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Accounting Policies of Santosh Fine - Fab Ltd. Company

Mar 31, 2014

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared as a going concern basis under historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

B. USE OF ESTIMATE

The preparation of financial statements in conformity with the generally accepted accounting principles 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 estimates are recognised in the period in which the results are known/ materialized.

C. FIXED ASSETS

Fixed assets are stated at cost of acquisition or construction, net of cenvat/Value added Tax, less accumulated depreciation and impairment loss, if any. All costs, including finance cost till commencement of commercial production & net charges on forward exchange contracts attributable to the fixed assets are capitalised.

D. INTANGIBLE ASSETS

i. Intangible assets are stated at cost of acquisition less accumulated amortization.

ii. As per Accounting Standard-26 "Intangible Assets", expenditure from which no future economic benefits can be derived are recognised as an expense, like expenditure on start-up activities, unless this expenditure is included in the cost of an item of Fixed Assets under AS-10. Start up costs may consists of Preliminary Expenses incurred in establishing a legal entity such as legal and secretarial costs, etc.

E. CAPITALWORK-IN-PROGRESS

All expenses including direct and indirect expenses that arc exclusively being incurred for the proposed project, except as mentioned in AS-26 but otherwise required by AS-10, are being accumulated and will be attributable to the proposed acquisition / construction of fixed assets to make it reach in its working condition for its intended use, including depreciation, enabling ultimate allocation to different assets on a reasonable basis.

F. DEPRECIATION

i. Depreciation is provided on straight line method at the rates and in the manner prescribed in Schedule XIV, of the Companies Act, 1956.

ii. Depreciation on addition / deletion during the year has been provided on prorate basis to the date of addition/deletion.

iii. No depreciation has been charged on Lease- hold land.

G. IMPAIRMENT OF ASSETS

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

H. INVESTMENTS

Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in the opinion of the management. The carrying amount for current investments recognized in Financial Statements is the lower of cost and fair value. Any reduction to fair value and any reversals of such reductions, in case of these Current Investments, are included in the profit and loss statement.

I. TRANSACTION IN FOREIGN CURRENCY

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing 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 those items, which are covered by forward exchange contracts, the difference between the year end rate and spot rate on the date of the contract is recognized as exchange difference and transferred to dollar hedge account as on to date of Balance Sheet and the premium paid on forward contracts has been recognized over the life of the contract.

iii. All other exchange difference are dealt with in the profit & loss account.

J. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, service tax, excise duty and sales during trial run period, adjusted for discount (net).Sales are recorded net of vat and excise duty, after deducting returns, discount & claim.

K. EXPORT INCENTIVES

i. Benefit on account of entitlement to Import duty free materials under the "Duty Exemption pass book Scheme/Focus Market Scheme/Focus Product scheme" is recognized as and when right to receive are established as per the terms of the scheme.

ii. The Benefits in respect of Advance Licence received by the Company against the Export made by it are recognized as and when goods are imported against them.

iii. The Benefit in respect of Duty Drawback is recoginsed at the time of exports.

L. INVENTORIES

Inventories are valued at lower of cost and net realisable value. Work in process and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

M. EMPLOYEE BENEFITS

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognised in the period in which the employee renders the related service. Long Term Defined Contributions are accounted for on the basis of contributions made during the year, whereas Long Term Defined Benefits are accounted on the basis of as and when it is paid.

N. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

O. PROVISION, 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 event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2013

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared as a going concern basis under historical cost convention, in accordance with (he Company accept accounting Pencil and the provisions of the Companies Act, 1956 as adopted consistently by the

B. USE OF ESTIMATE

The preparation of financial statements in conformity with the generally accepted accounting principles 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 estimates are recognized in the period in which the results are known materialized.

C. FIXEDASSETS

Fixed assets are stated at cost of acquisition or construction, net of convert/Value added Tax, less accumulated depreciation and impairment loss, if any. All costs, including finance cost till commencement of commercial production & net charges on toward exchange contracts attributable to the Fixed assets are capitalized.

I). INTANGIBLE ASSETS

i. Intangible assets are stated at cost of acquisition less accumulated amortization.

ii. As per Accounting Standard-26 "Intangible Assets''*, expenditure from which no future economic benefits can be derived are recognized as an expense, like expenditure on start-up activities, unless this expenditure is included in the cost of an it e m

E. CAPITALWORK-IN-PROGRESS

All expenses including direct and indirect expenses that are exclusively being incurred for proposed project except us the proposed acquisition/construction of fixed accumulated and will be attributable to the proposed ninth h- 0 fix. classless 10 rack " reach "s working condition for its intended use. including depreciation cabling ultimately location to different assets on reasonable basis.

F. DEPRECIATION

i. Depreciation is provided on straight line method at the rules and in the manner prescribed in Schedule XIV. of the t companies Acts 06.

ii Depreciation on addition/ deletion during the year has been provided on prorate basis to the date of addition/ deletion.

iii. No depreciation has been charged on Lease- hold land.

G. IMPAIRMENT OF ASSETS

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

H. INVESTMENTS

Long term investments are stated at cost provision for diminution in the value of long term investment is made only if such opinion to the management. The carrying amount for current investments recognized in Financial Statements is the lower of cost and fair value. Any reduction to fair value and any reversals of such reductions, in ease of these C arrant Investments, are included in the profit and loss statement

I. TRANSACTION IN FOREIGN CURRENCY

Transaction denominated in forcing currencies are normalcy "corded at the exchange role prevailing at I he date of the currencies a'' ''the year end are restated at year end rates. In case of those items "''f art towered by exchange contracts, the difference between the yearend role and spot role on the date of the as exchange difference and transferred lo dollar hedge account as on to date of Balance Sheet and the premium prude on forward contracts has been recognized over the life of the contract 111. All other exchange difference arc dealt with in the profit & loss account

J. REVENUE RECOGNITION A

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, service tax. excise duty and sales during trial run period, adjusted for discount (net).Sales arc recorded net of vat and excise duty, after deducting returns, discount & claim.

K. EXPORT INCENTIVES

i. Benefit on account of entitlement to Import duty free materials under the "Duty Exemption pass book Scheme/Focus Market Scheme/Focus Product scheme" is recognized as and when right to receive are established as per the terms of the scheme.

ii. The Benefits in respect of Advance Licensee received by the Company against the Export made by it arc recognized as and when goods are imported against them.

in. The Benefit in respect of Duty Drawback is recognized at the lime of exports.

L. INVENTORIES

Inventories arc valued at lower of cost and net realizable value. Work in process and finished goods include appropriate proportion of overheads and. where applicable, excise duty.

M. EMPLOYEE BENEFITS

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognized in the period in which the employee renders the related service. Long Term Defined Contributions are accounted for on the basis of contributions made during the year, whereas Long Term Defined Benefits arc accounted on the basis of as and when it is paid.

N. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act. 1%1. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are connected or substantively enacted as on the balance sheet date. Deferred lax tassel is recognized and carried forward only us the Cxienf that there is a virtual certainty that the asset will be realized in future.

O. PROVISION, CONTINGENT LIABILITIES ANO CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and if is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2012

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared as a going concern basis under historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

B. USE OF ESTIMATE

The preparation of financial statements in conformity with the generally accepted accounting principles 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 estimates are recognised in the period in which the results are known/ materialized.

C. FIXED ASSETS ,

Fixed assets are stated at cost of acquisition or construction, net of cenvat/Value added Tax, less accumulated depreciation and impairment loss, if any. All costs, including finance cost till commencement of commercial production & net charg& on forward exchange contracts attributable to the fixed assets are capitalised.

D. INTANGIBLE ASSETS

i. Intangible assets are stated at cost of acquisition less accumulated amortization. Computer Software is amortized over a period of five years.

ii. As per Accounting Standard-26 "Intangible Assets", expenditure from which no future economic benefits can be derived are recognised as an expense, like expenditure on start-up activities, unless this expenditure is included in the cost of an item of Fixed Assets under AS-10. Start up costs may consists of Preliminary Expenses incurred in establishing a legal entity such as legal and secretarial costs, etc.

E. CAPITAL WORK-IN-PROGRESS

All expenses including direct and indirect expenses that are exclusively being incurred for the proposed project, except as mentioned in AS-26 but otherwise required by AS-10, are being accumulated and will be attributable to the proposed acquisition / construction of fixed assets to make it reach in its working condition for its intended use, including depreciation, enabling ultimate allocation to different assets on a reasonable basis.

F. DEPRECIATION

i. Depreciation is provided on straight line method at the rates and in the manner prescribed in Schedule XIV, of the Companies Act, 1956.

ii. Depreciation on addition / deletion during the year has been provided on prorate basis to the date of addition/deletion.

iii. No depreciation has been charged on Lease- hold land.

G. IMPAIRMENT OF ASSETS

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

H. INVESTMENTS

Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in the opinion of the management. The carrying amount for current investments recognized in Financial Statements is the lower of cost and fair value. Any reduction to fair value and any reversals of such reductions, in case of these Current Investments, are included in the profit and loss statement.

I. TRANSACTION IN FOREIGN CURRENCY

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing 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 those items, which are covered by forward exchange contracts, the difference between the year end rate and spot rate on the date of the contract is recognized as exchange difference in the profit and loss account and the premium paid on forward contracts has been recognized over the life of the contract.

iii. All other exchange difference are dealt with in the profit & loss account.

J. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, service tax, excise duty and sales during trial run period, adjusted for discount (net), Value Added Tax (VAT) and gain / loss on corresponding hedge contracts. Sales are recorded net of vat and excise duty, after deducting returns, discount & claim.

K. EXPORT INCENTIVES

i. Benefit on account of entitlement to Import duty free materials under the "Duty Exemption pass book Scheme/Focus Market Scheme/Focus Product scheme" is recognized as and when right to receive are established as per the terms of the scheme.

ii. The Benefits in respect of Advance Licence received by the Company against the Export made by it are recognized as and when goods are imported against them.

iii. The Benefit in respect of Duty Drawback is recoginsed at the time of exports.

L. INVENTORIES '

Inventories are valued at lower of cost and net realisable value. Work in process and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

M. EMPLOYEE BENEFITS

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognised in the period in which the employee renders the related service. Long Term Defined Contributions are accounted for on the basis of contributions made during the year, whereas Long Term Defined Benefits are accounted on the basis of as and when it is paid.

N. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961 Deferred tax will be provided at the end of year, if any.

O. PROVISION, 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 event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2011

A. BASIS OF PREPERATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles & the provisions of the Companies Act, 1956, as adopted consistently by the company.

The company generally follows mercantile system of accounting and recognizes significant items of Income & Expenditure on an accrual basis. The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimated are recognized in the period in which the results are known/materialized.

B. FIXED ASSETS

Fixed assets are recorded at the cost of acquisition/construction (net of Vat/ Cenvat availed) and all direct expenses up to date of production, less accumulated depreciation.

C. DEPRECIATION

Depreciation has been provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956. Depreciation on addition/deletion during the year has been provided on prorata basis to the date of addition/deletion. No depreciation has been charged on Lease- hold land.

D. INVESTMENT

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

E. INVENTORIES

Inventories are valued as per below given basis:

A. Raw material: - Lower of cost or market value.

B. Stock in process: -At estimated cost.

C. Finish stock: - Lower of cost or net realisable value.

F. SALES & PURCHASE

Sales are recorded net of vat and excise duty, after deducting returns, discounts & claim. Purchases are recorded net of Value Added Tax and Cenvat availed.

G. EMPLOYEE RETIREMENT BENEFITS

Gratuity is being accounted on cash basis as & when paid. Company's contribution to provident fund and leave encashment are charged to profit & loss account on accrual basis.

H. CONTINGENT LIABILITIES

Contingent liabilities are not provided for and are disclosed separately by way of notes.

I. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign exchange, not covered by forward contracts, are accounted at the exchange rates prevailing on the date of the transaction. Gains or losses arising out of subsequent fluctuations are accounted for on actual payment/ realization. Amount outstanding on the year end are accounted for exchange gain /loss at rate prevailing on the year end.

J. EXPORT INCENTIVES

Export Incentives have been accounted on accrual basis on exception of claim receivable, any amount & difference between actual amounts received & provision/claimed not accepted has been recorded in the year of actual realization/materialized.


Mar 31, 2010

A. BASIS OF PREPERATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles & the provisions of the Companies Act, 1956, as adopted consistently by the company.

The company generally follows mercantile system of accounting and recognizes significant items of Income & Expenditure on an accrual basis. The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimated are recognized in the period in which the results are known/materialized.

B. FIXED ASSETS

Fixed assets are recorded at the cost of acquisition/construction (net of Vat/ Cenvat availed) and all direct expenses up to date of production, less accumulated depreciation.

C. DEPRECIATION

Depreciation has been provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956. Depreciation on addition/deletion during the year has been provided on prorata basis to the date of addition/deletion. No depreciation has been charged on Lease- hold land.

D. INVESTMENT

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

E. INVENTORIES

Inventories are valued as per below given basis:

A. Raw material: - Lower of cost or market value.

B. Stock in process: -At estimated cost.

C. Finish stock: - Lower of cost or net realisable value.

F. SALES & PURCHASE

Sales are recorded net of vat and excise duty, after deducting returns, discounts & claim. Purchases are recorded net of Value Added Tax and Cenvat availed.

G. EMPLOYEE RETIREMENT BENEFITS

Gratuity is being accounted on cash basis as & when paid. Companys contribution to provident fund and leave encashment are charged to profit & loss account on accrual basis.

H. CONTINGENT LIABILITIES

Contingent liabilities are not provided for and are disclosed separately by way of notes.

I. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign exchange, not covered by forward contracts, are accounted at the exchange rates prevailing on the date of the transaction. Gains or losses arising out of subsequent fluctuations are accounted for on actual payment/ realization. Amount outstanding on the year end are accounted for exchange gain /loss at rate prevailing on the year end.

J. EXPORT INCENTIVES

Export Incentives have been accounted on accrual basis on exception of claim receivable, any amount & difference between actual amounts received & provision/claimed not accepted has been recorded in the year of actual realization/materialized.