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Accounting Policies of SPS International Ltd. Company

Mar 31, 2014

1. BASIS OF ACCOUNTING

The Financial statement have been prepared under the historical cost convention, on a going concern basis and in accordance with the generally accepted accounting principles and the provisions of companies Act, 1956, as adopted consistently by the company. The company generally follows mercantile system of accounting and recognizes significant items of Income and expenditure on accrual basis.

2 USE OF ESTIMATES

In preparing the Company''s financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period, actual results could differ from those estimates.

A) REVENUE RECOGNITION

a) Sales are net of sales tax. Revenue from sales is recognized at the point of dispatch to the customers when risk and reward stands transferred to the customers

b) Services are net of service tax. Revenue from services is recognized when services are rendered and related costs are incurred.

c) Interest income is recognized on time proportion basis

B) FIXED ASSETS

a) Fixed Assets are stated at cost less accumulated depreciation . The cost of asset comprised of purchase price and directly attributable cost of bringing the asset to working condition for its intended use

b) Capital work in progress includes cost of assets at sites, construction expenditure, advances made for acquisition of capital assets and interest on the funds deployed

c) Estimated amount of contracts remaining to be executed exceeding rupees one lakh in each case are disclosed in the notes to accounts.

C) DEPRECIATION

The Depreciation has been provided as per the rates prescribed under Schedule XIV to the Companies Act 1956 as amended to date on written down value method and on pro-rata basis

D) BORROWING COST

Borrowing cost attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost till the assets is ready for use. Other borrowing costs are recognized as expense in the period in which these are incurred

E)

IMPAIRMENT OF ASSETS

An Asset is Impaired if there is sufficient indication that the carrying cost would exceed the recoverable cash generating asset. In that event an impairment loss so computed would be recognised in the accounts in the relevant year.

F) INVENTORIES

The company has adopted the policy to evaluate its stock-in-trade and other stores and spares at cost (FIFO).

Stock of Finished Goods

At Cost or Market Value whichever is lower ( FIFO)

Stock of Raw Material

At Cost or Market Value whichever is lower ( FIFO)

Stock of Work in Progress

At Cost or Market Value whichever is lower ( FIFO)

Stock of Scrap At Cost or Market Value whichever is lower ( FIFO)

G) FOREIGN CURRENCY TRANSACTIONS:

a) Foreign currency transactions are recorded at the exchange rate prevailing on the

date of transaction

b) Monetary items denominated in foreign currencies (such as cash, receivables,

payables etc.) outstanding at the year end, are translated at exchange rates

applicable on that date.

c) Non-monetary items denominated in foreign currency, (such as fixed assets) are valued at the exchange rate prevailing on the date of transaction

d) Any gains or losses arising due to exchange differences arising on translation or settlement are accounted for in the Profit and Loss account.

H) TAXES ON INCOME

Provision is made for deferred tax for all timing differences arising between taxable income and accounting income at currently enacted or substantially enacted tax rates.Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act. 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow ''to the Company.

Deferred tax assets are recognized, only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

I) EMPLOYEE BENEFITS

Contribution payable to an approved gratuity fund, a defined benefit plan, determined by an independent actuary at the balance sheet date and contributions payable to the recognized provident fund, which is defined contribution scheme are charged to the profit and Loss account of the year. Provision for Leave encashment cost is made on the basis of actuarial valuation at the balance sheet date, carried out by an independent actuary

J) CASH FLOW STATEMENT

Cash Flow are reported using the indirect method,whereby a profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating , financing and investing activities of the company are segregated.

SEGMENT REPORTING

The Company identifies primary segments based on the Geographical Area.The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.''

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions.

L) EARNING PER SHARE (EPS)

The earning considered in ascertaining the Company''s EPS comprises the net profit after tax. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year

M) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSTES

Provisions involving substantial degree of estimation in measurment are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainity, are treated as contingent, and disclosed by way of notes to the accounts. Contingent assets are neither recognised nor disclosed in Finanacial statements.

N) GRATUITY:

The Company has been providing for the Gratuity to the extent it is accrued at the end of financial year. However such Gratuity is paid when it becomes actually due.

Contingent liabilities are not provided for in the accounts and shown separately in notes to accounts.

O) BONUS

Provision for bonus is made according to the provisions of bonus act, 1965.

P) SERVICE TAX INPUT CREDIT

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilising the credits.


Mar 31, 2012

A) REVENUE RECOGNITION

a) Sales are net of sales tax. Revenue from sales is recognized at the point of dispatch to the customers when risk and reward stands transferred to the customers

b) Services are net of service tax. Revenue from services is recognized when services are rendered and related costs are incurred.

c) Interest income is recognized on time proportion basis

B) FIXED ASSETS

a. Fixed Assets are stated at cost less accumulated depreciation . The cost of asset comprised of purchase price and directly attributable cost of bringing the asset to working condition for its intended use.

b. Capital work in progress includes cost of assets at sites, construction expenditure, advances made for acquisition of capital assets and interest on the funds deployed

c. Estimated amount of contracts remaining to be executed exceeding rupees one lakh in each case are disclosed in the notes to accounts.

C) DEPRECIATION

The Depreciation has been provided as per the rates prescribed under Schedule XIV to the Companies Act 1956 as amended to date on written down value method and on pro-rata basis

D) BORROWING COST

Borrowing cost attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost till the " assets is ready for use. Other borrowing costs are recognized as expense in the period in which these are incurred

E) IMPAIRMENT OF ASSETS

An Asset is Impaired if there is sufficient indication that the carrying cost would exceed the recoverable cash generating asset. In that event an impairment loss so computed would be recognised in the accounts in the relevant year.

F) INVENTORIES

The company has adopted the policy to evaluate its stock-in-trade and other stores and spares at cost (FIFO)

Stock of Finished Goods At Cost or Market Value whichever is lower (FIFO)

Stock of Raw Material At Cost or Market Value whichever is lower (FIFO)

Stock of Work in Progress At Cost or Market Value whichever is lower ( FIFO)

Stock of Scrap At Cost or Market Value whichever is lower ( FIFO)

G) FOREIGN CURRENCY TRANSACTIONS:

a) Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction

b) Monetary items denominated in foreign currencies (such as cash, receivables, payables etc.) outstanding at the year end, are translated at exchange rates applicable on that date.

c) Non-monetary items denominated in foreign currency, (such as fixed assets) are valued at the exchange rate prevailing on the date of transaction

d) Any gains or losses arising due to exchange differences arising on translation or settlement are accounted for in the Profit and Loss account.

H) TAXES ON INCOME

Provision is made for deferred tax for all timing differences arising between taxable income and accounting income at currently enacted or substantially enacted tax rates

Deferred tax assets are recognized, only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

I). EMPLOYEE BENEFITS ,..

Contribution payable to an approved gratuity fund, a defined benefit plan, determined by an independent actuary at the balance sheet date and contributions payable to the recognized provident fund, which is defined contribution scheme are charged to the profit and Loss account of the year. Provision for Leave encashment cost is made on the basis of actuarial valuation at the balance sheet date, carried out by an independent actuary.

J) CASH FLOW STATEMENT

Cash Flow are reported using the indirect method .whereby a profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating , financing and investing activities of the company are segregated.

K) EARNING PER SHARE (EPS)

The earning considered in ascertaining the Company's EPS comprises the net profit after tax. The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year.

L) AMORTIZATION OF PRELIMINARY EXPENSES, PUBLIC ISSUE EXPENSE AND OTHER CAPITALISED EXPENSES

* The company has been writing off 1/1 Oth of the preliminary expenses, public issue expenses and other expenses capitalized every year.

M AMORTIZATION OF DEVELOPMENT EXPENSES

The company has been writing off 1/1 Oth of the expenditure capitalized and incurred upon travelling and marketing of new products every year

N) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSTES

provisions involving substantial degree of estimation in measurment are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainity, are treated as contingent, and disclosed by way of notes to the accounts. Contingent assets are neither recognised nor disclosed in Finanacial statements

J GRATUITY:

The Company has been providing for the Gratuity to the extent it is accrued at the end of financial year. However such Gratuity is paid when it becomes actually due. Contingent liabilities are not provided for in the accounts and shown separately in notes to accounts

P) BONUS

Provision for bonus is made according to the provisions of bonus act, 1965.'


Mar 31, 2010

The Financial statements are prepared under historical cost convention, on a going concern basis and in accordance with the applicable accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards and relevant provisions of the Companies Act, 1956.

1. FIXED ASSETS:

a. Fixed assets are stated at cost less accumulate Depreciation. The cost of assets Comprises of purchase price and directly attributable cost of bringing the assets to working condition for its intended use.

b. Capital work in progress includes cost of assets at sites, construction expenditure, advances made for acquisition of capital assets and interest on the funds deployed.

c Estimated amount of contracts remaining to be executed exceeding rupees one lakh in each case are

disclosed in the notes to accounts.

2. DEPRECIATION:

The Depreciation has been provided as per the rates prescribed under Schedule XIV to the Companies Act 1956 as amended to date on written down value method and on pro-rata basis.

3. INVENTORIES:

The company has adopted the policy to evaluate its stock-in-trade and other stores and spares at cost (FIFO).

4. SALE/REVENUE RECOGNITION:

a Salesarenet of sales tax. Revenue from sales is recognized at the point of dispatch to the customers

when risk and reward stands transferred to the customers. b Services are net of service tax. Revenue from services is recognized when services are rendered and

related costs are incurred. c Interest income is recognized on time proportion basis.

5. FOREIGN CURRENCY TRANSACTIONS:

a Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

b Monetary items denominated in foreign currencies ( such as cash, receivables, payables etc.)

outstanding at the year end, are translated at exchange rates applicable on that date.

c Non-monetary items denominated in foreign currency, (such as fixed assets) are valued at the

exchange rate prevailing on the date of transaction.

d Any gains or losses arising due to exchange differences arising on translation or settlement are

accounted for in the Profit and Loss account.

6. BORROWING COSTS:

Borrowing cost attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost till the assets is ready for use. Other borrowing costs are recognized as expense in the period in which these are incurred.

7 TAXES ON INCOME:

Provision is made for deferred tax for all timing differences arising between taxable income and accounting income at currently enacted or substantially enacted tax rates.

Deferred tax assets are recognized, only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

8. EMPLOYEE BENEFITS:

Contribution payable to an approved gratuity fund, a defined benefit plan, determined by an independent actuary at the balance sheet date and contribution? payable to the recognized provident fund, which is defined contribution scheme are charged to the profit and Loss account of the year. Provision for Leave encasement cost is made on the basis of actuarial valuation at the balance sheet date, carried out by an independent actuary.

9. AMORTIZATION OF . PRELIMINARY EXPENSES, PUBLIC ISSUE EXPENSES AND OTHER CAPITALISED EXPENSES:

The company has been writing off l/10th of the preliminary expenses, public issue expenses and other expenses capitalized every year.

10. AMORTIZATION OF DEVELOPMENT EXPENSES:

The company has been writing off l/10th of the expenditure capitalized and incurred upon travelling and marketing of new products every year.

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