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Accounting Policies of Veejay Lakshmi Engineering Works Ltd. Company

Mar 31, 2015

A. system of accounting: The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

B. Use of estimates: The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

C. Recognition of Income and Expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

D. fixed assets/Borrowing costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit /TED and VAT, if any, to the extent it could be adjusted against the Excise Duty/VAT liability of the Company. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

E. Depreciation: Depreciation on Fixed Assets has been provided on useful life of the assets in accordance with Schedule II of the Companies Act, 2013. Depreciable value of assets not having useful life as at 01-04-2014 has been adjusted in retained earnings.

F. taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. In accordance with AS 22, the deferred tax for timing differences between the book and tax Profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

G. Employee Benefits: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

H. foreign exchange transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes. The Company has no foreign operations.

I. Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

J. investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

K. 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. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

L. Earning Per share: Basic Earning per share is calculated by dividing the net Profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

M. Cash flow Statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

N. Segment Reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into three segments – Engineering, Textiles and Windmills. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. Self Consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.


Mar 31, 2014

A. System of Accounting: The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

B. Use of Estimates: The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

C. Recognition of Income and Expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

D. Fixed Assets/Borrowing Costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

E. Depreciation: Depreciation has been provided on straight- line method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. Wind Turbines have been classified as continuous process plant and depreciated accordingly as has been done in the past.

F. Taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book profit tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

G. Employee Benefits: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

H. Foreign Exchange Transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes.

I. Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

J. Investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

K. 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. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

L. Earning Per Share: Basic Earning per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

M. Cash flow Statement: Cash flows are prepared under the "indirect method". Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

N. Segment Reporting: Business segments are identified based on the nature of products and services. For reporting, the business has been split into two segments - one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.


Mar 31, 2013

A. System of Accounting: The Financial Statements are prepared under the historical cost convention, and on accrual basis in accordance with the applicable accounting standards.

B. Use of estimates: The preparation of the fnancial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the fnancial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

C. Recognition of Income and Expenditure: Revenue from sale transaction is recognized as and when the property in the goods is sold/transferred to the buyer for a defnite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

d. fixed assets/Borrowing costs: Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fxed assets is capitalized in accordance with AS 16.

E. Depreciation: Depreciation has been provided on straight-line Method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. Wind Turbines have been classifed as continuous process plant and depreciated accordingly as has been done in the past.

f. taxation: Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book proft tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profts for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

G. inventory Valuation

1) Raw Material At weighted average cost

2) Components and Stock of Stores At weighted average cost

3) Finished Goods At cost or net realisable value whichever is lower

(inclusive of Excise Duty)

4) Work-in-Progress At estimated cost

5) Scrap/Waste At estimated Cost or net realisable value whichever is

lower (inclusive of Excise Duty, wherever applicable).

H. Employee Benefts: The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

I. Foreign Exchange Transactions: The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fuctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Proft and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes.

J. impairment of assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fxed assets of the Company will not be lower than the book value of the fxed assets. Hence no provision has been made for impairment.

K. investments: Investments are shown at cost. Investment fuctuation reserve has been created for the diminution in value of quoted investments.

L. 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 outfow of resources. Contingent liabilities are not recognized but are disclosed in the notes to fnancial statements. Contingent assets are neither recognized nor disclosed in the fnancial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to refect the current best estimates.

M. earning Per share: Basic Earning per share is calculated by dividing the net proft or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

N. Cash fow Statement: Cash fows are prepared under "indirect method." Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

o. segment reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into two segments – one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.


Mar 31, 2011

(A) System of Accounting : The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

(B) Use of Estimates : The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

(C) Recognition of Income and Expenditure : Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

(D) Fixed Assets / Borrowing Costs : Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

(E) Depreciation : Depreciation has been provided on straight- line Method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956. All buildings have been depreciated at the rate 3.34%. Accessories/power control units, wherever they are attached to the machines, have been depreciated at the same rate applicable for machinery. All electrical equipments including fans, air circulators and air conditioners have been depreciated at the rate of 7.07%. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. Wind Turbines have been classified as continuous process plant and depreciated accordingly as has been done in the past. For assets of value less than Rs. 5,000/- acquired during the year, 100% depreciation has been provided.

(F) Taxation : Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book profit tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

(G) Inventory Valuation :

1) Raw Material: At weighted average cost

2) Components and Stock of Stores At weighted average cost

3) Finished Goods At cost or net realisable value whichever is lower (inclusive of Excise Duty)

4) Work - in Progress At estimated cost

5) ScrapAA/aste At estimated Cost or net realisable value whichever is lower (inclusive of Excise Duty, wherever Applicable).

(H) Employee Benefits : The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

(I) Foreign Exchange Transactions : The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered (or speculative purposes.

(J) Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

(K) investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

(L) 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 he an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(M) Earning Per Share: Basic Earning per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

(N) Cash flow Statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

(O) Segment Reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into two segments - one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy. Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for inter Segment Revenue/Adjustments, as has been done in the past.


Mar 31, 2010

(A) System of Accounting : The Financial Statements are prepared under historical cost convention and on accrual basis in accordance with the applicable accounting standards.

(B) Use of Estimates : The preparation of the financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

(C) Recognition of Income and Expenditure : Revenue from sale transaction is recognized as and when the property in the goods is sold /transferred to the buyer for a definite consideration. Revenue from service transactions and other source is recognized on the completion of the contract. Dividends from investments, export incentive under Duty Drawback scheme are recognized when the right to receive payments/credit is established and there is no uncertainty regarding the amount of consideration or its collectability.

(D) Fixed Assets / Borrowing Costs : Fixed Assets are capitalized at cost inclusive of erection expenses and other incidental expenses in connection with the acquisition of the assets and net of Cenvat Credit and VAT, if any. The borrowing cost on the additions to fixed assets is capitalized in accordance with AS 16.

(E) Depreciation : Depreciation has been provided on straight- line Method in respect of all the assets in accordance with Schedule XIV of the Companies Act, 1956.

All buildings have been depreciated at the rate 3.34%. Accessories/power control units, wherever they are attached to the machines, have been depreciated at the same rate applicable for machinery. All electrical equipments including fans, air circulators and air conditioners have been depreciated at a rate of 7.07%. Extra shift depreciation has been provided for full year, even if the plant has run only for part of the year on extra shifts. Depreciation on additions during the year has been provided on pro-rata for the period for which the assets have been put to use. Wind Turbines have been classified as continuous process plant and depreciated accordingly as has been done in the past. For assets of value less than Rs. 5,000/- acquired during the year, 100% depreciation has been provided.

(F) Taxation : Provision for taxation is made as per estimated total income after considering various reliefs under the provisions of the Income-Tax Act, 1961. The book profit tax paid in accordance with Section 115JB, which is in excess of the normal tax due and which can be adjusted against tax liability for future periods, is treated as advance tax. In accordance with AS 22, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted as of the balance sheet date.

(G) Inventory Valuation :



1) Raw Material : At weighted average cost

2) Components and Stock of Stores At weighted average cost

3) Finished Goods At cost or net realisable value whichever is

lower (inclusive of Excise Duty)

4) Work - in Progress At estimated cost

5) Scrap/ Waste At estimated Cost or net realisable value

whichever is lower (inclusive of Excise Duty, wherever Applicable).

(H) Employee Benefits : The provision has been made as required under AS 15. Bonus has been provided as per practice followed in earlier years. For Gratuity, Leave encashment and accumulated compensated absences provision has been made based on the estimates provided by an actuary.

(I) Foreign Exchange Transactions : The transactions in respect of import of materials and export sales have been accounted for at the rates of exchange prevailing on the date of the transactions. However, in respect of transactions remaining unpaid/unrealized, exchange rates prevailing at the end of the year have been adopted. Difference arising out of fluctuation in the exchange for the above transaction has been taken to a separate account, which is debited/credited to the Profit and Loss Account. Wherever Forward Contracts have been entered, the premium or discount has been recognized over the period of the contract and the exchange differences on these contracts have been adjusted during the period in which the differences have taken place. All forward contracts have been entered only for import or export transactions of the Company and no contract has been entered for speculative purposes.

(J) Impairment of Assets: The carrying amount of the fixed assets is reviewed for provision for impairment as required under AS 28. In the opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence no provision has been made for impairment.

(K) Investments: Investments are shown at cost. Investment fluctuation reserve has been created for the diminution in value of quoted investments.

(L) 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. Contingent liabilities are not recognized but are disclosed in the notes to financial statements. Contingent assets are neither recognized nor disclosed in the financial statements. Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(M) Earning Per Share: Basic Earning per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

(N) Cash flow Statement: Cash flows are reported using the indirect method. Closing balances of cash includes cash and cash equivalents in hand and balances in bank in current accounts.

(O) Segment Reporting: Business segments are identified based on the nature of products and services. For reporting the business has been split into two segments - one representing Engineering activities manufacturing textile machinery and the other representing the generation of power by wind energy.

Power generated from windmills is wheeled through Electricity Board and adjusted against the consumption of power by the Company and the Subsidiary Company. The entire value of power generated is treated as sale to Electricity Board and included in the sales turnover. The adjustment to Subsidiary Company and self consumption is not considered for Inter Segment Revenue/Adjustments, as has been done in the past.

The products manufactured by the Company do not require any industrial license as per the current industrial policy and hence there is no restriction on the maximum capacity that the Company can produce. The installed capacity also varies depending on the level of subcontracting work and outsourcing of components. Hence the data on licensed and installed capacities has not been furnished.

 
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