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Accounting Policies of Varun Mercantile Ltd. Company

Mar 31, 2014

A. BASIS OF ACCOUNTING

These financial statements have been prepared to comply with the Accounting Principles Generally accepted in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standards) Rule,2006 and the relevant provisions of the Companies Act, 1956 .

B. Use of Estimates

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 recognised in the period in which the results are known/ materialized.

C. RECOGNITION OF INCOME & EXPENDITURE

The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis. Interest income is recognized on the time proportion basis taking into account the amount outstanding and rate applicable.

D. FIXED ASSETS

Fixed assets are stated at cost as reduced by depreciation .

E. DEPRECIATION:-

Depreciation on Fixed Assets was charged to the Profit & Loss Account in the manner prescribed in Schedule XIV read with Section 350 of the Companies Act, 1956 on the w.d.v. of fixed assets.

F. IMPAIRMENT OF ASSETS

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

G. INVESTMENTS

Long term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

H. PROVISION FOR CURRENT AND DEFFERED TAX

Provision for currant tax is made on the basis of the amount of tax payable on taxable income for the year in accordance with the Income-tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit wherever material, is accounted for using the tax rates and laws that have been enacted or substantially enacted as on balance sheet date. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward 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.

I. PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement 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. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2013

A. BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

B. Use of Estimates

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 recognised in the period in which the results are known/ materialized.

C. RECOGNITION OF INCOME & EXPENDITURE

The Company follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

D. FIXED ASSETS

Fixed assets are stated at cost as reduced by depreciation .

E. DEPRECIATION:-

Depreciation on Fixed Assess was charged to the Profit & Loss Account in the manner prescribed in Schedule XIV read with Section 350 of the Companies Act, 1956 on the w.d.v. of fixed assets.

F. IMPAIRMENT OF ASSETS

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

G. INVESTMENTS

Long term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

H. PROVISION FOR CURRENT AND DEFFERED TAX

Provision for currant tax is made on the basis of the amount of tax payable on taxable income for the year in accordance with the Income-tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit wherever material, is accounted for using the tax rates and laws that have been enacted or substantially enacted as on balance sheet date. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward 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.

I. PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement 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. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2010

The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principals and the provisions of the companies Act, 1956 as adopted consistently by the company.

(B) RECOGNITION OF INCOME & EXPENDITURE:

All items of income and expenditure having a material bearing on the financial statements are recognised on accrual basis.

(C) FIXED ASSETS.

Fixed assets are stated at cost as reduced by depreciation.

(D) DEPRECIATION:

Depreciation on Fixed Assets is charged to the Profit & Loss Account on written down value method, in the manner prescribed in Schedule XIV read with Section 350 of the Companies Act, 1956 on historical cost.

(E) IMPAIRMENT OF ASSETS:

An assets is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(F) VALUATION OF INVESTMENTS :

Long term investments are carried at cost, less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at lower of cost and fair value.

(G) ACCOUNITNG FOR TAX ON INCOME:

Provision for current ax is made on the basis of the amount of tax payable on taxable income for the year in accordance with the Income-tax Act, 1961. Deferred tax resulting from "timing differences" between book and taxable profit wherever material, is accounted for using the tax rates and laws that have been enacted or substantially enacted as on balance sheet date. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is reasonable certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized.

(H) PROVISION. 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 resource. Contingent liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

 
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