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Accounting Policies of Samkrg Pistons & Rings Ltd. Company

Mar 31, 2015

(a) Basis of accounting and preparation of financial statements

The financial statements has been prepared under the historical cost convention on an accrual basis, to comply with the generally accepted accounting principles in India ('"Indian GAAP"), the Accounting Stand- ards prescribed in the Companies (Accounting Standards) Rules, 2006 (as amended), the relevant provisions of the Companies Act, 1956, the relevant provisions of the Companies Act, 2013 to the extent applicable and the guidelines issued by the Securities and Exchange Board of India ("SEBI"). The financial statements are presented in Indian rupees rounded off to the nearest thousand.

(b) Use of estimates

The preparation of the financial statements in conformity with the Indian GAAP requires the Management to make estimates and assumption that affect the reported accounts of assets and liabilities, disclosure of con- tingent liabilities as at the date of the financial statements and the reported period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made.

(c) Current and non-current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

i. It is expected to be realised in, or is intended for sale or consumption in, the company's normal operating cycle.

ii. It is held primarily for the purpose of being traded.

iii. It is expected to be realised within 12 months after the reporting date; or

iv. It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are classified as non- current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

i. It is expected to be settled in the company's normal operating cycle:

ii. It is held primarily for the purpose of being traded;

iii. It is due to be settled within 12 months after the reporting date; or

iv. The company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in it set- tlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The company's operating cycle is within a period of 12 months.

(d) Inventories

Traded goods are valued at lower of weighted average cost and net realisable value. Goods in transit as valued at cost or below.

(e) Cash flow Statement

Cash flows are reported using the indirect method, whereby net profit/loss before tax is adjusted for the effects of transactions of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the com- pany are segregated.

Cash and cash equivalents for the purpose of cash flow comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

(f) Revenue Recognition

Sales are recognised on dispatch of goods and upon transfer of property in the goods to customers. Sales are inclusive of excise duty, as applicable.

Income from shared services (services provided to Group companies) is recognised by the Company on ac- crual basis. Income in excess of billings is disclosed under Other current assets as unbilled revenues.

(g) Other income

Interest income is recognised using the time proportion method, based on the transactional interest rates. Dividend income is recognised when the Company's right to receive dividend is established.

(h) Fixed Assets, Depreciation, Impairment

Fixed Assets are stated at cost/professional valuation less accumulated depreciation. Cost includes freight, installation cost, duties and taxes, interest on specific borrowings utilised for financing the qualifying fixed assets and other incidental expenses.

Depreciation is provided on straight - line method at the rates specified in the Schedule XIV to the Compa- nies Act, 1956 or based on the estimated economic useful lives whichever is higher.

(i) Foreign Currency Transactions

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of the transac- tions. Monetary assets and liabilities denominated in foreign currency are restated at the prevailing year end rates. The resultant gain/loss on account of foreign currency transactions are accounted in the state- ment of profit and loss. In respect of items covered by forward exchange contracts, the premium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward contract is recognised in the statement of profit and loss.


Mar 31, 2014

1. Method of Accounting

The financial statements have been prepared on accrual basis and at historical cost in Accordance with generally accepted accounting principles in India and provisions of the Companies act 1956 read with the Companies (Accounting Standards) Rules 2006.

The accounts were regrouped according to the requirements of the Revised Schedule VI

2. Revenue Recognition

Sales comprises sale of goods and services net of trade discount and inclusive of Excise duty and sales Tax.


Mar 31, 2013

1. Method of Accounting

The financial statements have been prepared on accrual basis and at historical cost in Accordance with generally accepted accounting principles in India and provisions of the Companies act 1956 read with the Companies (Accounting Standards) Rules 2006.

The accounts were regrouped according to the requirements of the revised schedule VI

2. Revenue Recognition

Sales comprises sale of goods and services net of trade discount and inclusive of Excise duty and exclude sales Tax.


Mar 31, 2012

1. Method of Accounting

The financial statements have been prepared on accrual basis and at historical cost in accordance with generally accepted accounting principles in India and provisions of the Companies Act 1956 read with the Companies (Accounting Standards) Rules 2006.

The accounts were regrouped according to the requirements of the revised schedule VI

2. Revenue Recognition

Sales comprises sale of goods and services net of trade discount and inclusive of Excise duty.

Term Loan from SBI Secured By First Charge on All Fixed Assets (Present and Future Both Moveable and Immovable.) of The Company Collateral-second Charge on All Current Assets of the Company

The Term Loans-1 Is Repayable In 12 Quarterly Instalments and out of which 6 are paid .

The Repayment Commenced from December 2010

The Second Term Loan of Rs 500 Lacs taken on 09.11.2011 and the Repayable in 10 Quartrely Instalments Commenced from December 2011

The Instalments that were falls Due In the Next 12 Months has been shown under Current Labilities an amount of Rs 366.64 Lacs was shown under Current Liabilities

The Loan for Vehicles from ICICI Bank and the Vehicle is Hypothecated to ICICI Bank the Instalment for the next 12 Months amounting 4.5 Lacs were Considered under Current Liabilities.

The other Loans are from Directors and their relatives. The Interest were paid at 15%.

No Part of the Loan Is Repayable Till The Term Loan from the Banks are Cleared.

INTEREST FREE SALES TAX LOAN IS REPAYABLE AS FOLLOWS:

1. Plant-I - Second Deferment Repayable In 14 Years Commencing from April 2012.

2. Plant-II - First Deferment Repayable In 10 Years Commenced from 2004 and Second Deferment from April 2015.

3. Plant-III - Repayable In 14 Years Commenced from April 2011.

An Amount Of Rs 198.09 Lacs Represents Repayable In The Next 12 Months had been shown under Current Liabilities.

The work in progress represents only part of the regular product that were under production and NOT covered for any reservation of warranty claims

The finished goods were valued at cost which does not include excise duty component. The excise duty is neither considered for opening stock nor closing stock .

This method was followed consistantly by the company.

The Raw materails including traded goods, stores and spares were valued at cost to the unit.


Mar 31, 2011

1. Method of Accounting

The financial statements have been prepared on accrual basis and at historical cost in Accordance with generally accepted accounting principles in India and provisions of the Companies act 1956 read with the Companies (Accounting Standards) Rules 2006.

2. Revenue Recognition

Sales comprises sale of goods and services net of trade discount and inclusive of Excise duty and sales Tax.

3. Fixed Assets

A. (a) Fixed assets are stated at cost less depreciation. The cost of Fixed Assets is net of Cenvat credit availed and to be claimed.

(b) Depreciation on Fixed Assets added or disposed during the year is provided on pro-rata basis with respective date of acquisition or disposal.

(c) The Fixed Assets includes self made machines.

B. Depreciation:

Being the company had claimed Depreciation on Straight line basis, the Assets on which 100% Depreciation claimed were reduced from the Gross Block of Asset and Gross Depreciation and the value is Rs.9.21 crores. Since the assets were fully depreciated beyond 95% of the gross value the excess 5% of gross value had been taken to Impairment assets and General Reserve. The depreciation will be claimed only upto 95% of the gross value and the balance 5% will be transferred to impaired assets. This Policy will be followed from the currant financial year. Due to above there is no impact on the profit of the company.

4. Inventories

i) Raw material, stores and spares and work-in-progress are valued at cost, net of Cenvat Credit. Finished goods are valued at the lower of cost or market value whichever is lower.

ii) Excise Duty on stocks lying with the company is not added to the cost of finished goods inventory. This is in line with the consistency in valuation of inventory by followed by the Management.

5. Excise Duty

Excise duty on goods manufactured is accounted only at the time of removal of goods from the factory.

6. Foreign Currency Transactions

a) Foreign Currency transactions are recognized in the books at the exchange rates prevailing on the date of the transaction.

b) In the case of Current Assets/Liabilities the difference (Gain or Loss) between the actual payment and the amount recognized in the books is accounted as Exchange Gain or Loss..

c) Other income includes the following items

i) Sale of DEPB Licenses Rs. 69.19 lacs.

ii) Exchange Fluctuation Loss Rs. 0.17 lacs.

7. Retirement Benefits

a) The Company's contribution to Provident Fund is administered through Regional Provident Fund Commissioner and being charged to revenue as incurred.

b) Gratuity in respect of past and present services of employees is being accounted for on accrual basis based on actuarial valuation done by the company. The payment of Gratuity to the employees who had

left the service had been adjusted against the provision made. The provision of gratuity has been computed as on the date of closure of accounts by reducing the provision made in the earlier years.

c) Leave encashment is accounted for on cash basis on the basis of the actual payments made.

8. Taxes on Income

a) Current Tax: Provision for Income Tax is determined in accordance with the provisions Of Income Tax Act. 1961.

b) Deferred Tax Provision: Deferred Tax is recognized on timing differences being the Differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s). Provision had been made on the account of above as there exist deferment assets.

c) The timing deference on account of Depreciation charged on the Assets as per the Companies Act and as per the Income Tax Act has been provided. The net deferred tax liability over the Deferred Tax Assets was Rs. 25.03 lacs was considered for the current year as Rs.25.00 lacs.


Mar 31, 2010

1. Method of Accounting

The financial statements have been prepared on accrual basis and at historical cost in a accordance with generally accepted accounting principles in India and provisions of the Companies Act 1956 read with the Companies (Accounting Standards) Rules 2006.

2. Revenue Recognition

Sales comprises sale of goods and services net of trade discount and inclusive of Excise duty and sales Tax.

3. Fixed Assets

A. (a) Fixed Assets are stated at cost less depreciation. The cost of Fixed Assets is net of Cenvat credit

availed and to be claimed,

(b) Depreciation on Fixed Assets added or disposed during the year is provided on pro-rata basis with respective date of acquisition or disposal.

(c) The Fixed Assets includes self made machines.

B. Depreciation:

Being the Company had claimed Depreciation on Straight line basis, the Assets on which 100% Depreciation claimed were reduced from the Gross Block of Asset and Gross Depreciation and the value is Rs.9.00 crores

4. Inventories

i) Raw material, stores and spares and work-in-progress are valued at cost, net of cenvat Credit. Finished goods are valued at the lower of cost or market value whichever is lower.

ii) Excise Duty on stocks lying with the company is not added to the cost of finished goods Inventory. This is in line with the consistency in valuation of inventory by followed by the Management.

5. Excise Duty

Excise duty on goods manufactured is accounted only at the time of removal of goods from the factory.

7. Retirement Benefits

a) The Companys contribution to Provident Fund is administered through Regional Provident Fund Commissioner and being charged to revenue as incurred.

b) Gratuity in respect of past and present services of employees is being accounted for on accrual basis based on actuarial valuation done by the company. The payment of Gratuity to the employees who had

left the service had been adjusted against the provision made. The provision of gratuity has been computed as on the date of closure of accounts by reducing the provision made in the earlier years.

c) Leave encashment is accounted for on cash basis on the basis of the actual payments made. 8. Taxes on Income

a) Current Tax: Provision for Income Tax is determined in accordance with the provisions Of Income Tax Act. 1961.

b) Deferred Tax Provision: Deferred Tax is recognized on timing differences being the Differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s). Provision had been made on the account of above as there exist deferment assets.

c) The timing deference on account of Depreciation charged on the Assets as per the Companies Act and as per the Income Tax Act has been provided. The net deferred tax liability over the Deferred Tax Assets was Rs. 25.03 lacs was considered for the current year as Rs.25.00 lacs.

 
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