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Accounting Policies of Prime Industries Ltd. Company

Mar 31, 2014

A. Basis of Preparation of Financial Statements

The financial statements are prepared on historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) and applicable accounting standards issued by the Institute of Chartered Accountants of India and relevant provisions of Companies Act, 1956 and on the basis of going concern .

B. Fixed Assets

I) Fixed assets are stated at cost of acquisition including taxes, duties and other direct and indirect expenses incidental to acquisition and installation / construction.

II) The carrying amount of assets is reviewed at each balance sheet date to determine if there is any indications of impairment thereof, based on external /internal factors. Impairment loss has been recognized and charged to Statement of profit & loss .

C. Depreciation and Amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

D. Impairment of Assets

The company is making an assessment whether any indication exists that an asset has been impaired at the end of the year. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

E. Investments

Long term investments are valued at cost unless there is a decline in value other than temporary. Current investments are stated at lower of Cost or Fair Value.

F. Inventories

Inventories are valued at the lower of cost and the net realisable value.

G. Revenue Recognition

The company follows the mercantile system of accounting and recognizes profit or loss on that basis.

H. Employee Benefits

The Company has provided the provision for the gratuity and charges to revenue. Provident /Pension Fund applicable.

I. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

J. Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

K. Provisions and contingencies

Contingent liabilities, if material, are disclosed by way of notes, contingent assets are not recognized or disclosed in the financial statements, A provision is recognized when an enterprise has a present obligation as a result of past event(s} and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s}, in respect of which a reliable estimate can be made for the amount of obligation.


Mar 31, 2012

A Basis of Preparation of Financial Statements

The financial statements are prepared on historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) and applicable accounting standards issued by the Institute of Chartered Accountants of India and relevant provisions of Companies Act, 1956 and on the basis of going concern .

B Fixed Assets

I) Fixed assets other than plant and machinery and building(which are held for disposal) are stated at cost of acquisition including taxes, duties and other direct and indirect expenses incidental to acquisition and installation / construction.The plant and machinery and building are held for disposable and are stated at realizable value.

II) The carrying amount of assets is reviewed at each balance sheet date to determine if there is any indications of impairment thereof, based on external /internal factors. Impairment loss has been recognized and charged to Statement of profit & loss .

III) Depreciation on fixed assets other than Plant & Machinery and Building held for disposal is provided on straight line method in the manner and at the rates specified in schedule XIV/No.GSR/756(E) Dated 16 Dec. 1992. In respect of plant and machinery & building held for disposal no depreciation is provided and only the impairment loss is provided.

C Depreciation and Amortisation

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

D Impairment of Assets ''

The company is making an assessment whether any indication exists that an asset has been impaired at the end of the year. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

E Investments

Long term investments are valued at cost unless there is a decline in value other than temporary. Current investments are stated at lower of Cost or Fair Value.

F Inventories

Inventories are valued at the lower of cost and the net realisable value.

G Revenue Recognition

The company follows the mercantile system of accounting and recognizes profit or loss on that basis.

H Employee Benefits

The Company has provided the provision for the gratuity and charged to revenue. Provident /Pension Fund are not applicable.

I Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

J Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

K Provisions and contingencies

Contingent liabilities, if material, are disclosed by way of notes, contingent assets are not recognized or disclosed in the financial statements, A provision is recognized when an enterprise has a present obligation as a result of past event(s} and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation.

 
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