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Accounting Policies of Sat Industries Ltd. Company

Mar 31, 2015

1) Method of Accounting

a) The financial statements are prepared on the historical cost convention and in accordance with the generally accepted accounting principles in India.

b) The Company follows accrual system of accounting in the preparation of accounts.

c) The UAE Branch financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the same is merged in the Company.

d) Accounting policies not specifically referred to otherwise, have been followed consistently, and are in consonance with generally accepted accounting principle in India.

2) Fixed Assets

a) Fixed assets are stated at cost, net of Cenvat/ VAT, if any, less accumulated depreciation. Cost includes freight, duties and other incidental expenses incurred till the commencement of commercial production. Incidental expenses include establishment expenses, interest on borrowed funds used for capital expenditure and other administrative expenses.

b) Capital Work in Progress includes incidental expenses pending allocation/ apportionment in respect of the uninstalled/ incomplete fixed assets.

3) Depreciation

Depreciation on Fixed Assets has been provided based on useful lives prescribed in Schedule II of the Companies Act, 2013 on all assets, except in respect of the following assets, where useful life is different than those prescribed in Schedule II are used as per technical estimate.

Particulars Useful Life

Computers 3 years

Office Equipment 5 years

4) Impairment of Assets

Factors giving rise any indication of any impairment of the carrying amount of the Company's assets are appraised at each Balance Sheet date to determine and provide/revert an impairment loss following Accounting standard 28 for impairment of assets.

5) Investments

Long term investments are carried at cost less provision for permanent diminution, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

6) Revenue Recognition

a) All revenues, costs, assets and liabilities are accounted for on accrual basis except where there is no reasonable certainty. Turnover is excluding Inter Division Sales & Sales-tax but inclusive of excise duty, export incentives and exchange fluctuations.

b) Claim lodged with insurance companies are recognized as income on acceptance by the Insurance Company. The Excess/ Shortfall of claims passed are adjusted in the year of receipt.

7) Foreign Currency Transactions

a) The reporting currency of the Company is Indian Rupee.

b) The financial statement of foreign branch, which is considered as non-integral foreign operation, are converted in Indian Rupees at the following exchange rates:

c) The resultant exchange differences on translation of foreign branch are debited to Profit and loss account as the company has closed its foreign branch operations as on 31st March, 2015.

8) Retirement Benefits

a) As per the management of the Company, the provision of The Payment of Gratuity Act, 1972 is not applicable to the Company since the number of Indian employees is within the limit as prescribed by the Act however the Company has voluntarily taken policy of Gratuity with Life Insurance Corporation of India for future payment of gratuity to employees.

b) The company does not have the policy of leave encashment and the annual leave entitled to the employees is required to be availed in the year itself, otherwise the same lapses.

c) As per the management of the Company, the provision of The Employee's Provident Fund and Miscellaneous Provisions Act, 1952 is not applicable to the Company since the numbers of employees are within the limit as prescribed by the respective act.

9) 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.

10) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

11) Taxation

a) Current tax has been provided as per the provision of Income Tax Act 1961.

b) Tax expenses comprise of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred tax reflects the impact of current year timing differences between book profit and taxable income for the year and reversal of timing differences of earlier years.

The deferred tax for timing differences between the book profit and taxable income for the year is accounted for using the tax rates and laws that have been substantially enacted as of the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward unabsorbed depreciation and tax losses, deferred tax assets are recognized only to the extent there is virtual certainty supported by convincing evidence that sufficient taxable income will be available against which such deferred tax asset can be realized.

Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit and Loss account and as shown as MAT Credit entitlement. The company reviews the same at each Balance Sheet date and write down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal income-tax during specified period.

12) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.


Mar 31, 2014

1) Method of Accounting

a) The fnancial statements are prepared on the historical cost convention and in accordance with the generally accepted accounting principles in India.

b) The Company follows accrual system of accounting in the preparation of accounts.

c) The UAE Branch fnancial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the same is merged in the Company.

d) Accounting policies not specifcally referred to otherwise, have been followed consistently, and are in consonance with generally accepted accounting principle in India.

2) Fixed Assets

Fixed Assets are stated at cost inclusive of incidental expenses less accumulated depreciation.

3) Depreciation

Depreciation is charged on a pro-rata basis on written down value as per the rates and in the manners prescribed under the Schedule XIV of the Companies Act, 1956. For offce equipment acquired at foreign branch which is written off in equal installments, depreciation is charged @ 20% p.a. on S.L.M. Basis, which is higher than the rate prescribed in Schedule XIV of the Companies Act, 1956.

4) Impairment of Assets

Factors giving rise any indication of any impairment of the carrying amount of the Company''s assets are appraised at each Balance Sheet date to determine and provide/revert an impairment loss following Accounting standard 28 for impairment of assets.

5) Investments

Long term investments are carried at cost less provision for permanent diminution, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

6) Revenue Recognition

Sales are recognized on dispatch of goods to customers.

8) Retirement Benefts

a) As per the management of the Company, the provision of The Payment of Gratuity Act, 1972 is not applicable to the Company since the number of Indian employees is within the limit as prescribed by the Act however the Company has voluntarily taken policy of Gratuity with Life Insurance Corporation of India for future payment of gratuity to employees.

b) The company does not have the policy of leave encashment and the annual leave entitled to the employees is required to be availed in the year itself, otherwise the same lapses.

c) As per the management of the Company, the provision of The Employee''s Provident Fund and Miscellaneous Provisions Act, 1952 is not applicable to the Company since the numbers of employees are within the limit as prescribed by the respective act.

9) 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 outfow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the fnancial statements.

10) Earning Per Share

Basic earning per share is calculated by dividing the net proft or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net proft or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

11) Taxation

a) a) Current tax has been provided as per the provision of Income Tax Act 1961.

b) Tax expenses comprise of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred tax refects the impact of current year timing differences between book proft and taxable income for the year and reversal of timing differences of earlier years.

The deferred tax for timing differences between the book proft and taxable income for the year is accounted for using the tax rates and laws that have been substantially enacted as of the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward unabsorbed depreciation and tax losses, deferred tax assets are recognized only to the extent there is virtual certainty supported by convincing evidence that suffcient taxable income will be available against which such deferred tax asset can be realized.

12) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash fows by operating, investing and fnancing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

13) Inventories

Stock in Trade, if any, is valued at lower of cost or NRV after providing for damages and obsolesces.


Mar 31, 2013

1) Method of Accounting

a) The financial statements are prepared on the historical cost convention and in accordance with the generally accepted accounting principles in India.

b) The Company follows accrual system of accounting in the preparation of accounts.

c) The UAE Branch financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the same is merged in the Company.

d) Accounting policies not specifically referred to otherwise, have been followed consistently, and are in consonance with generally accepted accounting principle in India.

2) Fixed Assets

Fixed Assets are stated at cost inclusive of incidental expenses less accumulated depreciation.

3) Depreciation

Depreciation is charged on a pro-rata basis on written down value as per the rates and in the manners prescribed under the Schedule XIV of the Companies Act, 1956. For office equipment acquired at foreign branch which is written off in equal installments, depreciation is charged @ 20% p.a. on S.L.M. Basis, which is higher than the rate prescribed in Schedule XIV of the Companies Act, 1956.

4) Impairment of Assets

Factors giving rise any indication of any impairment of the carrying amount of the Company''s assets are appraised at each Balance Sheet date to determine and provide/revert an impairment loss following Accounting standard 28 for impairment of assets.

5) Investments

Long term investments are carried at cost less provision for permanent diminution, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

6) Revenue Recognition

Sales are recognized on dispatch of goods to customers.

7) Foreign Currency Transactions

a) The reporting currency of the Company is Indian Rupee.

b) The financial statement of foreign branch, which is considered as non-integral foreign operation, are converted in Indian Rupees at the following exchange rates:

c) The resultant exchange differences on translation of foreign branch are accumulated in the Foreign Currency Translation Reserve.

8) Retirement Benefits

a) As per the management of the Company, the provision of The Payment of Gratuity Act, 1972 is not applicable to the Company since the number of Indian employees is within the limit as prescribed by the Act however the Company has voluntarily taken policy of Gratuity with Life Insurance Corporation of India for future payment of gratuity to employees.

b) The company does not have the policy of leave encashment and the annual leave entitled to the employees is required to be availed in the year itself, otherwise the same lapses.

c) As per the management of the Company, the provision of The Employee''s Provident Fund and Miscellaneous Provisions Act, 1952 is not applicable to the Company since the numbers of employees are within the limit as prescribed by the respective act.

9) 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.

10) Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

11) Taxation

a) Current tax has been provided as per the provision of Income Tax Act 1961.

b) Tax expenses comprise of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred tax reflects the impact of current year timing differences between book profit and taxable income for the year and reversal of timing differences of earlier years.

The deferred tax for timing differences between the book profit and taxable income for the year is accounted for using the tax rates and laws that have been substantially enacted as of the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward unabsorbed depreciation and tax losses, deferred tax assets are recognized only to the extent there is virtual certainty supported by convincing evidence that sufficient taxable income will be available against which such deferred tax asset can be realized.

12) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Row Statements and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Row Statement consist of cash on hand and demand deposits with banks.

13) Inventories

Stock in Trade, if any, is valued at lower of cost or NRV after providing for damages and obsolesces.


Mar 31, 2012

Information pursuant to Para 5(ii) and Para 5(iii) of the General Information to Statement of Profit & Loss: Particulars of traded goods purchased, sold and inventory position is not available for the UAE Branch and also further the quantity details are not available and they are subject to further verification and relied upon as per the independent verification done by the foreign branch auditors.

1) Method of Accounting

a) The financial statements are prepared on the historical cost convention and in accordance with the generally accepted accounting principles in India.

b) The Company follows accrual system of accounting in the preparation of accounts.

c) The UAE Branch financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the same is merged in the Company.

d) Accounting policies not specifically referred to otherwise, have been followed consistently, and are in consonance with generally accepted accounting principle in India.

2) Fixed Assets

Fixed Assets are stated at cost inclusive of incidental expenses less accumulated depreciation.

3) Depreciation

Depreciation is charged on a pro-rata basis on written down value as per the rates and in the manners prescribed under the Schedule XIV of the Companies Act, 1956. For office equipment acquired at foreign branch which is written off in equal installments, depreciation is charged @ 20% p.a. on S.L.M. Basis, which is higher than the rate prescribed in Schedule XIV of the Companies Act, 1956.

4) Impairment of Assets

Factors giving rise any indication of any impairment of the carrying amount of the Company's assets are appraised at each Balance Sheet date to determine and provide/revert an impairment loss following Accounting standard 28 for impairment of assets.

5) Investments

Long term investments are carried at cost less provision for permanent diminution, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

6) Revenue Recognition

Sales are recognized on dispatch of goods to customers.

7) Foreign Currency Transactions

a) The reporting currency of the Company is Indian Rupee.

b) The financial statement of foreign branch, which is considered as non-integral foreign operation, are converted in Indian Rupees at the following exchange rates:

c) The resultant exchange differences on translation of foreign branch are accumulated in the Foreign Currency Translation Reserve.

8) Retirement benefits

a) As per the management of the Company, the provision of The Payment of Gratuity Act, 1972 is not applicable to the Company since the number of Indian employees is within the limit as prescribed by the Act however the Company has voluntarily taken policy of Gratuity with Life Insurance Corporation of India for future payment of gratuity to employees.

b) The company does not have the policy of leave encashment and the annual leave entitled to the employees is required to be availed in the year itself, otherwise the same lapses.

c) As per the management of the Company, the provision of The Employee's Provident Fund and Miscellaneous Provisions Act, 1952 is not applicable to the Company since the numbers of employees are within the limit as prescribed by the respective act.

9) 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.

10) Earning Per Share

Basic earning per share is calculated by dividing the net Profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net Profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

11) Taxation

a) Current tax has been provided as per the provision of Income Tax Act 1961.

b) Tax expenses comprise of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred tax reflects the impact of current year timing differences between book Profit and taxable income for the year and reversal of timing differences of earlier years.

The deferred tax for timing differences between the book Profit and taxable income for the year is accounted for using the tax rates and laws that have been substantially enacted as of the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward unabsorbed depreciation and tax losses, deferred tax assets are recognized only to the extent there is virtual certainty supported by convincing evidence that sufficient taxable income will be available against which such deferred tax asset can be realized.

12) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash fows by operating, investing and fnancing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

13) Inventories

Stock in Trade, if any, is valued at lower of cost or NRV after providing for damages and obsolesces.


Mar 31, 2011

1) METHOD OF ACCOUNTING

a) The financial statements are prepared on the historical cost convention and in accordance with the generally accepted accounting principles.

b) The Company follows accrual system of accounting in the preparation of accounts.

c) The UAE Branch financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and the same is merged in the Company.

d) Accounting policies not specifically referred to otherwise, have been followed consistently, and are in consonance with generally accepted accounting principle in India.

2) FIXED ASSETS

Fixed Assets are stated at cost inclusive of incidental expenses less accumulated depreciation.

3) DEPRECIATION

Depreciation is charged on a pro-rata basis on written down value as per the rates and in the manners prescribed under the Schedule XIV of the Companies Act, 1956. For office equipment acquired at foreign branch which is written off in equal installments, depreciation is charged @ 20% p.a. on S.L.M. Basis, which is higher than the rate prescribed in Schedule XIV of the Companies Act, 1956.

4) IMPAIRMENT OF ASSETS

Factors giving rise any indication of any impairment of the carrying amount of the Company's assets are appraised at each Balance Sheet date to determine and provide/revert an impairment loss following Accounting standard 28 for impairment of assets.

5) INVESTMENTS

Long term investments are carried at cost less provision for permanent diminution, if any, in value of such investments. Current investments are carried at lower of cost and fair value.

6) REVENUE RECOGNITION

a) Sales are recognised on dispatch of goods to customers

7) RETIREMENT BENEFITS

a) As per the management of the Company, in accordance with The Payment of Gratuity Act, 1972, the Act is not applicable to the Company since the number of Indian employees are within the limit as prescribed by the Act but the Company has voluntarily taken policy of Gratuity with Life Insurance Corporation of India for future payment of gratuity to employees.

b) The company does not have the policy of leave encashment and the annual leave entitled to the employees is required to be availed in the year itself, otherwise it will be lapsed.

c) As per the Management of the Company, the provision of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 is not applicable to the Company since the numbers of employees are within the limit as prescribed by the respective Act.

8) 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.

9) EARNING PER SHARE

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

10) TAXATION

a) Current tax has been provided as per the provision of Income Tax Act 1961.

b) Tax expenses comprise of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961. Deferred tax reflects the impact of current year timing differences between book profit and taxable income for the year and reversal of timing differences of earlier years.

The deferred tax for timing differences between the book profit and taxable income for the year is accounted for using the tax rates and laws that have been substantially enacted as of the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the company has carry forward unabsorbed depreciation and tax losses, deferred tax assets are recognized only to the extent there is virtual certainty supported by convincing evidence that sufficient taxable income will be available against which such deferred tax asset can be realized.

11) CASH FLOW STATEMENT

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.

12) INVENTORIES

Stock in Trade, if any, is valued at lower of cost or NRV after providing for damages and obsolesces.


Mar 31, 2010

Most of the accounting policies of the holding Company and that of the subsidiaries (except depreciation in the subsidiary companies) are similar, except the inventory valuation which is as under :

Sat Middle East Limited : Weighted Average Method

Sat Industries Limited FIFO Method

Sat Realty Limited : NA

Sat E-Com Limited : NA

(F) i) The difference between the cost of investment in the subsidiaries over the net assets at the time of acquisition

of shares in the subsidiaries is recognized in the financial statement as goodwill or capital reserve as the case may be.

ii) The holding company has during the year credited amount of Rs 31,53,629/- to Foreign Currency Translation Reserve. In case of foreign subsidiary, "Sat Middle East Limited" and the foreign branch of the holding company the operations are non-integral and their financial statements are converted in Indian Rupees at the following exchange rates :

a) Revenue and Expenses : Average Exchange rate prevailing during the year.

b) Current Assets & Current Liabilities : Exchange rate prevailing at the end of the year.

c) Fixed Assets : Historical Exchange rate prevailing at the time of purchase.

d) The foreign currency translation reserve adjustment of Rs 179,517,513 represents difference of opening net assets at closing rate and adjusted in consolidated profit and loss appropriation account subject to further reconciliation pending and therefore Accounting Standard 11 is not complied as a whole.

(G) Amortisation: Intangible assets are written off over a period of five years.

(H) Minority interests share of net profit of consolidated subsidiary for the year is identified and adjusted against the income in order to arrive at the net income attributable to shareholders of the Company.

(I) Minority interests share of net profit/loss of consolidated subsidiaries for the year is identified and presented in the consolidated balance sheet separate from liabilities and the equity of the Companys Shareholders.


Mar 31, 2009

(A) The consolidated financial statements are prepared in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India.

(B) PRINCIPLES OF CONSOLIDATION

a. The Consolidated financial statements comprise the financial statement of Sat Industrial Limited (The Holding Company) and its subsidiaries. The financial statements of all the Companies are in time with generally accepted accounting principles in India. ^

b. The financial statements of the holding company and its subsidiaries have been consolidated by eliminating in full the intragroup balances and intragroup transactions including sales and expenses. The unrealised profits resulting from intragroup transactions that are included in the carrying amount of fixed assets, inventory are also eliminated in full and assets are shown net of unrealised profits.

(C) CONSOLIDATION OF FOREIGN SUBSIDIARY

Foreign Subsidiary accounts viz. Sat Middle East Ltd. have been audited by local auditor by adopting international GAAP for the year ended as on 31-12-08. For the purpose of consolidation, the accounts have been prepared by the management as on 31-03-2009 covering 12 months of year, on the basis of audited balance sheet as at 31-12-08 and making adjustments therein for three month period i.e. 1st January, 2009 to 31st March, 2009 which are unaudited figures. Financial statements figures are converted into rupees on the basis of closing rate of foreign currency as on 31-03-2009.

(D) CONSOLIDATION OF FOREIGN BRANCH

a. The holding companys foreign branch situated at U.A.E. is audited by the local auditor for the financial year ended on 31st December, 2008. Foreign branchs financial statement for the quarter ended 31st March, 2009 are certified by the management and the same have relied upon by auditors.

b. During the current year, there is a change in the accounting policy of the holding companys incorporating the accounts of foreign branch in the books of accounts which were previously considered as integral operations is now considered as non-integral operations.

(E) OTHER SIGNIFICANT ACCOUNTING POLICIES

Most of the accounting policies of the holding Company and that of the subsidiaries (except depreciation in the subsidiary companies) are similar, except the inventory valuation which is as under :

Sat Middle East Limited : Weighted Average Method

Sat Industries Limited : FIFO Method

Sat Realty Limited : NA

Sat E-Com Limited : NA

Sah Polymers Limited : FIFO Method

(F) i) The difference between the cost of investment in the subsidiaries over the net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statement as goodwill or capital reserve as the case may be.

ii) The holding company has during the year changed the accounting policy of incorporating the accounts of foreign branch in the books of accounts which were previously considered as integral operations is now considered as non-integral operations. Due to this change in accounting policy, the amount of Rs.6843438/ - is credited to Foreign Currency Translation Reserve instead of crediting to Profit & Loss Account.

iii) In case of foreign subsidiary, "Sat Middle East Limited" and the foreign branch of the holding company the operations are non-integral and their financial statements are converted in Indian Rupees at the following exchange rates :

a) Revenue and Expenses : Exchange rate prevailing at the end of the year which is near to the average rate of the year.

b) Current Assets & Current Liabilities : Exchange rate prevailing at the end of the- year.

c) Fixed Assets Exchange rate prevailing at the end of the year.

d) The foreign currency translation reserve adjustment of Rs.2,34,08,591 represents difference of opening net assets at closing rate and adjusted in consolidated profit and loss appropriation account subject to further reconciliation pending.

(G) Amortisation: Intangible assets are written off over a period of five years.

(H) Minority interests share of net profit of consolidated subsidiary for the year is identified and adjusted against the income in order to arrive at the net income attributable to shareholders of the Company.

(I) Minority interests share of net profit of consolidated subsidiaries for the year is identified and presented in the consolidated balance sheet separate from liabilities and the equity of the Companys Shareholders.

 
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