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Accounting Policies of Swadeshi Industries & Leasing Ltd. Company

Mar 31, 2015

1.1 Basis for preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention on accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles (GAAP) in India. GAAP includes Accounting Standards (AS) noticed by the Government of India under Section 133 of the Companies Act, 2013, provisions of the Companies Act, 2013, pronouncements of Institute of Chartered Accountants of India and guidelines issued by Securities and Exchange Board of India (SEBI). The Company has presented financial statements as per format prescribed by Revised Schedule III, notified under the Companies Act, 2013, issued by Ministry of Corporate Affairs. Except where otherwise stated, the accounting policies are consistently applied.

1.2 Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make assumptions, critical judgments and estimates, which it believes are reasonable under the circumstances that affect the reported amounts of assets, liabilities and contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which the results are known or materialize.

1.3 Investments

a) Long-term investments are stated at cost. Provision is made to recognize any diminution in value, other than that of a temporary nature.

b) Current investments are carried at lower of cost and fair value. Diminution in value is charged to the statement of profit and loss.

c) Current investments readily convertible in known amount of cash and subject to insignificant risk of changes in value are classified as cash and cash equivalents for preparation of cash flow statement.

1.4 Cash flow statement

The cash flow statement is prepared under the "Indirect Method" as set out in AS - 3 "Cash Flow Statements" issued by the Institute of Chartered Accountants of India.

1.5 Revenue recognition

(a) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of goods are transferred to the customer. Sales are net of discounts, sales tax, value added tax and estimated returns. Excise duties collected on sales are shown by way of deduction from sales.

(b) Provision for sales returns are estimated primarily on the basis of historical experience, market conditions and specific contractual terms and provided for in the year of sale as reduction from revenue. The methodology and assumptions used to estimate returns are monitored and adjusted regularly in line with contractual and legal obligations, trade practices, historical trends, past experience and projected market conditions.

(c) Income from services is recognized when the services are rendered or when contracted milestones have been achieved.

(d) Revenue from arrangements which includes performance of obligations is recognized in the period in which related performance obligations are completed.

(e) Export entitlements are recognized as income when right to receive credit as per the terms of the scheme is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

(f) Dividend income is recognized when the right to receive dividend is established.

(g) Interest income is recognized using the time-proportion method, based on rates implicit in the transaction.

(h) Revenue in respect of other income is recognized when a reasonable certainty as to its realization exists.

1.6 Finance costs

Finance costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds and exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

1.7 Cenvat credit

Cenvat (Central value added tax) credit in respect of excise, custom and service tax is accounted on accrual basis on purchase of eligible inputs, capital goods and services. The balance of cenvat credit is reviewed at the end of each year and amount estimated to be un-utilizable is charged to the statement of profit and loss for the year.

1.8 Stores and spares

Stores and spares (other than spares acquired with fixed assets) are charged to the statement of profit and loss as and when purchased.

1.9 Research and development

Revenue expenditure on research and development is expensed off under the respective head of expenses in the year in which it is incurred. Capital expenditure on research and development is reported as fixed assets under the relevant head.

Depreciation on research and development fixed assets is not classified as research and development expenses and instead included under depreciation expenses.

1.10 Leases

Lease rentals in respect of assets taken on operating lease are charged to the statement of profit and loss on accrual and on straight line basis over the lease term.

1.11 Accounting for taxes

(a) Current tax is accounted on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961.

(b) Deferred tax resulting from "timing differences" between accounting and taxable profit for the period has not been accounted.

1.12 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. Liabilities which are of contingent nature are not provided but are disclosed at their estimated amount in the notes forming part of the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2014

A. BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention and comply with the applicable accounting standards issued by the Institute of Chartered Accountants of India and the relevant provision of the Companies Act, 1956.

b. FIXED ASSETS AND DEPRECIATION

(i) Fixed assets are stated at cost of acquisition, including any attributable cost for bringing the assets to its working condition for its intended use, less accumulated depreciation as per the Companies Act 1956.

(ii) Depreciation is provided on the straight–line method over the useful life of the assets.

c. INVESTMENTS

Long term investments are stated at cost, Current investments are stated at lower of cost or fair market value.

d. INVENTORIES

Inventories are stated at the lower of cost or net realisable value. Cost is determined at the first in first out (FIFO) method (As per AS 2). The cost of finished goods and work in progress comprises raw material, direct labour, other direct costs and related production overheads, but excludes interest expenses.

e. TAXES ON INCOME

Provision for tax for the period comprises current income tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Current Income tax also includes interest payable if any under the provisions of Income tax Act, 1961.

f. PROVISIONING/WRITE OFF OF DOUBTFUL DEBTS, LOANS & ADVANCES.

Unrealizable Debts and Sundry balances of Loans & advances has been written-off to present true and fair view of the Company and as per the policy adopted by the Management of the company and to present on realistic basis the net realisable value of the assets of the company and to give a true and fair presentation to the stakeholders of the company.


Mar 31, 2011

A. Basis of Accounting

The financial statements are prepared under the historical cost convention and comply with the applicable accounting standards issued by the Institute of Chartered Accountants of India and the relevant provision of the Companies Act, 1956.

b. Fixed Assets and Depreciation

(i) Fixed assets are stated at cost of acquisition, including any attributable cost for bringing the assets to its working condition for its intended use, less accumulated depreciation as per the Companies Act 1956.

(ii) Depreciation is provided on the straight-line method over the useful life of the assets.

c. Investments

Long term investments are stated at cost, Current investments are stated at lower of cost or fair market value.

d. Inventories

Inventories are stated at the lower of cost or net realisable value. Cost is determined at the first in first out (FIFO) method (As per AS2). The cost of finished goods and work in progress comprises raw material, direct labour, other direct costs and related production overheads, but excludes interest expenses.

e. Revenue Recognition

Sales are recognised upon delivery of products and are recorded exclusive of excise duty but are net of trade discounts and sales tax.

f. Excise Duty

The excise duty in respect of closing inventory of finished goods is not included as part of inventory. The amount of CENVAT credits in respect of materials consumed for sales is deducted from cost of materials consumed. More over Excise duty exemption up to sales of Rs. 1.5 Crore is available to the company.

g. Taxes on Income

Provision for tax for the period comprises current income tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Current Income tax also includes interest payable if any under the provisions of Income tax Act, 1961

h. Provisioning/Write off of Doubtful Debts, Loans & Advances.

Unrealizable Debts and Sundry balances of Loans & advances has been written- off to present true and fair view of the Company and as per the policy adopted by the Management of the company and to present on realistic basis the net realisable value of the assets of the company and to give a true and fair presentation to the stakeholders of the company.


Mar 31, 2010

A. Basis of Accounting

The financial statements are prepared under the historical cost convention and comply with the applicabe accounting standards issued by the Institute of Chartered Accountants of India and the relevant provision of the Companies Act, 1956.

b. Fixed Assets and Depreciation

(i) Fixed assets are stated at cost of acquisition, including any attributable cost for bringing the assets to its working condition for its intended use, less accumulated depreciation as per the Companies Act 1956.

(ii) Depreciation is provided on the straight-line method over the useful life of the assets.

c. Investments

Long term investments are stated at cost, Current investments are stated at lower of cost or fair market value.

d. Inventories

Inventories are stated at the lower of cost or net realisable value. Cost is determined at the first in first out (FIFO) method (As per AS 2). The cost of finished goods and work in progress comprises raw material, direct labour, other direct costs and related production overheads, but excludes interest expenses.

e. Revenue Recognition

Sales are recognised upon delivery of products and are recorded exclusive of excise duty but are net of trade discounts and sales tax..

f. Excise Duty

The excise duty in respect of closing inventory of finished goods is not included as part of inventory. The amount of CENVAT credits in respect of materials consumed for sales is deducted from cost of materials consumed. More over Excise duty exemption up to sales of Rs. 1.5 Crore is available to the company.

g. Taxes on Income

Provision for tax for the period comprises current income tax determined to be payaDle in respect oi taxable income and deferred tax being the tax effect of timing differences representing the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Current Income tax also includes interest payable if any under the provisions of Income tax Act, 1961.

h. Provisioning/Writeoff of Doubtful Debts, Loans & Advances.

Unrealizable Debts and Sundry balances of Loans & advances has been written- off to present true and fair view of the Company and as per the policy adopted by the Management of the >company and to present on realistic basis the net realisable value of the assets of the company and to give a true and fair presentation to the stakeholders of the company.

 
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