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Accounting Policies of Rasi Electrodes Ltd. Company

Mar 31, 2014

1.03 The Company has only one class of shares namely equity shares comprising of nominal value of Rs 10 per equity shares. Each holder of equity shares is entitled to one vote per share. The shareholders have the right to receive interim dividends, if any, declared by the Board of Directors and final dividends proposed by the Board of Directors and approved by the shareholders. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The equity shareholders have all other rights as available to the equity shareholders as per the provisions of the Companies Act, 1956, read together with the Memorandum of Association and Articles of Association of the Company as applicable.

1.04 Out of 49,70,000 Equity shares issued subscribed and paid up, 13,60,000 Equity shares of Rs 10/- each have been issued and allotted as fully paid bonus shares on 29th December 2007 by capitalisation of General Reserves.

4.01 Short term borrowings from Banks represents working capital borrowings by way of cash credit repayable on demand. They are secured by hypothecation of raw-materials, work in progress, finished goods, book debts and a part of plant and machineries, and additionally secured by equitable mortgage by deposit of title deeds of land and personal guarantees of promoter directors.

4.02 The Company has not accepted any deposits from public. The deposits represents unsecured security deposits from dealers which will be retained with the Company till such time the dealership arrangement continues.

4.03 The Company has not borrowed any funds from related parties.

5.01 Out of the total amount shown under sundry creditors, an amount of Rs 725482 is due to two small scale industrial unit which exceeds Rs 100,000 and which are due for more than 30 days. Names of the small scale industrial undertakings (as compiled by the Company based on the information available and relied upon by the Auditors) to whom the Company owe a sum which is outstanding for more than 30 days are as follows:

21.1. BASIS OF PREPARATION

These 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.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

21.2. SYSTEM OF ACCOUNTING :

i) The Company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

ii) Financial statements are based on historical cost. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

iii) The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any variation to accounting estimates are recognised prospectively in current and future periods.

21.3. FIXED ASSETS AND DEPRECIATION:

a. FixedAssets are stated at cost less depreciation, Costs comprise of cost of acquisition, borrowing cost, cost of improvement and any attributable cost of bringing the asset to condition for its intended use.

b. Depreciation on tangible assets is provided in accordance with the provisions of Schedule XIV to the Companies Act, 1956, on "Written Down Value" method.

c. Intangible Assets are amortized over their useful life not exceeding ten years.

21.4. FOREIGN CURRENCY TRANSACTIONS :

Foreign Currency transactions are initially recorded at exchange rates prevailing on transaction dates. All foreign currency loans, current assets and current liabilities outstanding on the date of Balance Sheet are converted at the appropriate rates of exchange prevailing on the date of the Balance Sheet except those covered by forward contracts if any, which are accounted for at the contracted rate representing the amount required to meet the liability. Exchange difference arising from foreign currency fluctuations are dealt with in the Statement of Profit and Loss.

Derivative instrument to hedge foreign exchange exposures are simulated for maturity / closure at the close of the year. Losses arising on such simulation on account of fluctuations in exchange rates during the reporting period are recognised in the Statement of Profit and Loss. Gains, if any, are postponed for a recognition on final determination.

21.5. INVESTMENTS :

Long term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of Long Term Investments. Short term investment are stated at lower of cost or fair value.

21.6. INVENTORY VALUATION :

Inventories are val ued as under:

Raw Materials, packing materials and stores and spares at cost.

Finished Products at lower of cost or net realizable value.

21.7. SALES :

i) Domestic sales are accounted for when dispatched from the point of sale, consequent to property in goods being transferred.

ii) Export sales for exports are accounted on the basis of date of Bill of Lading.

21.8. EXPORT INCENTIVES :

Export incentives are accounted for on export of goods if the entitlements can be estimated with reasonable accuracy and conditions precedent to claim are fulfilled.

21.9. OTHER INCOME:

i) Other operating revenues are accounted on accrual basis.

ii) Interest income is accounted on accrual basis.

iii) Dividend income is accounted when right to receive payment is established.

21.10 RETIREMENT BENEFITS :

a. Provident Fund:

Company''s contributions during the year towards Government administered Provident Fund, Family Pension Fund and Labour Welfare Fund are charged to the Profit & Loss Account as incurred.

b. Gratuity :

The Gratuity is evaluated as on the date of Balance Sheet as provided under the Payment of Gratuity Act and the amount is shown as liability payable.

c. Others: Any other employee benefit payments are accounted for on cash or accrual basis in the year of occurrence of the event giving rise to such liability.

21.11. LEASES:

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rents under operating leases are recognized in the Profit & Loss Account on accrual basis.

21.12. BORROWING COST :

Borrowing cost include interest, fees and other charges incurred in connection with the borrowing of funds and is considered as revenue expenditure for the year in which it is incurred. Borrowing cost attributed to the acquisition/improvement of qualifying capital assets and incurred till the commencement of commercial use of the assets is capitalized as cost of the assets.

21.13. TAXATION :

Provision for Taxation is made on the basis of the taxable profits computed for the current accounting period in accordance with the Income TaxAct, 1961. Deferred tax resulting from timing difference between book profits and tax profits is accounted for at the applicable rate of tax to the extent the timing differences are expected to crystallise, in case of deferred tax liabilities with reasonable certainty and in case of deferred tax assets with virtual certainty that there would be adequate future taxable income against which deferred tax assets can be realised.

21.14. IMPAIRMENT OF ASSETS :

The Company tests for impairments at the close of the accounting period if and only if there are indicators that suggest a possible reduction in the recoverable value of an asset. If the recoverable value of asset, i.e. the net realizable value or the economic value in use of a cash generating unit is lower than the carrying amount of the asset, the difference is provided for as impairment. However, if subsequently the position reverses and the recoverable amount becomes higher than the then carrying value, the provision to the extent of the then difference is reversed, but not higher than the amount provided for.

21.15. PROVISIONS :

Necessary provisions are made for present obligations that arise out of past events prior to the Balance Sheet date entailing future outflow of economic resources. Such provisions reflect best estimates based on available information.


Mar 31, 2012

1.1.BASIS OF PREPARATION

These 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.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - noncurrent classification of assets and liabilities.

1.2.SYSTEM OF ACCOUNTING :

i) The Company generally follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

ii) Financial statements are based on historical cost. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

iii) The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities.

The estimates and assumptions used in the accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any variation to accounting estimates are recognized prospectively in current and future periods.

1.3. FIXED ASSETS AND DEPRECIATION :

a. Fixed Assets are stated at cost less depreciation, Costs comprise of cost of acquisition, borrowing cost, cost of improvement and any attributable cost of bringing the asset to condition for its intended use.

b. Depreciation on tangible assets is provided in accordance with the provisions of Schedule XIV to the Companies Act, 1956, on "Written Down Value" method.

c. Intangible Assets are amortized over their useful life not exceeding ten years.

1.4.FOREIGN CURRENCY TRANSACTIONS :

Foreign Currency transactions are initially recorded at exchange rates prevailing on transaction dates. All foreign currency loans, current assets and current liabilities outstanding on the date of Balance Sheet are converted at the appropriate rates of exchange prevailing on the date of the Balance Sheet except those covered by forward contracts if any, which are accounted for at the contracted rate representing the amount required to meet the liability. Exchange difference arising from foreign currency fluctuations are dealt with in the Statement of Profit and Loss.

Derivative instrument to hedge foreign exchange exposures are simulated for maturity / closure at the close of the year. Losses arising on such simulation on account of fluctuations in exchange rates during the reporting period are recognized in the Statement of Profit and Loss. Gains, if any, are postponed for a recognition on final determination.

1.5. INVESTMENTS :

Long term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of Long Term Investments. Short term investment are stated at lower of cost or fair value.

1.6.INVENTORY VALUATION :

Inventories are valued as under:

Raw Materials, packing materials and stores and spares at cost.

Finished Products at lower of cost or net realizable value.

1.7. SALES :

i) Domestic sales are accounted for when dispatched from the point of sale, consequent to property in goods being transferred.

ii) Export sales for exports are accounted on the basis of date of Bill of Lading.

1.8. EXPORT INCENTIVES :

Export incentives are accounted for on export of goods if the entitlements can be estimated with reasonable accuracy and conditions precedent to claim are fulfilled.

1.9.OTHER INCOME:

I Other operating revenues are accounted on accrual basis.

Ii Interest income is accounted on accrual basis.

Iii Dividend income is accounted when right to receive payment is established.

1.10 RETIREMENT BENEFITS :

a. Provident Fund:

Company's contributions during the year towards Government administered Provident Fund, Family Pension Fund and Lab our Welfare Fund are charged to the Profit & Loss Account as incurred.

b. Gratuity :

The Gratuity is evaluated as on the date of Balance Sheet as provided under the Payment of Gratuity Act and the amount is shown as liability payable.

c. Others:

Any other employee benefit payments are accounted for on cash or accrual basis in the year of occurrence of the event giving rise to such liability.

1.11.LEASES:

Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the less or are recognized as operating leases. Lease rents under operating leases are recognized in the Profit & Loss Account on accrual basis.

1.12. BORROWING COST :

Borrowing cost include interest, fees and other charges incurred in connection with the borrowing of funds and is considered as revenue expenditure for the year in which it is incurred. Borrowing cost attributed to the acquisition/ improvement of qualifying capital assets and incurred till the commencement of commercial use of the assets is capitalized as cost of the assets.

1.13.TAXATION :

Provision for Taxation is made on the basis of the taxable profits computed for the current accounting period in accordance with the Income Tax Act, 1961. Deferred tax resulting from timing difference between book profits and tax profits is accounted for at the applicable rate of tax to the extent the timing differences are expected to crystallize, in case of deferred tax liabilities with reasonable certainty and in case of deferred tax assets with virtual certainty that there would be adequate future taxable income against which deferred tax assets can be realized.

1.14. IMPAIRMENT OF ASSETS :

The Company tests for impairments at the close of the accounting period if and only if there are indicators that suggest a possible reduction in the recoverable value of an asset. If the recoverable value of asset, i.e. the net realizable value or the economic value in use of a cash generating unit is lower than the carrying amount of the asset, the difference is provided for as impairment. However, if subsequently the position reverses and the recoverable amount becomes higher than the then carrying value, the provision to the extent of the then difference is reversed, but not higher than the amount provided for.

1.15. PROVISIONS :

Necessary provisions are made for present obligations that arise out of past events prior to the Balance Sheet date entailing future outflow of economic resources. Such provisions reflect best estimates based on available information.

1.16.CONTINGENT LIABILITIES

A disclosure for contingent liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.


Mar 31, 2010

1. We have audited the attached Balance Sheet of Rasi Electrodes Limited as at 31st March 2010, the annexed Profit and Loss Account for the year ended on 1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Company prepares its financial statements under the historical cost convention in accordance with generally accepted accounting principles (GAAP) and provisions of the Companies Act, 1956 as adopted consistently by the Company.

1.2 INCOME & EXPENDITURE

All Income and Expenditure having a material bearing on the Financial Statement are accounted for on accrual basis.

1.3 SALES

Sales comprises of Sale of Goods net of sales tax.

1.4 RETIREMENT BENEFITS

Contribution to Provident fund is made monthly, at a predetermined rate, to the provident fund organisation and accounted on an accrual basis. The gratuity is evaluated at the year end as provided under the payment of the Gratuity Act.

1.5 FIXED ASSETS & DEPRECIATION

Fixed Assets are stated at cost of acquisition minus the accumulated depreciation. Direct costs are capitalised till the assets are ready to be put to use. These costs include financing costs relating to specific borrowing attributable to fixed assets and Depreciation has been provided as per rates specified in the Companies Act on written down value.

1.6 INVESTMENT

Investments being long term investments are valued at cost.

1.7 CURRENT ASSETS

Inventories are certified by. a Director and are valued at Cost or Market price whichever is lower. All accounts receivable are unsecured and are considered good.

1.8 CONTINGENT LIABILITIES

Contingent Liabilities are generally not provided for in the accounts and shown separately in Notes on accounts.

1.9 DERIVATIVE INSTRUMENTS

Derivative transactions of commodities and foreign exchange contracts are accounted for on their settlement and accordingly the gains / losses arising there from are recognized in the Profit & Loss Account as and when the settlement takes place in accordance with the terms of the respective contracts. The open positions outstanding as on the end of the year is shown as contingent liability not provided for in the books of accounts.

 
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