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Accounting Policies of Rajoo Engineers Ltd. Company

Mar 31, 2015

(i) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring adjustment to carrying amounts of assets or liabilities in future periods. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

3.02 Inventories:

Items of inventories are measured at lower of cost or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to their respective present condition and location. Cost of Raw Material including components, Testing Materials, Scrap and consumable stores are determined on FIFO basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

3.03 Depreciation:

Depreciation on tangible assets and intangible assets is provided on the straight line method over the useful lives of assets prescribed under Part C of Schedule II of the Companies Act, 2013.

3.04 Revenue Recognition:

In appropriate circumstances, Revenue income is recognized when no significant uncertainty as to determination or realization exists. Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

3.05 Fixed Assets:

Tangible fixed assets are stated at cost net of recoverable taxes less accumulated depreciation.

Intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated depreciation.

3.06 Foreign Currency Transactions:

(i) Transactions dominated 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 transaction.

(ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contracts.

(iii) In respect of branches, which are integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transactions. Branch monetary assets and liabilities are restated at the year end rates.

(iv) Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the profit or loss account.

3.07 Retirement Benefit:

i) Provident fund:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The company has no obligation, other than the contribution payable to the provident fund.

ii) Gratuity:

The company has established the employees Group Gratuity-Cum-Life Assurance Scheme with Life Insurance Corporation of India through employees trust. The cost of providing benefit under the scheme are determined on the basis of actuarial valuation at each year end and contribution for the year is charged to the statement of profit and loss for the year.

iii) Leave Encashment:

The company measures the expected cost that it expects to pay as a result of unused entitlement that has accumulated at the reporting date and the earned leave amount for the current reporting period is charged to the statement of profit and loss for the year. The company presents the entire leave as current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

3.08 Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

3.09 Related Parties Disclosures:

As required by Accounting Standard (AS) - 18 "Related Party Disclosures" is made as under:

(i) List of related parties where control exits and related parties with whom transactions have taken place and relationship. Names of the related party and description of relationship with whom there were transactions during the year.

3.10 Lease:

In earlier year, the Crome Plating Division of the factory at Veraval (Shapar), Rajkot was given on lease to M/s. Shail Engineers for a monthly rent of Rs.50,000/-. The lease rental agreement has not been renewed during the year.

3.11 Provision for Current and Deferred Tax:

Provision for Current tax is based on the assessable income under the provisions of the Income-tax Act, 1961.

Deferred tax is recognized on timing difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods. Deferred tax resulting from "timing differences" is accounted for using tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realized in future.

3.12 Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to statement of profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

3.13 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the Financial Statements.

3.14 Segment Reporting:

As the company''s business activity falls within a single business segment viz. Plastic Processing Machineries and post extrusion equipments, the disclosure requirements of Accounting standard (AS) 17 "Segment reporting" issued by the Institute of Chartered Accountants of India is not applicable.


Mar 31, 2012

1.01 Disclosure of Accounting Policies:

(i) Presentation and disclosure of financial statements

The revised schedule VI notified under the companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements for the current year. The adoption of revised schedule VI does not impact recognition and measurement principal followed for preparation and presentation of its financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(ii) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring adjustment to carrying amounts of assets or liabilities in future periods. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

1.02 Inventories:

Items of inventories are measured at lower of cost or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other cost including manufacturing overheads incurred in bringing them to their respective present condition and location. Cost of Raw Material including components, Testing Materials, Scrap and consumable stores are determined on FIFO basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale,

1.03 Depreciation:

Depreciation on tangible fixed assets is provided on straight line method (SLM) at the rate specified in schedule XIV of the Companies Act, 1956.

Depreciation on intangible fixed assets is provided on straight line method (SLM) at the rate determined considering the estimated useful life of the assets.

1.04 Revenue Recognition:

In appropriate circumstances, Revenue income is recognized when no significant uncertainty as to determination or realization exists. Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

1.05 Fixed Assets:

Tangible fixed assets are stated at cost net of recoverable taxes less accumulated depreciation.

Intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated depreciation,

1.06 Foreign Currency Transactions:

(i) Transactions dominated 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 transaction.

(ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contracts.

(iii) In respect of branches, which are integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transactions. Branch monetary assets and liabilities are restated at the year end rates,

(iv) Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the profit or loss account.

1.07 Retirement Benefit:

i) Provident fund:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The company has no obligation, other than the contribution payable to the provident fund.

ii) Gratuity:

The company has established the employees Group Gratuity-Cum-Life Assurance Scheme with Life Insurance Corporation of India through employees trust. The cost of providing benefit under the scheme are determined on the basis of actuarial valuation at each year end and contribution for the year is charged to the statement of profit and loss for the year.

iii) Leave Encashment:

The company measures the expected cost that it expects to pay as a result of unused entitlement that has accumulated at the reporting date and the earned leave amount for the current reporting period is charged to the statement of profit and loss for the year. The company presents the entire leave as current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

1.08 Borrowing Cost:

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

1.09 Related Parties Disclosures:

As required by Accounting Standard (AS) - 18 "Related Party Disclosures" is made as under:

(I) List of related parties where control exits and related parties with whom transactions have taken place and relationship. Names of the related party and description of relationship with whom there were transactions during the year.

1.10 Lease:

The lease arrangement with Veeram Pack Pvt. Ltd. (formerly known as Wonderpack Industries Pvt. Ltd.) for their factory at Nashik is terminated with effect from 30.09.2011 and Lease rent paid is charged to statement of Profit and Loss account of Wonderpack Division as prepared under Note No. 29 forming an integral part of financial statements.

For the Crome Plating Division of the factory at Veraval (Shapar), Rajkot, the company has entered into Rent Agreement with M/s. Shail Engineers from 01.04.2011 at monthly rent of Rs.50,000/- which is renewable every year.

1.11 Provision for Current and Deferred Tax:

Provision for Current tax is based on the assessable income under the provisions of the Income-tax Act, 1961.

Deferred tax is recognized on timing difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods. Deferred tax resulting from "timing differences" is accounted for using tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realized in future.

1.12 Discontinuing Operations of Wonderpack Division, Nashik :

The company has discontinued manufacturing operations of Wonderpack Division at Nashik, (Maharashtra) from 30.09.2011 which was under lease arrangement and there are no plans for revival of manufacturing activities in near future.

Loss from Wonderpack Division, Nashik is separately disclosed as per Note No. 29,

The computers System remained after closure of the division are transferred to Veraval(Shapar), Rajkot Unit,

1.13 Impairment of Assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to statement of profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.14 Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the Financial Statements.

Contingent Liability Rs. In Lacs

Bank Guarantee for Performance 19.42

1.15 Segment Reporting:

As the company's business activity falls within a single business segment viz. Plastic Processing Machineries and post extrusion equipments and as Nashik Unit do not affect predominantly risk and return of the enterprise on account of negligible turnover in relation to total turnover of the enterprise, the disclosure requirements of Accounting standard (AS) 17 "Segment reporting" issued by the Institute of Chartered Accountants of India is not applicable.


Mar 31, 2010

1. Basis of Preparations of financial statement:

The Financial statements are prepared in accordance with generally accepted accounting principles under historical cost convention on the accrual basis,

2. Use of Estimates

The presentation ot financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and the estimates are recognized in the period in which the results are known /materialized.

3. Revenue Recognition

in appropriate circumstances, revenue income is recognized when no significant uncertainty as to determination or realization exists.

4. Fixed Assets

Fixed assets are stated at cost net of CENVAT, less accumulated depreciation. Direct costs are capitalized until fixed assets are ready for use, Capital work in progress comprised outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use before the balance sheet date are recorded ai the consideration paid for acquisition.

5. Depreciation

Depreciation on fixed assets is provided on straight line method (SIM) at the rate specified in schedule XIV of the Companies Act, 1956.

6. Foreign Currency transactions

Foreign currency transaction forward contracts are stated at the forward contract rates while those not covered by forward contracts are restated at the rates ruling at the end of the year, Exchange differences relating to fixed assets are adjusted in the cost of the assets. Any other exchange differences are dealt with in the Profit & Loss A/a

7. Investments

Long term investments are stated at cost and provisions for diminution in the value of long term investments are made only if such a decline is other than temporary in the opinion of the management.

8. Retirement Benefits to Employees

i) Provident fund

The Companys contribution to provident fund and family pension fund is charged to profit & loss account. The company has no further obligation under Employees Provident fund Act,

ii) Gratuity

The company has taken a group policy for gratuity with Life Insurance Corporation of India, The contribution on the basis of actuarial valuation is charged to profit and loss account, The company has no further obligation under Gratuity Act,

iii) Leave Encashment

The liability for leave encashment payable to employees is debited to profit and loss account as calculated by the management,

9. Sales

Sales are accounted excluding excise duty, service tax and Central sales fax (CST). Value Added Tax (VAT) collected on sales is accounted separately in the VAT - input Credit Account,

10. Purchase

Purchase of raw material and components, testing material, consumable stores are accounted excluding excise duty and Centra! Sales tax, Value Added tax (VAT) paid on purchase is accounted separately in VAT - input Credit Account,

11. Excise duty (Including Education Cess & Secondary & Higher Secondary Education Cess)

The Excise duty is applicable to Raw Material and finished goods of the company. The company is eligible for CENVAT credit for excise duty paid on purchase of Raw material Components and Stores. The Balance of CENVAT credit remained unavailed at the end of the year is eligible for carry forward for the purpose of set-off against excise duty payable on sales in subsequent year. The balance of CENVAT credit unavailed at the end of the year is shown under "Excise Duty Receivable" under "Loans and Advances" In the schedule of "Current Assets, Loans and Advances" forming part of Balance Sheet.

12. Sales tax

a) The company Is eligible for Set off of Value Added tax paid on purchases made from parties situated in the state of Gujarat as per the Provision of Gujarat Value Added Tax Act, 2003. The amount eligible for sales-tax set-off is accounted separately in VAT-lnput Credit Account and not included In the purchases of the company.

b) Value Added Tax collected on sales and eligible for VAT set-off as per the provision of Gujarat Value Added Tax Act 2003 and is accounted separately in VAT- Input Credit Account and not included in the sales of the company The Debit balance of VAT-lnput Credit Account represents the excess of VAT paid on purchase over the VAT collected on sales and is shown under "VAT Receivable" under "Loans and Advances" in the schedule of "Current Assets, Loans and Advances" forming part of Balance Sheet,

c) In respect of the factory of the company situated at Village: Veraval (Shapar), Taluka; Kotda Sangani, District: Rajkot, Sales tax collected under deferred payment scheme 1990-95 of State Government Rs, 209.04 lacs is required to be repaid in six equal installment commencing from May-2004. The company has already paid Rs.209.04 lacs and there is no balance Amount unpaid at the end of the year,

13. Service Tax

Service Tax on services availed and services provided are accounted separately in Service Tax Account and set-off is claimed against Excise Duty payable on Sales.

14. Inventories

i) Raw Material & Components

It is valued at Purchase cost excluding Central Excise Duty but including Central Sales Tax other cost incurred to bring the inventory to present condition and location. The Central Excise duty and Gujarat Value Added Tax paid on purchase are not considered in the valuation of inventories for the following reasons,

1) Purchases are accounted excluding Central Excise Duty and therefore, if is not considered for valuation of Inventories.

2) As explained in para no, 12(a), the Value Added Tax paid on purchases eligible for VAT set-off is accounted separately under VAT - Input Credit Account, If is not included in purchases and therefore, it is not considered for valuation of inventories.

II) Testing Material

It is valued at Purchase cost including Central Sales Tax and other cost incurred to bring the inventory to present condition and location,

III) Consumable stores

At cost or net realizable value whichever is lower.

iv) Scrap / Plastic Packing Material for Captive Consumption At cost or net realizable value whichever is lower,

v) Stock in Process

It is valued at Raw Material cost plus production cost incurred to bring the inventory to present condition and location,

vi) Finished Goods

St is valued at selling rate,

The Finished Goods have been valued at selling price as the company manufactures goods on customers order specification and thus the finished goods at selling price reflects the realizable value, The finished goods have to be valued c0 lower of cost or net realizable value as per Accounting Standard (AS) - 2, Further, the quantum effect of deviation on the net profit Is as under;

15. Research and Development

Expenditure relating to capital items is debited to fixed assets and depreciated at applicable rates, Revenue expenditure is charged to profit and loss account of the year,

16. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of assets are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

17. Income Tax

Provision for current tax is made on the basis of taxable income computed in accordance with the Income Tax Act, 1961.

18. Deferred tax

Deferred tax is recognized on timing difference between taxable income and accounting income that originate in one period and capable of reversal in one or more subsequent periods, Deferred tax resulting from "timing differences" is accounted for using tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable / virtual certainty that the asset will be realized in future.

19. Contingent Liabilities

All liabilities have been provided for in the accounts except liabilities of a contingent nature, which have been disclosed at their estimated value in the Notes on Accounts.

20. Earning per share

The company reports basic and diluted Earning per share (EPS) in accordance with Accounting standard (AS) - 20, Basic earning per share is computed by dividing net profit for the year by the weighted average number of shares outstanding during the period, Diluted earning per share is computed by dividing net profit by the weighted shares considered for deriving basic earning per share and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares,

 
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