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Accounting Policies of Precision Electronics Ltd. Company

Mar 31, 2015

1.1. General

i) The accounts are prepared on historical cost convention, on accrual basis and on the principal of going concern.

ii) Accounting policies not specifically referred to otherwise, are consistent and in accordance with Indian generally accepted accounting practices comprising of the mandatory Accounting Standard, Guidance notes and other pronouncements issued by ICAI and the provision of the Companies Act, 2013.

1.2. Use of Estimates

The preparation of financial statement require estimates and assumption that affect the reported amounts of income and expenses of the period, the reported amounts of assets and liabilities and disclosers relating to contingent liabilities as on the date of financial statements. Difference between the actual result and estimated are recognized in period in which the result are known/materialized.

1.3. Fixed Assets:

i) Fixed Assets are stated at cost of acquisition less cenvat if any and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation except in the case of Leasehold land which has been revalued as on 31.3.2006.

ii) Fixed Assets are stated at cost less accumulated depreciation. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013, except software having future economic benefits more than a year, to be amortized in two to three years.

iii) Leasehold land is amortized over the years of lease.

iv) Fixed Assets costing below Rs. 5,000 is fully depreciated in year of purchase.

1.4. Trade receivable:

Trade receivables are stated after making adequate provision for doubtful debts, if any.

1.5. Loans & Advances:

Loans and Advances are stated after making adequate provision for doubtful advances, if any.

1.6. Contingent Liabilities:

Contingent liabilities are not provided for in the accounts and are shown separately in Notes on Accounts.

1.7. Revenue Recognition

i) Revenue from Infra activity.

Infra revenue and costs are recognized by reference to the stage of completion of the construction activity at the balance sheet date, as measured by the proportion that contact costs incurred for work performed to date bear to the estimated total contract costs. Where the outcome of the infra cannot be estimated reliably, revenue is recognized to the extent of the infra costs incurred if it is probable that they will be recoverable. In the case of contracts with defined milestones and assigned prices for each milestone, it recognises revenue on transfer of significant risks and rewards which coincides with achievement of milestone and its acceptance by its customers. Provision is made for all losses incurred to the balance sheet date. Any further losses that are foreseen in bringing contracts to completion are also recognised. Variations in contract work, claims and incentive payments are recognised to the extent that it is probable that they will result in revenue and they are capable of being reliably measured. Contract revenue in excess of billing is reflected as unbilled revenue and billing in excess of contract revenue is reflected as unearned revenue.

ii) Revenue other than Infra activity.

Sales include excise duty, Sales Tax/ VAT and are net of usual trade discounts, rebates.

iii) Scrap is accounted for as and when sold.

iv) Export incentives and insurance claims are accounted for on receipt basis.

1.8. Method of valuation of inventories is as under:

i) Raw material are valued at Cost, on Weighted average basis and non-moving Items are valued at net realizable value.

ii) Components, Stores & Spare parts are valued at cost, on FIFO basis.

iii) Finished goods and Traded Goods are valued at cost or net realizable value, whichever is lower.

iv) Goods-in-Process are valued at estimated cost.

v) Cost incurred that relate to future activities on the contract are recognized as "Contract work in progress". Contract work in progress comprising infra costs and other directly attributable overheads is valued at lower of cost and net realizable value.

1.9. Foreign Exchange Transactions

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the year are translated at contracted rates, when covered by foreign exchange contracts and at year end rates in all other cases.

iii) Gains and Losses on foreign exchange transaction/ translation other than those relating to fixed assets are recognized in the Profit and Loss Account. Gain or loss on translation of long term liabilities incurred to acquire fixed assets is treated as an adjustment to the carrying cost of such fixed assets.

1.10. Research & Development

Revenue Expenditure on R&D is charged to revenue under the respective heads of accounts. Capital Expenditure on R&D is treated as addition to Fixed Assets.

1.11. Technical know-how is accounted for on payment basis and is written-off over a period of six years from the year of payment.

1.12. Employees Benefits

The Company has taken Group Gratuity Policy with the Life Insurance Corporation of India ('LIC') for future payment of gratuities which is a defined benefit. The gratuity liability is determined based on an actuarial valuation performed by LIC.

Provision for Leave Encashment, which is a defined benefit, is made on an actuarial valuation carried out by an independent actuary.

Contribution to Provident Fund is accrued as per the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act 1952. Contribution payable to Provident fund is charged to Profit & Loss Account.

1.13. Provision for Current and Deferred Tax

Provision for current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per Income Tax Act 1961.

Deferred tax resulting from "Timing Differences" between book and taxable profit for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that the asset will be adjusted in the future

1.14. Segment Accounting:

i) Segment Revenue & Expenses:

Joint revenue & expenses of the segments are allocated among them on reasonable basis .All other segment revenue and expenses are directly attributed to the segments.

ii) Segment Assets & liabilities:

Segment assets include plant & machinery, Inventory, security deposit, earnest money and material-in- transit and segment liabilities include sundry creditors.

iii) Inter Segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.

1.15 Recognition of Prior Period Expenses & Prepaid Expenses:

Prepaid expenses and prior period expenses/income of items of Rs. 10,000/- and below are charged to natural head of accounts.




Mar 31, 2014

1.1. General

i) The accounts are prepared on historical cost convention, on accrual basis and on the principal of going concern.

ii) Accounting policies not specifically referred to otherwise, are consistent and in accordance with Indian generally accepted accounting practices comprising of the mandatory Accounting Standard, Guidance notes and other pronouncements issued by ICAI and the provision of the companies Act, 1956.

1.2. Use of Estimates

The preparation of financial statement require estimates and assumption that affect the reported amounts of income and expenses of the period, the reported amounts of assets and liabilities and disclosers relating to contingent liabilities as on the date of financial statements. Difference between the actual result and estimated are recognized in the period in which the result are known/materialized.

1.3. Fixed Assets:

i) Fixed Assets are stated at cost of acquisition less cenvat if any and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation except in the case of Leasehold land which has been revalued as on 31.3.2006.

ii) Fixed Assets are stated at cost less accumulated depreciation. Depreciation has been provided on the straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 except software having future economic benefits more than a year, to be amortized in two to three years.

iii) Leasehold land is amortized over the years of lease.

iv) Fixed Assets costing below Rs. 5000 is fully depreciated in year of purchase.

1.4. Trade receivable:

Trade receivables are stated after making adequate provision for doubtful debts, if any.

1.5. Loans & Advances:

Loans and Advances are stated after making adequate provision for doubtful advances, if any.

1.6. Contingent Liabilities:

Contingent liabilities are not provided for in the accounts and are shown separately in Notes on Accounts.

1.7. Revenue Recognition

i) Revenue from Infra activity.

Infra revenue and costs are recognized by reference to the stage of completion of the construction activity at the balance sheet date, as measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Where the outcome of the infra cannot be estimated reliably, revenue is recognized to the extent of the infra costs incurred if it is probable that they will be recoverable. In the case of contracts with defined milestones and assigned prices for each milestone, it recognises revenue on transfer of significant risks and rewards which coincides with achievement of milestone and its acceptance by its customers. Provision is made for all losses incurred to the balance sheet date. Any further losses that are foreseen in bringing contracts to completion are also recognised. Variations in contract work, claims and incentive payments are recognised to the extent that it is probable that they will result in revenue and they are capable of being reliably measured. Contract revenue in excess of billing is reflected as unbilled revenue and billing in excess of contract revenue is reflected as unearned revenue.

ii) Revenue other than Infra activity.

Sales include excise duty, Sales Tax/ VAT and are net of usual trade discounts, rebates.

iii) Scrap is accounted for as and when sold.

iv) Export incentives and insurance claims are accounted for on receipt basis.

1.8. Method of valuation of inventories is as under:

i) Raw material are valued at Cost, on Weighted average basis and non-moving Items are valued at net realizable value.

ii) Components, Stores & Spare parts are valued at cost, on FIFO basis.

iii) Finished goods & Traded Goods are valued at cost or net realizable value, whichever is lower.

iv) Goods-in-Process are valued at estimated cost.

v) Cost incurred that relate to future activities on the contract are recognized as "Contract work in progress". Contract work in progress comprising infra costs and other directly attributable overheads is valued at lower of cost and net realizable value.

1.9. Foreign Exchange Transactions

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the year are translated at contracted rates, when covered by foreign exchange contracts and at year end rates in all other cases.

iii) Gains and Losses on foreign exchange transaction/ translation other than those relating to fixed assets are recognized in the Profit and Loss Account. Gain or loss on translation of long term liabilities incurred to acquire fixed assets is treated as an adjustment to the carrying cost of such fixed assets.

1.10. Research & Development

Revenue Expenditure on R&D is charged to revenue under the respective heads of accounts. Capital Expenditure on R&D is treated as addition to Fixed Assets.

1.11. Technical know-how is accounted for on payment basis and is written-off over a period of six years from the year of payment.

1.12. Employees Benefits

The Company has taken Group Gratuity Policy with the Life Insurance Corporation of India (''LIC'') for future payment of gratuities which is a defined benefit. The gratuity liability is determined based on an actuarial valuation performed by LIC.

Provision for Leave Encashment, which is a defined benefit, is made on an actuarial valuation carried out by an independent actuary.

Contribution to Provident Fund is accrued as per the provisions of the Employees'' Provident Fund and Miscellaneous Provisions Act 1952. Contribution payable to Provident fund is charged to Profit & Loss Account.

1.13 Provision for Current and Deferred Tax

Provision for current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per Income Tax Act 1961.

Deferred tax resulting from "Timing Differences" between book and taxable profit for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that the asset will be adjusted in the future.

1.14. Segment Accounting:

i) Segment Revenue & Expenses:

Joint revenue & expenses of the segments are allocated among them on reasonable basis .All other segment revenue and expenses are directly attributed to the segments.

ii) Segment Assets & liabilities:

Segment assets include plant & machinery, Inventory, security deposit, earnest money and material-in-transit and segment liabilities include sundry creditors.

iii) Inter Segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.

1.15 Recognition of Prior Period Expenses & Prepaid Expenses:

Prepaid expenses and prior period expenses/income of items of Rs.10,000/- and below are charged to natural head of accounts.


Mar 31, 2013

1. General

(i) The accounts are prepared on historical cost convention, on accrual basis and on the principal of going concern.

(ii) Accounting policies not specifically referred to otherwise, are consistent and in accordance with Indian generally accepted accounting practices comprising of the mandatory Accounting Standard, Guidance notes and other pronouncements issued by ICAI and the provision of the companies Act, 1956.

2. Use of Estimates

The preparation of financial statement require estimates and assumption that affect the reported amounts of income and expenses of the period, the reported amounts of assets and liabilities and disclosers relating to contingent liabilities as on the date of financial statements. Difference between the actual result and estimated are recognized in the period in which the result are known/materialized.

3. Fixed Assets:

i) Fixed Assets are stated at cost of acquisition less cenvat if any and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation except in the case of Leasehold land which has been revalued as on 31.3.2006.

ii) Fixed Assets are stated at cost less accumulated depreciation. Depreciation has been provided on the straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 except software having future economic benefits more than a year, to be amortized in two to three years.

iii) Leasehold land is amortized over the years of lease.

4. Trade receivable:

Trade receivables are stated after making adequate provision for doubtful debts, if any.

5. Loans & Advances:

Loans and Advances are stated after making adequate provision for doubtful advances, if any.

6. Contingent Liabilities:

Contingent liabilities are not provided for in the accounts and are shown separately in Notes on Accounts.

7. Sales

Sales include excise duty, Sales Tax/ VAT and are net of usual trade discounts, rebates.

8. Method of valuation of inventories is as under:

i) Raw material At cost, on FIFO/weighted average basis, and non-moving Items are valued at net Releasable value.

Ii) Components, Stores & Spare parts

At cost, on FIFO basis

iii) Finished goods &

Traded Goods

At cost or net realizable value, whichever is lower

iv) Goods-in-Process At estimated cost.

9. Foreign Exchange Transactions

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the year are translated at contracted rates, when covered by foreign exchange contracts and at year end rates in all other cases.

iii) Gains and Losses on foreign exchange transaction/ translation other than those relating to fixed assets are recognized in the Profit and Loss Account. Gain or loss on translation of long term liabilities incurred to acquire fixed assets is treated as an adjustment to the carrying cost of such fixed assets.

10. Research & Development

Revenue Expenditure on R&D is charged to revenue under the respective heads of accounts. Capital Expenditure on R&D is treated as addition to Fixed Assets.

11. Technical know-how is accounted for on payment basis and is written-off over a period of six years from the year of payment.

12. Export incentives and insurance claims are accounted for on receipt basis.

13. Employees Benefits

The Company has taken Group Gratuity Policy with the Life Insurance Corporation of India (''LIC'') for future payment of gratuities which is a defined benefit. The gratuity liability is determined based on an actuarial valuation performed by LIC.

Provision for Leave Encashment, which is a defined benefit, is made on an actuarial valuation carried out by an independent actuary.

Contribution to Provident Fund is accrued as per the provisions of the Employees'' Provident Fund and Miscellaneous Provisions Act 1952. Contribution payable to Provident fund is charged to Profit & Loss Account.

14. Provision for Current and Deferred Tax

Provision for current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per Income Tax Act 1961.

Deferred tax resulting from "Timing Differences" between book and taxable profit for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that the asset will be adjusted in the future

15. Segment Accounting:

i) Segment Revenue & Expenses:

Joint revenue & expenses of the segments are allocated among them on reasonable basis .All other segment revenue and expenses are directly attributed to the segments.

ii) Segment Assets & liabilities:

Segment assets include plant & machinery, Inventory, security deposit, earnest money and material-in- transit and segment liabilities include sundry creditors.

iii) Inter Segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.


Mar 31, 2012

1. General

(i) The accounts are prepared on historical cost convention, on accrual basis and on the principal of going concern.

(ii) Accounting policies not specifically referred to otherwise, are consistent and in accordance with Indian generally accepted accounting practices comprising of the mandatory Accounting Standard, Guidance notes and other pronouncements issued by ICAI and the provision of the companies Act, 1956.

2. Use of Estimates

The preparation of financial statement require estimates and assumption that affect the reported amounts of income and expenses of the period, the reported amounts of assets and liabilities and disclosers relating to contingent liabilities as on the date of financial statements. Difference between the actual result and estimated are recognized in the period in which the result are known/materialized.

3. Fixed Assets:

i) Fixed Assets are stated at cost of acquisition less cenvat if any and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation except in the case of Leasehold land which has been revalued as on 31.3.2006.

ii) Fixed Assets are stated at cost less accumulated depreciation. Depreciation has been provided on the straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 except software having future economic benefits more than a year, to be amortized in two to three years.

iii) Leasehold land is amortized over the years of lease.

4. Trade receivable:

Trade receivables are stated after making adequate provision for doubtful debts, if any.

5. Loans & Advances:

Loans and Advances are stated after making adequate provision for doubtful advances, if any.

6. Contingent Liabilities:

Contingent liabilities are not provided for in the accounts and are shown separately in Notes on Accounts.

7. Sales

Sales include excise duty, Sales Tax/ VAT and are net of usual trade discounts, rebates.

8. Method of valuation of inventories is as under:

i) Raw material At cost, on FIFO/weighted average basis, and non-moving

Items are valued at net Releasable value.

ii) Components, Stores At cost, on FIFO basis & Spare parts

iii) Finished goods &

Traded Goods At cost or net realizable value, whichever is lower

iv) Goods-in-Process At estimated cost.

9. Foreign Exchange Transactions

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the year are translated at contracted rates, when covered by foreign exchange contracts and at year end rates in all other cases.

iii) Gains and Losses on foreign exchange transaction/ translation other than those relating to fixed assets are recognized in the Profit and Loss Account. Gain or loss on translation of long term liabilities incurred to acquire fixed assets is treated as an adjustment to the anything cost of such fixed assets.

10. Research & Development

Revenue Expenditure on R&D is charged to revenue under the respective heads of accounts. Capital Expenditure on R&D is treated as addition to Fixed Assets.

11. Technical know-how is accounted for on payment basis and is written-off over a period of six years from the year of payment.

12. Export incentives and insurance claims are accounted for on receipt basis.

13. Employees Benefits

The Company has taken Group Gratuity Policy with the Life Insurance Corporation of India ('LIC') for future payment of gratuities which is a defined benefit. The gratuity liability is determined based on an actuarial valuation performed by LIC.

Provision for Leave Encashment, which is a defined benefit, is made on an actuarial valuation carried out by an independent actuary.

Contribution to Provident Fund is accrued as per the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act 1952. Contribution payable to Provident fund is charged to Profit & Loss Account.

14. Provision for Current and Deferred Tax

Provision for current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per Income Tax Act 1961.

Deferred tax resulting from "Timing Differences" between book and taxable profit for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that the asset will be adjusted in the future

15. Segment Accounting:

i) Segment Revenue & Expenses:

Joint revenue & expenses of the segments are allocated among them on reasonable basis. All other segment revenue and expenses are directly attributed to the segments.

ii) Segment Assets & liabilities:

Segment assets include plant & machinery, Inventory, security deposit, earnest money and material- in-transit and segment liabilities include sundry creditors.

iii) Inter Segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.


Mar 31, 2011

A) General

i) The accounts are prepared on historical cost convention, on accrual basis and on the principal of going concern.

ii) Accounting policies not specifically referred to otherwise, are consistent and in accordance with Indian generally accepted accounting practices comprising of the mandatory Accounting Standard, Guidance notes and other pronouncements issued by ICAI and the provision of the companies Act, 1956.

b) Use of Estimates

The preparation of financial statement require estimates and assumption that affect the reported amounts of income and expenses of the period, the reported amounts of assets and liabilities and disclosers relating to contingent liabilities as on the date of financial statements. Difference between the actual result and estimated are recognized in the period in which the result are known/materialized.

c) Fixed Assets:

i) Fixed Assets are stated at cost of acquisition less cenvet if any and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation except in the case of Leasehold land which has been revalued as on 31.3.2006.

ii) Fixed Assets are stated at cost less accumulated depreciation. Depreciation has been provided on the straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 except software having future economic benefits more than a year, to be amortized in two to three years.

iii) Leasehold land is amortized over the years of lease.

d) Sundry Debtors:

Sundry Debtors are stated after making adequate provision for doubtful debts, if any.

e) Loans & Advances:

Loans and Advances are stated after making adequate provision for doubtful advances, if any.

f) Contingent Liabilities:

Contingent liabilities are not provided for in the accounts and are shown separately in Notes on Accounts.

g) Sales

Sales include excise duty, Sales Tax/ VAT and are net of usual trade discounts, rebates. h) Method of valuation of inventories is as under:

i) Raw material At cost, on FIFO/weighted average basis, and none moving

Items are valued at net Realisable value. ii) Components, Stores At cost, on FIFO basis & Spare parts

iii) Finished & Traded At cost or net realisable value, whichever Goods is lower

iv) Goods-in-Process At estimated cost.

i) Foreign Exchange Transactions

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the year are translated at contracted rates, when covered by foreign exchange contracts and at year endi rates in all other cases.

iii) Gains and Losses on foreign exchange transaction/ translation other than those relating to fixed assets are recognized in the Profit and Loss Account. Gain or loss on translation of long term liabilities incurred to acquire fixed assets is treated as an adjustment to the carrying cost of such fixed assets.

j) Research & Development

Revenue Expenditure on R&D is charged to revenue under the respective heads of accounts. Capital Expenditure on R&D is treated as addition to Fixed Assets.

k) Technical know-how is accounted for on payment basis and is written-off over a period of six years from the year of payment.

l) Export incentives and insurance claims are accounted for on receipt basis.

m) Investments

Investments are stated at Cost and where there is permanent diminution in the value of Investments a provision is made wherever applicable. Dividend will be accounted for as and when received.

n) Employees Benefits

The Company has taken Group Gratuity Policy with the Life Insurance Corporation of India ('LIC') for future payment of gratuities which is a defined benefit. The gratuity liability is determined based on an actuarial valuation performed by LIC.

Provision for Leave Encashment, which is a defined benefit, is made on an actuarial valuation carried out by an independent actuary.

Contribution to Provident Fund is accrued as per the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act 1952. Contribution payable to Provident fund is charged to Profit & Loss Account.

o) Provision for Current and Deferred Tax

Provision for current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per Income Tax Act 1961.

Deferred tax resulting from "Timing Differences" between book and taxable profit for the year is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that the asset will be adjusted in the future

p) SegmentAccounting:

i) Segment Revenue & Expenses:

Joint revenue & expenses of the segments are allocated among them on reasonable basis. All other segment revenue and expenses are directly attributed to the segments.

ii) Segment Assets & liabilities:

Segment assets include plant & machinery, Inventory, security deposit, earnest money and material- in-transit and segment liabilities include sundry creditors.

iii) Inter Segment sales:

Inter segment sales between operating segments are accounted for at market price. These transactions are eliminated in consolidation.

 
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