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Accounting Policies of Ratan Glitter Industries Ltd. Company

Mar 31, 2013

A. Presentation and disclosure of financial statements:

During the year ended 31st March 2013, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of 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.

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 a material adjustment to the carrying amounts of assets or liabilities in future periods.

Sales:

Sales are exclusive sales tax.

I. Tangible fixed assets:

Fixed assets, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future enefits from the existing asset beyond its previouly assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is

Depreciation on tangible fixed assets:

Depreciation on fixed assets is provided on written down value method at the rates and in Schedule XIV to the Companies Act, 1956.

f. Impairment of tangible assets:

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the company, estimates the asset''s recoverable amount, An asset''s recoverable amount is the higher of an asset''s net selling price and its value in use. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate I valuation model is used.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses, may no longer exist or may have decreased. If such indication exists, the company estimates the asset''s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss.

g. Investments:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term Investments.

On initial recognition,-all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and far value determined on an individual investment basis Long-term investments are carried at cost However, provision for diminution in value is made to recognizes a decline other than temporary in the value of the investments.

On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

Inventories:

Raw materials and packing materials are valued at cost on FIFO basis after providing for cost of obsolescence or depletion in value wherever applicable. Work in progress is valued at raw material cost plus pja^ojtjflA^f overhead. Finished goods are valued at lower of cost and net realizable value. Cost for this purpose i^a^^*lfel«fA@faase and > other costs incurred for bringing the inventories to their present location and condition
i. Income taxes:

Tax expense comprises current tax & deferred tax. Deferred tax resulting from timing difference between book and tax profits is accounted for using the tax rates and laws that have been enacted as on the Balance Sheet date. Deferred tax assets arising on the temporary timing differences are recognised only if there is reasonable certainty of realisation.

j. Earning per share:

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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 effect of all dilutive potential equity shares.

k. Revenue Recongnition

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

Sale of goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. The company collects sales taxes and value added taxes (VAT) on behalf of the pnvprnmpnl- anrl thprpfnrp thpsp arp nnt prnnnmir hpnpfitt; flnwina tn thp mmnanv

Income from services

Revenue from maintenance contracts are recognized pro-rata over the period of the contract or as and when services are rendered. The company collects service tax on behalf of the government and, therefore, it is not an economic

R. benefit flowing to the company. Hence, it is excluded from revenue.

Interest income

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

I. Transactions in Foreign Currencies:

Transactions are recorded at the exchange rates prevailing on the date of transaction. Monetary assets and liablities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end rates.The differances in translation of of monetary assets and liablities and relised gains and losses on foreign exchange transactions are recognised in the profit & loss account.

m. Retirement Benefits:

Contributions to the recognised Provident Fund are made at the statutory rates and charged to the profit and loss account during the year. Since none of the employees have completed five years of continous service, no provision for gratuity has been made during the year under referance in view of significant uncertainty of liablity towards gratuity payment.

n. Borrowing Cost:

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other, borrowing costs are charged to the Profit and Loss account.


Mar 31, 2012

1) BASIS OF ACCOUNTING

The accompanying financial statements have been prepared in accordance with the historical cost convention and on accrual basis. These have been prepared in accordance with the applicable accounting standards issued by the institute of Chartered Account

2) REVENUE RECOGNITION

Sales are recognized on despatch of goods to customers and are recorded net of trade discounts, rebates, etc. Revenue from service rendered is recognized as the service is performed

3) FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. The company capitalises all direct cost relating to the acquisition and installation of fixed assets.

Interest on borrowed funds ,if any , used to finance the acquisition of fixed assets, is capitalised upto the date the assets are ready for comercial use.

4) DEPRECIATION

Depreciation on Fixed Assets has been provided by written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation on fixed assets added/ disposed off during the year ,is provided on prorata basis for the period these have been put to use.

5) INVENTORIES

Stock of goods for trading, Raw Materials and Packing Materials are Valued at Cost determined on FIFO basis.

6) BORROWING COST

Borrowing Cost, which are directly attributable to the acquisition / construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the cost of the assets. Other borrowing costs are recognised as an expense in the year in which these are incurred.

7) INVESTMENTS

Long Term Investments are stated at Cost. Earning from Investments is accounted for on receipt basis

8) FOREIGN CURRENCY TRANSACTIONS

Foreign currency transaction are being accounted for at the rates of exchange prevailing at the date of transaction and subsequent gains or losses are being accounted for in the Profit & Loss Account at the year end except in cases where they relate to the acquisition of fixed assets acquired from outside India, in which case they are adjusted in the cost of the corresponding assets.

9) PROVISION FOR CURRENT & DEFERRED TAX

Provision for current Income Tax is made on taxable income under Income Tax Act, 1961. Deferred Tax arising on account of "timing difference" and which are capable of reversal in one or more subsequent period is recognized using the tax rates and tax laws that are enacted or substantially enacted. Deferred Tax asset is recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as a matter of prudence


Mar 31, 2010

1) BASIS OF ACCOUNTING

The accompanying financial statements have been prepared in accordance with the historical cost convention and on accrual basis. These have been prepared in accordance with the applicable accounting standards issued by the institute of Chartered Account

2) REVENUE RECOGNITION

Sales are recognized on despatch of goods to customers and are recorded net of trade discounts, rebates, etc. Revenue from service rendered is recognized as the service is performed

3) FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. The company capitalises all direct cost relating to the acquisition and installation of fixed assets.

Interest on borrowed funds ,if any , used to finance the acquisition of fixed assets, is capitalised upto the date the assets are ready for comercial use.

4) DEPRECIATION

Depreciation on Fixed Assets has been provided by written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation on fixed assets added/ disposed off during the year ,is provided on prorata basis for the period these have been put to use.

51 INVENTORIES

Stock of goods for trading, Raw Materials and Packing Materials are Valued at Cost determined on FIFO basis.

6) BORROWING COST

Borrowing Cost, which are directly attributable to the acquisition / construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the cost of the assets. Other borrowing costs are recognised as an expense in the year in which these are incurred.

7) INVESTMENTS

Long Term Investments are stated at Cost. Earning from Investments is accounted for on receipt basis

8)FOREIGN CURRENCY TRANSACTIONS

Foreign currency transaction are being accounted for at the rates of exchange prevailing at the date of transaction and subsequent gains or losses are being accounted for in the Profit & Loss Account at the year end except in cases where they relate to the acquisition of fixed assets acquired from outside India, in which case they are adjusted in the cost of the corresponding assets.

9) PROVISION FOR CURRENT & DEFERRED TAX

Provision for current Income Tax is made on taxable income under Income Tax Act, 1961. Deferred Tax arising on account of "timing difference" and which are capable of reversal in one or more subsequent period is recognized using the tax rates and tax laws that are enacted or substantially enacted. Deferred Tax asset is recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as a matter of prudence

 
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