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Accounting Policies of Universal Autofoundry Ltd. Company

Mar 31, 2013


Universal Autofoundary Private Limited is a private limited company incorporated under Companied Act, 1956. The company is carrying out Manufacturing of C.l. Castings.

B Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous

C Use of Estimates

The preparation of financial statements are in conformity with Indian GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year.

D Inventories

Raw Material, Consumables & Packing Material are valued at Cost and WIP are valued at Estimated at the stage of completion. Cost of inventories comprises all costs of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Valuation of the inventories has been certified by the management.

E Fixed Assets

Fixed assets are carried on Cost less accumulated depreciation. The cost of fixed assets includes purchase price, non refundable taxes, duties, freight and other incidental expenses related to the acquisition or installation of respective assets. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the period during which such expenses are incurred. Gains or Losses arising from de- recognition of fixed assets are measured as the difference between net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.

F Depreciation and amortization

The Depreciation on fixed assets is provided using Written Down Value Method over the useful lives envisaged by the management, which are equivalent to the rates prescribed in the Schedule XIV of The Companies Act, 1956.

The premiliminary expenses have been written off over a period of 5 years as per section 35D of The Income Tax Act, 1961.

G Revenue Recognition

Sales and operating income includes sale of products, services, income from Job work services and export incentives etc. Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer. Excise Duty deducted from turnover (gross) are the amount that is included in the amount of turnover (gross) and not the entire amount of liability accruing during the year. The Company collects Sales Tax and VAT on behalf of Government and therefore, these are not economic benefits flowing to the Company. Hence, these are excluded from the revenue.

H Employee Benefits

Short Term benefits to employees have been charged as expense in the profit and loss account of the year in which respective services are rendered by the employee Provident fund contribution and ESI contribution by the employer and deduction made from the employees are remitted to respective departments of which funds are managed by Central Government. Employer's contribution is charged to the Profit and Loss account of the respective year.

I Earnings per share

Basic / Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) and after reducing the dividend obligation (including Dividend Distribution Tax) on Preference Shares by the weighted average number of equity shares outstanding during the year.

j Taxes on income

The tax expense is the aggregate of current year tax and deferred tax charged or credited to the Profit & Loss Statement for the year.

Current tax is the provision made for income tax liability on the profits for the year in accordance with the applicable tax laws.

Deferred tax is recognized on timing differences, being the differences resulting from the recognition of items in the financial statements.and in estimating its current income tax provisions.

Deferred tax liability is measured using the tax rates and the tax Saws that have been enacted or substantially enacted at the balance sheet date.

K Other Disclosures

All cither expenditures are accounted for on accrual basis.

Figures of the Previous Year have been rearranged where necessary and have been rounded of to the nearest rupee.

in the opinion of the Board of Directors of the Company the current assets and ioans & advances have a value on realization in the ordinary course of the business approximately the amount at which they are stated.

The balances of banks, sundry debtors, sundry creditors, deposits and advances and secured and unsecured loans are subject to confirmations/reconciliation from respective parties.