Accounting Policies of Balurghat Technologies Ltd. Company

Mar 31, 2015

A. Basis of Preparation of Financial Statement

The financial statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 2013.

B. Use of Estimates

The preparation of financial statements require 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. Own fixed Assets

Fixed Assets are stated at cost and includes amounts added on revaluation in certain cases determined in the year 1993.

D. Depreciation

Depreciation on fixed assets is provided on straight line method in the manner prescribed in Companies Act, 2013.

E. Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transactions.

F. Investments

Long Term Investments are stated at cost. However, in cases of quoted securities any changes of Market price are ignored considering the same to be temporary reversible in the long run.

G. Inventories

Items of inventories are measured at lower of cost and net realizable value, in conformity with AS-2. Cost of inventories comprises of cost of purchase.

H. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes Sale of goods, Services, Commission, Interest and Rent income. Sale of goods is recognized at the time of sale.

Service in relation to transportation business is recognized at the time of delivery of goods to the ultimate consignee. Commission in relation to Travel Division is recognized on the basis of ticket and package sold to the customer. The system has been changed from past years. In the past year Travel Division revenue has been shown on the basis of total turnover. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. Rent income is recognized on monthly basis as per Rent agreement.

I. Employees Benefits

The company follows an actuarial valuation annually for the Gratuity accrual to its employees, wherein the incremental value of the liability ascertained at the year end is provided in the books. However during the current year in view of only 10 continuing employees & appointment of few new employees the actuarial valuation was not considered to be necessary and a reasonable estimation was made in respect of the same, over the certified amount as at 31/03/2004.

Whereas in respect of the dues of the employees discharged under voluntary separation scheme, implemented in Kolkata and various other branches, dues if any on gratuity a/c has been considered as a current liability wherein there shall be on further accrual over and above balance as ascertained on 31/03/2003.

J. Provision for Current and Deferred Tax

Due to brought forward and unabsorbed depreciation of the previous years is so huge that the current year tax is nil but deferred tax liabilities is Rs 113500. But Provision for MAT tax is ascertained and the same is carried forward for future entitlement.

K. Provisions, Contingent Liabilities and Contingent Assets

The disputes and time barred obligations pending before the courts of law, has not been provided for in the books, since the Management is reasonably certain that such claims will not be sustained and are unlikely to have any further material implication on the financial conditions of the company. The estimated amount of such claims not acknowledged as debts aggregates to Rs. 25,80,000/- (Previous year 27, 10,000/-). In respect of the damages imposed upon by the Provident Fund authorities for certain delay in depositing the monthly contributions, currently under review, the company reasonably believes that genuine grounds for such lapses exists, considering which substantial relief will be extended in favour of the company and as such the incidence of the liability is not readily ascertainable and hence are considered to be of contingent nature.

N. Earnings in Foreign Exchange

There had been foreign exchange outgo of EURO 4539.68 equivalent to Rs. 373776/- and USD 26787.81 equivalent to Rs 1633011.44 during the financial year 2014-2015.

P. Managerial Remuneration

The Managing Director and the Executive Director are paid remuneration approved by the General Body of the company, within the limits prescribed under the Companies Act, 2013. None of them are paid any commission or whatsoever other than their contractual entitlement approved as above. The non – executive Directors waived the fees for every meeting attended by them. The following amounts were paid to the directors during the year under review:

Q. Segment Information

The Company has identified three reportable segments viz. Transportation Operations, Trading of Petroleum Products and Travel Division. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies for segment reporting are in line with the accounting policy of the Company.

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Mar 31, 2014

A. Basis of Preparation of Financial Statement

The financial statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

B. Use of Estimates

The preparation of financial statements require 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. Own fixed Assets

Fixed Assets are stated at cost and includes amounts added on revaluation in certain cases determined in the year 1993.

D. Depreciation

Depreciation on fixed assets is provided on straight line method in the manner prescribed in Schedule XIV to the Companies Act, 1956.

E. Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transactions.

F. Investments

Long Term Investments are stated at cost. However, in cases of quoted securities any changes of Market price are ignored considering the same to be temporary reversible in the long run.

G. Inventories

Items of inventories are measured at lower of cost and net realizable value, in conformity with AS-2. Cost of inventories comprises of cost of purchase.

H. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operation includes Sale of goods, Services, Commission, Interest and Rent income. Sale of goods is recognized at the time of sale.

Service in relation to transportation business is recognized at the time of delivery of goods to the ultimate consignee. Commission in relation to Travel Division is recognized on the basis of ticket and package sold to the customer. The system has been changed from past years. In the past year Travel Division revenue has been shown on the basis of total turnover. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. Rent income is recognized on monthly basis as per Rent agreement.

I. Employees Benefits

The company follows an actuarial valuation annually for the Gratuity accrual to its employees, wherein the incremental value of the liability ascertained at the year end is provided in the books. However during the current year in view of only 10 continuing employees & appointment of few new employees the actuarial valuation was not considered to be necessary and a reasonable estimation was made in respect of the same, over the certified amount as at 31/03/2004.

Whereas in respect of the dues of the employees discharged under voluntary separation scheme, implemented in Kolkata and various other branches, dues if any on gratuity a/c has been considered as a current liability wherein there shall be on further accrual over and above balance as ascertained on 31/03/2003.

J. Provision for Current and Deferred Tax

Due to brought forward and unabsorbed depreciation of the previous years is so huge that the current year tax and deferred tax are nil. But Provision for MAT tax is ascertained and the same is carried forward for future entitlement.

K. Provisions, Contingent Liabilities and Contingent Assets

The disputes and time barred obligations pending before the courts of law, has not been provided for in the books, since the Management is reasonably certain that such claims will not be sustained and are unlikely to have any further material implication on the financial conditions of the company. The estimated amount of such claims not acknowledged as debts aggregates to Rs. 25,80,000/- (Previous year 27, 10,000/-). In respect of the damages imposed upon by the Provident Fund authorities for certain delay in depositing the monthly contributions, currently under review, the company reasonably believes that genuine grounds for such lapses exists, considering which substantial relief will be extended in favour of the company and as such the incidence of the liability is not readily ascertainable and hence are considered to be of contingent nature.

N. Earnings in Foreign Exchange

There had been foreign exchange outgo of USD 6442.05 equivalent to Rs. 3,93,316 during the financial year 2013-2014.

P. Managerial Remuneration

The Managing Director and the Executive Director are paid remuneration approved by the General Body of the company, within the limits prescribed under Schedule XIII of the Companies Act, 1956. None of them are paid any commission or whatsoever other than their contractual entitlement approved as above. The non – executive Directors waived the fees for every meeting attended by them. The following amounts were paid to the directors during the year under review:

Q. Segment Information

The Company has identified three reportable segments viz. Transportation Operations, Trading of Petroleum Products and Travel Division. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The accounting policies for segment reporting are in line with the accounting policy of the Company.

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Mar 31, 2010

1) The accounting practices followed by the Company are consistent and in consonance with the Indian Generally Accepted Accounting Principles. The financial statements prepared are by and large are in accordance with the Accounting Standards referred to in the Sec. 211(3) (c) of the Companies Act, 1956.

2) FIXED ASSETS:-

(i)The fixed Assets are stated either at their cost or in certain cases as at their revalued amount determined in the year 1993.

3) INVESTMENT:-

The Investments being long term in nature are carried over at its cost of acquisition. However, in cases of quoted securities any changes of market price are ignored considering the same to be temporary and reversible in the long run.

4) INVENTORIES:-

The closing stock of the materials is valued at their cost of purchase, being lower than its realizable market value, in conformity with AS-2.

5) DEFERRED REVENUE EXPENDITURE:-

The Company had successfully discharged its entire surplus manpower primarily at Kolkata and at the various unproductive branches, through a scheme of Voluntary Separation which had been accepted by the employees concerned, following some initial resistance demonstrated by the Trade Unions. Since the benefit arising there from is expected to prevail over a period of time, the cost incurred had been amortized over a 5 year term, in conformity with the Income Tax regulations applicable, whereas 1/5th has been charged to the current year Profit & Loss a/c aggregating to Rs.2,92,993/- (Previous year Rs.5,85,986/-).

6) RETIREMENT BENEFITS:-

The Company follows an actuarial valuation annually for the Gratuity accrual to its employees, wherein the incremental value of the liability ascertained at the year end is provided in the books. However during the current year in view of only 10 continuing employees & appointment of few new employees the actuarial valuation was not considered to be necessary and a reasonable estimation was made in respect of the same, over the certified amount as at 31.03.04.

Whereas in respect of the dues of the employees discharged under Voluntary separation scheme, implemented in Kolkata and various other branches, dues if any on Gratuity A/c has been considered as a current liability wherein there shall be no further accrual over and above balance as ascertained on 31.03.03.

7) CONTIGENT LIABILITIES:-

(i) The disputed and time barred obligations pending before the Courts of Law, has not been provided for in the books, since the Management is reasonably certain that such claims will not be sustained and are unlikely to have any further material implication on the financial conditions of the Company. The estimated amount of such claims not acknowledged as Debts aggregates to Rs. 29,60,000/- (previous Year Rs. 38,40,000/-).

(ii) In respect of the damages imposed upon by the Provident Fund authorities for certain delay in depositing the monthly contributions, currently under review, the Company reasonably believes that genuine grounds for such lapses exists, considering which substantial relief will be extended in favour of the Company and as such the incidence of the liability is not readily ascertainable and hence are considered to be of contingent nature.

8) PROVISIONS & RESERVES:-

(i) Of the total amount of Sundry Debtors, a significant amount happens to be outstanding for more than 6 months. Of this segment balances not showing any movements despite the necessary steps for their recovery over 4 years are provided for as Reserve for Bad Debts in nature aggregating to Rs. 9,54,413/- (Previous year Rs. 34,35,480/-).

(ii) The Company is in default in respect of payment of ESI contributions pertaining to the period 2002-2003 aggregating to an amount of Rs. 2,68,058/- (previous year Rs. 2,68,058/-). The said amount was not provided earlier and upon issue of assessment Notice for the same in the current year, it has been provided in the books.

(iii) In respect of Provident Fund no contributions are outstanding.

9) MANAGERIAL REMUNERATION:-

14) FOREIGN CURRENCY TRANSACTION:- There are no earnings in Foreign Currency during the year ended 31.03.10