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Accounting Policies of Vital Communications Ltd. Company

Mar 31, 2011

(1) Basis of Accounting

The accounts have been prepared on the basis of historical costs and in accordance with applicable accounting standards except where otherwise stated. The company has adopted accrual method of accounting

(2) Fixed Assets

I. Fixed Assets are stated at cost less depreciation. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use.

II. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs is charged to the Profit & Loss Account. When assets are sold or discarded, their cost and accumulated depreciation is removed from the accounts and any gain or loss, resulting from their disposal is included in the Profit & Loss Account.

III. Capital work-in-progress

Advances paid towards the acquisition of fixed assets, and the cost of assets not put to use before the year-end, are disclosed with the capital work-in- progress.

(3) Depreciation

Depreciation is provided using the Straight Line Method at the rates anb in the manner specified in Schedule XIV to the Companies Act, 1956 other than on Plant & Machinery and Digital Content. Depreciation on additions during the year is provided on a pro-rata basis from the date of addition. Plant & Machinery mainly consist of computers and peripherals and the rate of depreciation @ 20% has been applied and depreciation on Digital Content have been provided @ 17.5% keeping in view the useful life of the assets.

(4) Inventories

Inventories are valued at the lower of cost or estimated net realisable value.

(5) Revenue Recognition

(i) Sales are net of Tax, where applicable.

(ii) Expenses are net of recoveries where applicable.

(6) Foreign Currency Transaction

(i) Transactions in Foreign Currencies for Import of Material are converted at the rates prevailing on the date of transaction.

(ii) Current Assets realizable in Foreign Currency and Liabilities payable in Foreign Currency (other than for the Purchase of Fixed Assets) are not restated at the year end, however the exchange gain/loss arising out of the rates prevailing on the date of remittance is taken effected.

(iii) No liabilities incurred for the acquisition of Fixed Assets, the loss or gain arising on account of difference in exchange rate, as at the year end, is regarded as an adjustment of the cost of the relevant assets, and the same is included in the carrying amount of the related Fixed Assets.

(7) Research and Development

Research and Development expenses, of revenue nature, are charged to the Profit and Loss Account of the year in which they are incurred and those of capital nature are shown as addition to the respective fixed assets.

(8) Retirement Benefits

Provision for gratuity has been made as per the provisions of the Payment of Gratuity Act, 1972.

(9) Amortization of Miscellaneous Expenditure

Preliminary Expenses & Public Issue Expenses are written off over a period of ten years.


Mar 31, 2010

(1) Basis of Accounting

The accounts have been prepared on the basis of historical costs and in accordance with applicable accounting standards except where otherwise stated. The company has adopted accrual method of accounting.

(2) Fixed Assets

I. Fixed Assets are stated at cost less depreciation. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use.

II. Expenditure for additions, improvements and renewals are capitalised and expenditure for

maintenance and repairs is charged to the Profit & Loss Account. When assets are sold or discarded, their cost and accumulated depreciation is removed from the accounts and any gain or loss, resulting from their disposal is included in the Profit & Loss Account.

III. Capital work-in-progress

Advances paid towards the acquisition of fixed assets, and the cost of assets not put to use before the year-end, are disclosed with the capital work-in-progress.

(3) Depreciation

Depreciation is provided using the Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 other than on Plant & Machinery and Digital Content. Depreciation on additions during the year is provided on a pro-rata basis from the date of addition. Plant & Machinery mainly consist of computers and peripherals and the rate of depreciation @ 20% has been applied and depreciation on Digital Content have been provided @ 17.5% keeping in view the useful life of the assets.

(4) Inventories

Inventories are valued at the lower of cost or estimated net realisable value.

(5) Revenue Recognition

(i) Sales are net of Tax, where applicable.

(ii) Expenses are net of recoveries where applicable.

(6) Foreign Currency Transaction

(i) Transactions in Foreign Currencies for Import of Material are converted at the rates prevailing on the date of transaction.

(ii) Current Assets realizable in Foreign Currency and Liabilities payable in Foreign Currency (other than for the Purchase of Fixed Assets) are not restated at the year end, however the exchange gain/loss arising out of the rates prevailing on the date of remittance is taken effected.

(iii) No liabilities incurred for the acquisition of Fixed Assets, the loss or gain arising on account of difference in exchange rate, as at the year end, is regarded as an adjustment of the cost of the relevant assets, and the same is included in the carrying amount of the related Fixed Assets.

(7) Research and Development

Research and Development expenses, of revenue nature, are charged to the Profit and Loss Account of the year in which they are incurred and those of capital nature are shown as addition to the respective fixed assets.

(8) Retirement Benefits

Provision for gratuity has been made as per the provisions of the Payment of Gratuity Act, 1972.

(9) Amortization of Miscellaneous Expenditure

Preliminary Expenses & Public Issue Expenses are written off over a period of ten years.


Mar 31, 2009

(1) Basis of Accounting

The accounts have been prepared on the basis of historical costs and in accordance with applicable accounting standards except where otherwise stated. The company has adopted accrual method of accounting.

(2) Fixed Assets

I. Fixed Assets are stated at cost less depreciation. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use.

II. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs is charged to the Profit & Loss Account. When assets are sold or discarded, their cost and accumulated depreciation is removed from the accounts and any gain or loss, resulting from their disposal is included in the Profit & Loss Account.

III. Capital work-in-progress

Advances paid towards the acquisition of fixed assets, and the cost of assets not put to use before the year-end, are disclosed with the capital work-in-progress.

(3) Depreciation

Depreciation is provided using the Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956 other than on Plant & Machinery and Digital Content. Depreciation on additions during the year is provided on a pro-rata basis from the date of addition. Plant & Machinery mainly consist of computers and peripherals and the rate of depreciation @ 20% has been applied and depreciation on Digital Content have been provided @ 17.5% keeping in view the useful life of the assets.

(4) Inventories

Inventories are valued at the lower of cost or estimated net realisable value.

(5) Revenue Recognition

(i) Sales are net of Tax, where applicable.

(ii) Expenses are net of recoveries where applicable.

(6) Foreign Currency Transaction

(i) Transactions in Foreign Currencies for Import of Material are converted at the rates prevailing on the date of transaction.

(ii) Current Assets realizable in Foreign Currency and Liabilities payable in Foreign Currency (other than for the Purchase of Fixed Assets) are not restated at the year end, however the exchange gain/loss arising out of the rates prevailing on the date of remittance is taken effected.

(iii) No liabilities incurred for the acquisition of Fixed Assets, the loss or gain arising on account of difference in exchange rate, as at the year end, is regarded as an adjustment of the cost of the relevant assets, and the same is included in the carrying amount of the related Fixed Assets.

(7) Research and Development

Research and Development expenses, of revenue nature, are charged to the Profit and Loss Account of the year in which they are incurred and those of capital nature are shown as addition to the respective fixed assets.

(8) Retirement Benefits

Provision forgratuity has been made as perthe provisions of the Payment of Gratuity Act ,1972.

(9) Amortization of Miscellaneous Expenditure

Preliminary Expenses & Public Issue Expenses are written off over a period often years.

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