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Accounting Policies of SAR Auto Products Ltd. Company

Mar 31, 2015

A. Basis for Preparation of financial statement

The financial statements have been prepared under the historical cost convention in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standard specified under section 133 of the Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 as applicable.

B. Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

C. Tangible Fixed Assets:

Fixed Assets are stated at cost net of CENVAT/ Value Added Tax, Rebates, discounts, less accumulated depreciation and impairment loss, if any.

The cost of fixed assets comprises its purchase price, including import duties and other non-refundable taxes or levies, where ever applicable, and any directly attributable cost of bringing the assets to its working condition for its intended use. Borrowing cost incurred for qualifying assets is capitalized up to the date the asset is ready for intended use, based on borrowings incurred specifically for financing the asset or the weighted average rate of all other borrowings, if no specific borrowings have been incurred for the asset.

D. Depreciation/Amortization:

Depreciation has been provided on Written down Value Method as per the Schedule II to the Companies Act, 2013. As regards addition, deprecation has been provided on pro-rata basis from the date the assets are put to use during the financial year. In respect of asset sold or disposed off during the year, deprecation is provided till the date of sale/disposal of the assets.

E. Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired.

F. Investments:

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

G. Inventories:

Inventories are valued at cost or net realizable value whichever is lower.

Inventories comprise of all cost of purchase, conversion and other cost incurred for bringing the inventory to its present location and condition.

H. Revenue Recognition:

Sales of Goods are recognized on dispatch to customers, when materially all significant risk and reward of ownership are transferred to the customers and no effective ownership is retained. Sales are recorded net of Central sales tax/Value added tax.

Gain on the transaction of Shares & Securities is recognized at the point of sale of the Shares and Securities.

Dividend is recognized when right to receive is established.

Profit or loss on sale of assets is recognized on sale of assets.

Interest on deployment of surplus funds is recognized using the time proportion method based on the interest rates implicit in the transaction.

Claims are recognized on receipt basis.

I. Borrowing Cost:

Borrowing costs are recognized in the Statement of Profit & Loss except borrowing costs that are attributable to the construction of qualifying assets which are capitalized to the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

J. Foreign Currency Transactions:

All Transactions in foreign currency are recorded at the exchange rates prevailing on the dates when relevant transactions take place.

Monetary Items in the forms of Assets or Liabilities, outstanding at the close of the year, are restated in Indian Currency at the appropriate rates of exchange prevailing on the date of Balance Sheet.

Exchange differences arising on settlement of transactions and translation of monetary items are recognized in The Statement of Profit & Loss as Gain or Loss in the year in which they arise.

K. Income Tax:

Current Tax: Provision is made for income tax on yearly basis, under the tax-payable method, based on tax liability, as computed after taking credit for allowances and exemptions as per Income Tax Act, 1961.

Deferred Tax: Deferred tax liability or asset is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

L. Employee Benefits:

Short Term Employee Benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Defined Contribution Plan

Company's contributions to employee's benefits fund are charged to statement of Profit & Loss for the year in which contribution for the same becomes due.

M. Provisions

Provisions involve substantial degree of estimation in measurement and are recognized where there is a present obligation as a result of past events and it is probable that there will be an outflow of resources embodying economic benefits. These are reviewed at each balance sheet date to reflect the current best estimate.

N. Contingent Liability and Contingent Assets

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future event beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources embodying future economic benefits will be required to settle the obligation. The company does not recognize a contingent liability but discloses its existence in the financial statement.

Contingent assets are neither recognized nor disclosed in the financial statements following the principle of conservatism.

O. Cash Flow Statements

Cash flow statement is reported using indirect method, whereby Profit / (Loss) before tax is adjusted for the effects of transaction of non-cash in nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, Investing and financing activities of the company are segregated based on available information. Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investment with original maturity of three months or less.






Mar 31, 2013

A. Basic for Preparation of financial statement

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India. The company has prepared these to comply in all material respects with accounting standards notified under the Companies (Accounting standards) Rules, 2006 and the reverent provisions of the Companies Act, 1956.

B. Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

C. Tangible Fixed Assets:

Fixed Assets are stated at cost net of CENVAT/ Value Added Tax, Rebates, discounts, less accumulated depreciation and impairment loss, if any.

The cost of fixed assets comprises its purchase price, including import duties and other non- refundable taxes or levies, where ever applicable, and any directly attributable cost of bringing the assets to its working condition for its intended use. Borrowing cost incurred for qualifying assets is capitalized up to the date the asset is ready for intended use, based on borrowings incurred specifically for financing the asset or the weighted average rate of all other borrowings, if no specific borrowings have been incurred for the asset.

D. Depreciation/Amortization:

Depreciation has been provided on the Written Down Value Method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. Deprecation has been provided on pro-rata basis from the date the assets are put to use during the financial year. In respect of asset sold or disposed off during the year, deprecation is provided till the date of sale/disposal of the assets.

E. Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired.

F. Investments:

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

G. Inventories:

Inventories are valued at cost or net realizable value whichever is lower.

Inventories comprise of all cost of purchase, conversion and other cost incurred for bringing the inventory to its present location and condition

H. Revenue Recognition:

Sales of Goods are recognized on dispatch to customers, when materially all significant risk and reward of ownership are transferred to the customers and no effective ownership is retained. Sales are recorded net of Central sales tax/Value added tax.

Gain on the transaction of Shares & Securities is recognized at the point of sale of the Shares and Securities.

Dividend is recognized on receipt basis.

Profit or loss on sale of assets is recognized on sale of assets.

Interest on deployment of surplus funds is recognized using the time proportion method based on the interest rates implicit in the transaction.

Claims are recognized on receipt basis.

I. Foreign Currency Transactions:

Foreign currency transactions are recorded on initial recognition in the reporting currency and exchange difference arising on settlement of monetary assets and liabilities of the company are recognized as income or expenses in Statement of Profit & Loss.

Monetary items denominated in foreign currency are revalued at the rates of exchange as on the Balance Sheet date and exchange gain/loss is dealt with in the Statement of Profit & Loss.

J. Income Tax:

Current Tax: Provision is made for income tax on yearly basis, under the tax-payable method, based on tax liability, as computed after taking credit for allowances and exemptions as per Income Tax Act, 1961.

Deferred Tax: Deferred tax liability or assets is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

K. Employee Benefits:

Short Term Employee Benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Defined Contribution Plan

Company''s contributions to employee''s benefits fund are charged to statement of Profit & Loss for the year in which contribution for the same becomes due.

Gratuity

Incremental expenditure on Gratuity for each year is arrived at as per actuarial valuation and is recognized and charged to The Statement of Profit and Loss in the year in which employee has rendered service.

L. Provisions

Provisions involve substantial degree of estimation in measurement and are recognized where there is a present obligation as a result of past events and it is probable that there will be an outflow of resources embodying economic benefits. These are reviewed at each balance sheet date to reflect the current best estimate.

M. Contingent Liability and Contingent Assets

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future event beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources embodying future economic benefits will be required to settle the obligation. The company does not recognize a contingent liability but discloses its existence in the financial statement.

Contingent assets are neither recognized nor disclosed in the financial statements following the principal of conservatism.

N. Cash Flow Statements

Cash flow statement is reported using Indirect method, whereby Profit / (Loss) before tax is adjusted for the effects of transaction of non-cash in nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, Investing and financing activities of the company are segregated based on available information. Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investment with original maturity of three months or less.


Mar 31, 2012

A] Accounting Convention:

The financial statements for the year ended 31st March, 2012 are prepared under historical cost convention. Revenues are recognized and expenses are accounted on accrual basis with necessary provisions for all known liabilities and losses.

B] Fixed Assets & Depreciation:

Fixed Assets are stated at cost net of recoverable taxes and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized. Depreciation on fixed assets is provided to the extent of depreciable amount on written down value method (WDV) at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 over their useful life except, Depreciation on assets disposed off during the year is provided on pro-rata basis. Depreciation on newly added assets is charged as and when the same have been installed and put to use.

C] Inventories:

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.

D] Revenue:

1. Sales of Auto Parts & Machinery Parts are accounted at the point of dispatch.

2. Gain on the transaction of Shares & Securities is recognized at the point of sale of the Shares and Securities.

3. Dividend is recognized on receipt basis.

4. Profit or loss on sale of assets is recognized on sale of assets.

5. Interest on deployment of surplus funds is recognized using the time proportion method based on the interest rates implicit in the transaction.

6. Claims are recognized on receipt basis.

E] Investments:

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

F] Income Tax:

Current Tax: Provision is made for income tax on yearly basis, under the tax-payable method, based on tax liability, as computed after taking credit for allowances and exemptions if any.

Deferred Tax:Deferred tax charge or credit is recognized using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Deferred Tax assets/ liabilities are reviewed at each Balance Sheet date based on developments during the year and available case laws, to reassess realization/ liabilities.

G] Foreign Currency Transaction:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction. 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 contract. Non monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

H] 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.


Mar 31, 2011

A] Accounting Convention:

The financial statements for the year ended 31st March, 2011 are prepared under historical cost convention. Revenues are recognized and expenses are accounted on accrual basis with necessary provisions for all known liabilities and losses.

B] Fixed Assets & Depreciation:

(i) Fixed Assets are stated at the Original cost inclusive of incidental expenses related to acquisition.

(ii) Assets are depreciated on Written down value method at the rates specified in Schedule XIV of the Companies Act, 1956.

(iii) Depreciation on assets disposed off during the year is provided on pro-rata basis.

(iv) Depreciation on newly added assets is charged as and when the same have been installed and put to use.

C] Inventories;

The inventories are valued at cost or net realizable value, whichever is lower.

D] Revenue:

Sales of Auto Farts & Machinery Parts are accounted at the point of dispatch.

Dividend is recognized on receipt basis.

Profit or loss on sale of assets is recognized on sale of assets.

Interest on deployment of surplus funds is recognized using the time proportion method based on the interest rates implicit in the transaction.

Claims are recognized on receipt basis.

E] Investments:

Investments are classified into Current investments and Long-term investments. Current investments are stated at lower of cost or fair market value. Long-term investments are stated at cost. Provision for diminution in the value of Long-term investments is made only if such a decline is other than temporary in the opinion of the management.

F] Income Tax:

Current Tax: Provision is made for income tax on yearly basis, under the tax-payable method, based on tax liability, as computed after taking credit for allowances and exemptions if any.

Deferred Tax: Deferred tax charge or credit is recognized using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Deferred Tax assets/ liabilities are reviewed at each Balance Sheet date based on developments during the year and available case laws, to reassess realization/ liabilities.

G] Foreign Currency Transaction:

Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. Monetary foreign currency assets and liabilities outstanding at the close of the financial year are revalued at the exchange rates prevailing on the balance sheet date.

Exchange differences arising on account of fluctuations in the rate of exchange are recognized in the Profit & Loss Account.

 
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