and the cost of fixed assets not ready for use before such date are disclosed under capital work-in-progress

e) IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. In respect of goodwill the impairment loss will be reversed only when it was caused by specific external events and their effects have been reversed by subsequent external event..

f) INVENTORIES:

Raw materials, sub-assemblies and components are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at cost, less provision for obsolescence. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

g) TAXATION:

Current income tax expense comprises taxes on income from operations in India. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.Deferred tax expense or benefit is recognised 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 periods. 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.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance taxes paid and income tax provisions arising in the same tax jurisdiction and where the Company intends to settle the asset and liability on a net basis. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

h) FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Exchange differences arising on the settlement of monetary items or on reporting respective company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements ,are recognised as income or as expenses in the year in which they arise.

i) EMPLOYEE RETIREMENT BENEFITS :

Provident fund:

Employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee's salary. A contribution is made to the provident fund trust is made to the Government's provident fund. During the year Rs 87106.00 have been contributed towards the contribution plan.

j) WRITE OF MISCELLANEOUS EXP:

Revenue Expenditure is written off over as period of 10 years in accordance with provision of section 35-d of Income-Tax Act, 1961.

k) PROVISIONS, CONTIGENT LIABILITIES AND CONTIGENT ASSETS:

A provision is recognised when the Company has 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 reliable estimate can be made. Provisions (excluding retirement benefits) 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. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

l) CASH FLOW STATEMENT

Cash flows are reported using indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

m) CASH & CASH EQUIVALENTS

The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.


Mar 31, 2014

A) BASIS OF PREPARATION

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules,2006, as amended] and the other relevant provisions of the Companies Act,1956.

b) REVENUE RECOGNITION: Sales:

Revenue from sale of goods is recognized :

(i) when all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

(ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Interest:

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable Benefit under Duty Entitlement Pass Book Scheme / Duty Drawback Scheme Revenue in respect of the above benefit is recognised on post export basis.

Insurance and Other Claims

Revenue in respect of claims is recognised when no significant uncertainity exists with regard to the amount to be realised and the ultimate collection thereof.

c) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect 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 expenses during the year. Example of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, the useful lives of depreciable fixed assets and provisions for impairment.

d) FIXED ASSETS :

Fixed assets are stated at historical cost less accumulated depreciation.Interest on borrowed money allocated to and utilized for qualifying fixed assets, pertaining to the period up to the date of capitalization is capitalized. Assets acquired on direct finance lease are capitalized at the gross value and interest thereon is charged to profit and loss account. Intangible assets are stated at the consideration paid for acquisition less accumulated amortization .Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date and the cost of fixed assets not ready for use before such date are disclosed under capital work-in-progress

e) IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. In respect of goodwill the impairment loss will be reversed only when it was caused by specific external events and their effects have been reversed by subsequent external event..

f) INVENTORIES:

Raw materials, sub-assemblies and components are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at cost, less provision for obsolescence. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

g) TAXATION:

Current income tax expense comprises taxes on income from operations in India. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. 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.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets.Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance taxes paid and income tax provisions arising in the same tax jurisdiction and where the Company intends to settle the asset and liability on a net basis.The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

h) FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.Exchange differences arising on the settlement of monetary items or on reporting respective company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements ,are recognised as income or as expenses in the year in which they arise.

i) EMPLOYEE RETIREMENT BENEFITS :

Provident fund:

Employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee''ssalary. A contribution is made to the provident fund trust is made to the Government''s provident fund.During the year Rs 130713.00 have been contributed towards the contribution plan.

j) WRITE OF MISCELLANEOUS EXP :

Revenue Expenditure is written off over as period of 10 years in accordance with provision of section 35-d of Income-Tax Act, 1961.

k) PROVISIONS, CONTIGENT LIABILITIES AND CONTIGENT ASSETS:

A provision is recognised when the Company has 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 reliable estimate can be made. Provisions (excluding retirement benefits) 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. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

l) CASH FLOW STATEMENT

Cash flows are reported using indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

m) CASH & CASH EQUIVALENTS

The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.


Mar 31, 2013

A) BASIS OF PREPARATION

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards! Rules,2006, as amended] and the other retevant provisions of the Companies Act,1956.

b) REVENUE RECOGNITION:

Sales:

Revenue from sale of goods is recognized.

(i) when all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

(it) No significant uncertainly exists regarding too amount of the consideration that will tie derived from the sale of goods

Interest:

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable Benefit under Duty Entitlement Pass Bock Scheme / Duty Drawback Scheme Revenue in respect of the above benefit is recognised on post export basis.

Insurance and Other Claims

Revenue in respect of claims is recognised when no significant uncertainly exists with regard to the amount to be realised and the ultimate collection thereof.

c) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect 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 expenses during the year Example of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, the useful fives of depreciable fixed assets anti provisions for impairment.

d) FIXED ASSETS

Fixed assets are slated at historical cost less accumulaled depreciation Interest on borrowed money allocated to and utilized for qualifying fixed assets, pertaining to the period up to the dale of capitalization is capitalized Assets acquired on direct finance lease are capitalized at the gross value and interest thereon is charged Id profit and loss account Intangible assets are stated at the consideration paid for acquisition less accumulaled amortization Advances paid towards lire acquisition of fixed assets outstanding as of each balance sheet dale and the cost of fixed assets not ready for use before such dale arc disclosed under capital work-in-

e) IMPAIRMENT OF ASSETS

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such Indication exists, the Company estimates the recoverable amount of toe asset If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than 4s carrying amount. the carrying amount Is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. It at the balance sheet dale there Is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical coat. In respect ot goodwill the impairment toss will be reversed only when it was caused by specific external events and their effects have bean reversed by subsequent external event..

f) INVENTORIES:

Raw materials sub-assemblies and components are carried a! the lower of cost and net realisable value. Cost Is determined on a weighted average basis Purchased goods-in -transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at cost less provision for obsolescence Finished goods produced or purchased by the Company are carried at tower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

g) TAXATION:

Current income tax expense comprises faxes on Income from operations In India. Income tax payable in India is determined In accordance with the provisions of the Income Tax Act. 1961 Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods Deferred tax assets and liabilities are measured using the lax rales and tax laws that have been enacted or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of tosses, deferred lax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable Income will Be available to realise such assets 111 other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise those assets Advance taxes and provisions for current Income taxes are presented in the balance sheet after off setting advance taxes paid and Income tax provisions arising in the same tax jurisdiction and where the Company Intends lo settle the asset and liability on a net basis.The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

h) FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the Foreign currency at the dale of the transaction Exchange differences arising on the settlement of monetary items or on reporting respective company's monetary items at rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognised as income or as expenses in the year in which they arise

i) EMPLOYEE RETIREMENT BENEFITS Provident fund:

Employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal lo 12% of the covered employee salary A contribution is made to the provident fund trust is made to the Government's provident fund. During the year Rs 1 40484.00 have Been contributed towards the contribution plan

j) WRITE OF MISCELLANEOUS EXP

Revenue Expenditure is written off over as period of 10 years In accordance with provision of section 35-d of Income-Tax Act. 1961,

k) PROVISIONS. CONTIGENT LIABILITIES AND CONTIGENT ASSETS:

A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required lo settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required lo settle toe obligation at the balance sheet dale These are reviewed at each balance Sheet date and adjusted to reflect the current best estimates: Contingent liabilities are not recognised in the financial statements. A contingent asset Is neither recognised nor disclosed in the financial statements

l) CASH FLOW STATEMENT

Cash flows are reported using indirect method, whereby net profit before lax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of post or future cash receipts or payments The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

m) CASH & CASH EQUIVALENTS

The Company considers at highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the dale al purchase, to be cash equivalents.

Depreciation

The Company has provided for depredation al the rates specified In Schedule XIV to the Companies Act. 1956, except In cases of the following assets, which are depreciated at commercial rales, which are higher than the rates specified In Schedule XIV.

Investments

Long term investments are stated at cost less provision for diminution in the value of such investments. Diminution in value Is provided for where the management is of the opinion that the diminution is of permanent nature. Short term investments are valued at lower of cost and net realizable value

Borrowing casts

Borrowing costs directly attributable to acquisition or construction of fixed assets, which necessarily lake a substantial period of lime to get ready for their intended use are capitalised. Borrowing cost which are not relable to qualifying asset are recognized as an expense In the period in which they are incurred.

Previous Year figures ended on 31.03.2012 have been given and same have been regrouped/rearranged lor comparison. Contingent Liabilities not provided for in respect of business during the year is nil.

Debtors &Creditors Confirmations

The use of confirmation evidence is usually very important in the audit of trade debtors & creditors because there are few other sources of external corroborative evidence. II is usually suitable when the majority of the credit customers are reasonable-sized businesses because existence is an important assertion being verified, It is important that the source from which the sample is selected is tested for completeness this usually requires selecting the sample from a list of Balances that has been tested against the sales & purchase ledger repectively and totaled and agreed with the general ledger balance Balance of debtor & creditors, Loans and advances are subject to confirmation and are taken/included in financial statement on the basis of entries in foe books of accounts of the concern.


Mar 31, 2012

The financial statements are prepared under the historical cost convention, on accrual basis of accounting, in accordance with the Accepted Accounting Principles in India and comply with the mandatory Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006, to the extent applicable and the presentational requirements of the Companies Act, 1956. The accounting polices followed are stated below:

a) ACCOUNTING METHOD :

The company has adopted the mercantile system of accounting in preparation of the financial statements.

b) FIXED ASSETS :

The Company has stated Fixed Assets at cost of acquisition/construction net of Cenvat credit, including all incidental expenses attributable to the acquisition and installation of assets, upto the date when the assets are ready for use. The cost includes all pre- operative expenses relating to construction/pre-installation period including direct and allocable indirect expenses. During the year ended 31.03.2012 the company has converted some of its fixed assets into stock in trade, as a result of which the value of the assets converted into stock in trade had been deducted from the machinery block of the fixed assets. The treatment given is in conformity with the AS-10 "fixed assets" issued by ICAI. The value of the asset converted and the block under which it falls is Rs. 9294027.91/- and the same has being disclosed under the Note-12 of the balance sheet under the head "Inventories".

c) DEPRECIATION :

The Company has been charged on fixed assets as per the rates prescribed in the Companies Act, 1956 during the year. During the year ended 31.03.2012 the company has converted some of its fixed assets into stock in trade, as a result of which the value of the assets converted into stock in trade had been deducted from the machinery block of the fixed assets. As per the guidelines laid down by the AS-6 "Depreciation Accounting" the company had reduced the amount of the accumulated depreciation standing in the books against these assets converted into stock in trade. The same had been adjusted against the Gross block to give a fair view of the present standing of the Block in the books of the company. The amount adjusted is as follows:

The depreciation on this block is claimed after the adjustment had been done on the remaining assets.

d) INVENTORIES:

Stock have been Valued at cost or market price, which ever is lower. During the year some fixed assets have been converted into stock in trade. The same has being disclosed along with the normal inventories under the Note-12 "inventories".

e) EMPLOYEE BENEFITS & RETIREMENT BENEFITS :

(i) EMPLOYEE BENEFITS:

The company had contributed Rs. 114708.00/- to the funds like E.S.I. & E.P.F. for the benefit of the employees. Apart from this the company had also paid Rs. 201467.00/- & Rs. 116010.00/- to employees as Bonus & Leave with wages during the year.

(ii) RETIREMENT BENEFITS:

Since none of employees completed the continues period of 5 years as stipulated under the Payment of Gratuity act. No provision for gratuity has been made.

f) WRITE OF MISCELLANEOUS EXP :

Revenue Expenditure if any is written off over the period as is described & in accordance with provisions of section 35-d of Income-Tax Act, 1961.


Mar 31, 2011

The financial statement have been prepared in accordance with accepted accounting Standards and relevant Presentations requirement of the convention and on the accounting policies followed which are stated below:

a) ACCOUNTING METHOD

The company has adopted the mercantile system of accounting in preparation of the financial statements.

b) FIXED ASSETS

The Company has stated Fixed Assets at cost of acquisition/construction. The cost includes all pre-operative expenses relating to construction/pre-installation period including direct and allocable indirect expenses.

c) DEPRECIATION

1) Fixed Assets figures have been shown at book value , depreciation upto date have been credited to the separe reserve a/c.

2) The company has provided depreciation on W.D.V. method as per the Inocme Tax Act,1961.

d) INVENTORIES

Inventories has been valued at cost or market price whichever is lower.

e) RETIREMENT BENEFITS

Since none of employees completed the continues period of 5 years as stipulated under the Payment of Gratuity act. No provisions for gratuity has been made.

e) WRITE OF MISCELLANEOUS EXP.

Revenue Expenditure is written off over as period of 10 years in accordance with provision of section 35-d of Income-Tax Act, 1961.

 
Subscribe now to get personal finance updates in your inbox!