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Accounting Policies of Vapi Enterprise Ltd. Company

Mar 31, 2014

A. Historical Cost Basis:

The financial statements have been prepared and presented under the historical cost (except for free hold land) convention on accrual basis of accounting in accordance with the accounting principles generally accepted in India and in compliance with provisions of the Companies Act, 1956 and comply with the mandatory Accounting Standards (AS) specified in the Companies (Accounting Standard) Rules, 2006, prescribed by the Central Government. The accounting policies have been consistently applied by the company.

B. Use of Estimates:

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting year, the reported amounts of assets and liabilities and the disclosures of contingent liabilities as on the date of the financial statements. Examples of such estimates include useful life of Fixed Assets, provision for doubtful debts/ advances, deferred tax, etc. Actual results could differ from those estimates. Such difference is recognized in the year/s in which the results are known / materialized.

C. Revenue Recognisation:

a. Revenue from services is recognized as and when services are rendered as per terms of contract.

b. Dividend income is recognized based on establishment of the right to receive such income.

D. Fixed Assets:

a. Fixed Assets are stated at cost and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any.

b. ''Cost'' for the purpose of valuing fixed assets and capital work in progress comprises of its purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

E. Depreciation, Amortization and depletion:

a) Depreciation on fixed assets has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under :

i) As per straight line method on plant and machineries.

ii) As per written down value method on all other assets.

b) Depreciation on additions/sale of assets during the year has been provided on pro-rata basis.

F. Impairment of Assets:

a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of Company''s fixed assets. If any indication exists an assets recoverable amount is estimated, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

b) Reversal of impairment loss recognised in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

G. Investments:

Long-term investments are valued at cost less provision for diminution in the value other than temporary, if any.

H. Inventories :

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. Inventory of stored and spares are valued at cost. For this purpose cost is arrived at on the First in First out basis.

I. Foreign Currency Transactions:

Foreign Currency Transactions are recorded on the basis of the exchange rate prevailing on the date of transaction.

a) Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

b) Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date. Profit/ loss on translation thereon is credited or charged to the Profit and Loss Account.

J. Employees Benefits:

The company accounts for leave encashment benefits, bonus and gratuity on declaration.

K. Borrowing Cost :

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

L. Taxation:

a) Tax expense comprise of current and deferred taxes.

b) Current income is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act.

c) Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized.

d) Deferred tax assets/liabilities are reviewed as at each balance sheet date based on developments during the period and available case law to re-assess realization/ liabilities.

M. Provisions, Contingent Liabilities and Contingent Assets:

a) A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote. Contingent liabilities are not recognized but are disclosed in the notes.

b) Contingent Assets are neither recognized nor disclosed in the financial statements.

c) A provision is recognized when there is present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions contingent asset and contingent liabilities are reviewed at each balance sheet date.

N. General:

Accounting Policies not specifically referred to are consistent with generally accepted accounting practice.

O. Leases: As a Lessee

Leases on which significant portion of the risks and rewards of ownership are effectively retained by the lessor, are classified as operating leases. Operating leases payments are charged to the Statement Profit and Loss on a straight- line basis over the lease term.

Leases: As a Lessor

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognized as an expense in Statement of Profit and Loss in period in which they are incurred.

(d) The Rights, Preferences, Restriction including restriction on the distribution of dividend and repayments of capital:

i) The Company is having only one class of equity shares referred to as equity shares having a par value of Rs.10. Each holder of equity shares is entitled to one vote per share held.

ii) Dividends, if any, is declared and paid in Indian rupees. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

However, in view of the accumulated losses, no dividend is / was declared on the equity shares for the year ended March 31, 2014.

iii) In the event of liquidation of the Company, the equity share holder will be entitled to receive remaining assets of the Company after the distribution / repayments of all creditors. The distribution to the share holder will be in proportion of the number of shares held by each share holder.

iv) The company declares and pays dividend in Indian Rupees.The companies Act, 1956 provides that any dividend be declared out of accumulated distributed profits only after transfer to general reserve of a special percentage of net profit computed in accordance with current regulations.

(e) Details of shares held by shareholders holding more than 5% of the agregate shares in the Company:

There are no shareholders holding more than 5% of the aggregate shares in the company


Mar 31, 2013

A. Historical Cost Basis:

The financial statements have been prepared and presented under the historical cost (except for free hold land) convention on accrual basis of accounting in accordance with the accounting principles generally accepted in India and in compliance with provisions of the Companies Act, 1956 and comply with the mandatory Accounting Standards (AS) specified in the Companies (Accounting Standard) Rules, 2006, prescribed by the Central Government. The accounting policies have been consistently applied by the company.

B. Use of Estimates :

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting year, the reported amounts of assets and liabilities and the disclosures of contingent liabilities as on the date of the financial statements. Examples of such estimates include useful life of Fixed Assets, provision for doubtful debts/ advances, deferred tax, etc. Actual results could differ from those estimates. Such difference is recognized in the year/s in which the results are known / materialized.

C. Revenue Recognisation :

a) Revenue from services is recognized as and when services are rendered as per terms of contract.

b) Dividend income is recognized based on establishment of the right to receive such income.

D. Fixed Assets:

a) Fixed Assets are stated at cost and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any.

b) ''Cost'' for the purpose of valuing fixed assets and capital work in progress comprises of its purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

E. Depreciation/Amortization :

a) Depreciation on fixed assets has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under :

i) As per straight line method on plant and machineries.

ii) As per written down value method on all other assets.

b) Depreciation on additions/sale of assets during the year has been provided on pro-rata basis.

F. Impairment of Assets:

a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of Company''s fixed assets. If any indication exists an assets recoverable amount is estimated, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

b) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

G. Investments:

Long term investments are valued at cost less provision for diminution in value, other than temporary, if any.

H. Inventories :

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. Inventory of stored and spares are valued at cost. For this purpose cost is arrived at on the First in First out basis.

I. Foreign Currency Transactions:

Foreign Currency Transactions are recorded on the basis of the exchange rate prevailing on the date of transaction.

a) Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

b) Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date. Profit/ loss on translation thereon is credited or charged to the Profit and Loss Account.

J. Employees Benefits:

The company accounts for leave encashment benefits, bonus and gratuity on declaration.

K. Borrowing Cost :

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

L. Taxation :

a) Tax expense comprise of current and deferred taxes.

b) Current income is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act.

c) Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized.

d) Deferred tax assets/liabilities are reviewed as at each balance sheet date based on developments during the period and available case law to re-assess realization/ liabilities.

M. Provisions, Contingent Liabilities and Contingent Assets:

a) A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote. Contingent liabilities are not recognized but are disclosed in the notes.

b) Contingent Assets are neither recognized nor disclosed in the financial statements.

c) A provision is recognized when there is present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions contingent asset and contingent liabilities are reviewed at each balance sheet date.

N. General:

Accounting Policies not specifically referred to are consistent with generally accepted accounting practice.

O. Leases: As a Lessee

Leases on which significant portion of the risks and rewards of ownership are effectively retained by the lessor, classified as operating leases. Operating leases payments are charged to the Statement Profit and Loss on a straight- line basis over the lease term.

Leases: As a Lesser

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognized as an expense in Statement of Profit and Loss in period in which they are incurred.


Mar 31, 2012

A) Historical Cost Basis:

The financial statements are prepared under the historical cost convention and in accordance with applicable mandatory accounting standards and relevant presentation requirements of the Companies Act, 1956.

b) Use of Elements :

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

c) Revenue Recognisation :

All income and expenses are recognised and accounted on accrual basis, except interest on loans which is accounted on cash basis as there is uncertainty of realization.

d) Fixed Assets and Depreciation :

a) Fixed Assets include all expenditure of capital nature and are stated at cost less depreciation.

b) Depreciation on fixed assets has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under:

i) As per straight line method on plant and machineries.

ii) As per written down value method on all other assets.

c) Depreciation on additions/sale of assets during the year has been provided on pro-rata basis.

e) Impairment of Fixed Assets:

a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of company's fixed assets. If any indication exists an assets recoverable amount is estimated, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

b) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

f) Investments:

Investments are of long-term nature and are valued at acquisition cost.

g) Inventories:

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. For this purpose cost is arrived at on the First in First out basis.

h) Foreign Currency Transactions :

Foreign Currency Transactions are recorded by applying the exchange rate prevailing on the date of payment.

a) Transactions in foreign currencies are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date and profit/ loss on translation thereon is credited or charged to the Profit and Loss account.

i) Sales:

Sales comprise of sales of manufactured and trading goods and are inclusive of excise duty but it excludes sales tax and other charges received.

j) Employees Benefits:

The company accounts for leave encashment benefits, bonus and gratuity on declaration.

k) Borrowing Cost:

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

l) Taxes on Income :

a) Tax expense comprise of current and deferred taxes.

b) Current income tax and fringe benefit tax is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act.

c) Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized.

m) 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 even 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.

A provision is recognized when there is present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure ts made.

n) General:

Accounting Policies not specifically referred to are consistent with generally accepted accounting practice.

o) Leases: As a Lessee

Leases on which significant portion of the risks and rewards of ownership are effectively retained by the lessor, are classified as operating leases. Operating leases payments are charged to the Statement Profit and Loss on a straight-line basis over the lease term.

Leases: As a Lessor

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognized as an expense in Statement of Profit and Loss in period in which they are incurred.


Mar 31, 2010

1. Historical Cost Basis:

The financial statements are prepared under the historical cost convention and in accordance with applicable mandatory accounting standards and relevant presentation requirements of the Companies Act, 1956.

2. Use of Elements :

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

3. Revenue Recognisation:

All income and expenses are recognised and accounted on accrual basis, except interest on loans which is accounted on cash basis as there is uncertainty of realization.

4. Fixed Assets and Depreciation :

a) Fixed Assets include all expenditure of capital nature and are stated at cost less depreciation.

b) Depreciation on fixed assets has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under :

i) as per straight line method on plant and machineries.

ii) as per written down value method on all other assets.

c) Depreciation on additions/sale of assets during the year has been provided on pro-rata basis.

5. Impairment of Fixed Assets:

a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of Companys fixed assets. If any indication exists an assets recoverable amount is estimated, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

b) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

6. Investments:

Investments are of long-term nature and are valued at acquisition cost.

7. Inventories :

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. For this purpose cost is arrived at on the First in First out basis.

8. Foreign Currency Transactions :

Foreign Currency Transactions in respect of import of Raw Materials are recorded by applying the exchange rate prevailing on the date of payment.

a) Transactions in foreign currencies are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date and profit/ loss on translation thereon is credited or charged to the Profit and Loss account.

9. Sales:

Sales comprise of sales of manufactured and trading goods and are inclusive of excise duty but it excludes sales tax and other charges received.

10. Employees Benefits:

Companys contributions to Provident Fund and Family Pension Scheme are charged to Profit & Loss Account on accrual basis.

a) The company does not offer leave encashment benefits. Bonus is accounted on declaration.

b) The liability on account of Gratuity is accounted on the basis of actuarys certificate.

c) The companys contribution to Provident Fund and ESIC are charged to Profit & Loss account.

11. Borrowing Cost:

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

12. Taxes on Income :

a) Tax expense comprise of current and deferred taxes.

b) Current income tax and fringe benefit tax is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act.

c) Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized.

13. 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 event 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.

A provision is recognized when there is present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

A disclosure for a contingent liability is.made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

14. General:

Accounting Policies not specifically referred to are consistent with generally accepted accounting practice.

15. Earning per share

The basic earning per share is computed by dividing the net profit/(loss) attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period.

16. Leases:

Assets taken various residential premises for workers on leave and license basis, under which all the risks and rewards of ownership are effectively retained by the lessor, are classified as operating leases. Operating leases payments are recognized as expense in the Profit and Loss Account on a straight- line basis over the lease term

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