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Accounting Policies of Prism Medico and Pharmacy Ltd. Company

Mar 31, 2014

A) System of Accounting:

i) The books of accounts are maintained on mercantile basis except where otherwise stated.

ii) The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standards issued by The Institute of Chartered Accountants of India and as per the relevant representational requirements of the Companies Act, 1956.

iii) Accounting policies not specifically referred to are consistent with generally accepted accounting practices, except where otherwise stated.

b) Revenue Recognition:

i) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can reliably measured.

ii) Interest income is recognized on time proportion basis.

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

iv) Profit / Loss on sale of investments is accounted on the trade dates

c) Valuation of Investment:

Investments are classified into non current and current investments. Non Current investments are stated at cost and provision wherever required, made to recognize any decline, other than temporary, in the value of such investments. Current investments are carried at lower of cost and fair value and provision wherever required, made to recognize any decline in carrying value.

d) Valuation of Fixed Assets:

Fixed Assets are stated in books at historical cost inclusive of all incidental expenses.

Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use.

e) Depreciation:

Depreciation on assets has been charged on written down value method at the rates specified in schedule XIV of the Companies Act, 1956.

f) Retirement Benefits:

i) Leave encashment benefits are charged to Profit & Loss Account in each year on the basis of actual payment made to employee. There are no rules for carried forward leave.

ii) No provision has been made for the retirement benefits payable to the employees since no employee has yet put in the qualifying period of service & the liability for the same will be provided when it becomes due.

g) Inventories:

Inventories are valued at cost (using FIFO method ) or net releasable value, whichever is lower.

h) Impairment of Assets:

The carrying amounts of assets are reviewed at the Balance Sheet date to determine whether there are any indications of impairment. If the carrying amount of the Fixed Assets exceeds the recoverable amount at the reporting, the carrying amount is reduced to the recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use, the value in use determined by the present value estimated future cash flows. Here carrying amounts of Fixed Assets are equal to recoverable amounts.

I) Earning Per Share:

a) Earning Per Share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the period.

b) For the purpose of calculating diluted Earning Per Share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all diluted potential equity shares.

j) Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognised when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for:

i) Possible obligations which will be confirmed by future events not wholly within the control of the company, or

ii) Present obligation arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

k) Accounting for Taxes on Income:

i) Current Tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred Tax is recognized subject to the consideration of prudence on timing difference, 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 and measured using relevant enacted tax rates.


Mar 31, 2012

A) System of Accounting :

i) The books of accounts are maintained on mercantile basis except where otherwise stated.

ii) The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standards issued by The Institute of Chartered Accountants of India and as per the relevant representational requirements of the Companies Act, 1956.

iii) Accounting policies not specifically referred to are consistent with generally accepted accounting practices, except where otherwise stated.

b) Revenue Recognition:

i) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can reliably measured.

ii) Interest income is recognized on time proportion basis.

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

iv) Profit/Loss on sale of investments is accounted on the trade dates.

c) Valuation of Investment:

Investments are classified into non-current and current investments. Non-Current investments are stated at cost and provision wherever required, made to recognize any decline, other than temporary, in the value of such investments. Current investments are carried at lower of cost and fair value and provision wherever required, made to recognize any decline in carrying value.

d) Valuation of Fixed Assets:

Fixed Assets are stated in books at historical cost inclusive of all incidental expenses. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use.

e) Depreciation:

Depreciation on assets has been charged on written down value method at the rates specified in schedule XIV of the companies act, 1956.

f) Retirement Benefits:

i) Leave encashment benefits are charged to Profit & Loss Account in each year on the basis of actual payment made to employee. There are no rules for carried forward leave.

ii) No provision has been made for the retirement benefits payable to the employees since no employee has yet put in the qualifying period of service & the liability for the same will be provided when it becomes due.

g) Inventories:

Inventories are valued at cost (using FIFO method) or net releasable value, whichever is lower.

h) Impairment of Assets:

The carrying amounts of assets are reviewed at the balance sheet date to determine whether there are any indications of impairment. If the carrying amount of the fixed assets exceeds the recoverable amount at the reporting, the carrying amount is reduced to the recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use, the value in use determined by the present value estimated future cash flows. Here carrying amounts of fixed assets are equal to recoverable amounts.

i) Earnings Per Share:

i) Earnings per share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the period.

ii) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all diluted potential equity shares.

j) Provisions, Contingent Liabilities And Contingent Assets:

Provisions are recognised when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for:

i) Possible obligations which will be confirmed by future events not wholly within the control of the company, or

ii) Present obligation arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

k) Accounting for Taxes on Income:

i) Current tax is determined as the amount of tax payable in respect of taxable income for the year.

ii) Deferred Tax is recognized subject to the consideration of prudence on timing difference, 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 and measured using relevant enacted tax rates.


Mar 31, 2010

1. ACCOUNTING CONVENTION

The company follows the accrual basis of accounting in the preparation of accounts and recognized income and expenses on accrual basis. The accounts are prepared on the historical cost basis as a going concern basis and are consistent with generally accepted accounting principles, and comply in all material respects with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) and relevant provision of the CompaniesAct,1956.

2. REVENUE RECOGNITION:

Items of income & expenditure are recognized on accrual basis except where the receipt of the income is uncertain . Profit and loss on the transactions in futures and options are accounted for on transactions date unrealized gains on future contracts at year end are reversed in the profit and loss account and credited to mark to market equity future.

3. ACCOUNTING FOR TAXES ON INCOME

i) Current tax is determined as the amount of tax payable inrespect of taxable income for the year.

ii) Deferred tax is recognized on timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversing in one or more subsequent periods. Deferred tax assets are recognized only to the extent there is a reasonable certainty of its realization.

 
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