Accounting Policies of Envair Electrodyne Ltd. Company

Mar 31, 2015

1) SYSTEM OF ACCOUNTING :

The Company maintains its books of account on accrual basis.

2) METHOD OF ACCOUNTING :

a) For sales and services -

The sale of goods is recognised on despatch to customers, sales exclude amounts recovered towards excise duty and sales tax.

b) Export sales are accounted for in accordance with Accounting standard

11 . Exchange gain or loss on realisation of foreign exchange is included in exchange fluctuation account.

3) FOREIGN EXCHANGE TRANSACTIONS :

Transactions in foreign currencies during the year are converted at the rates prevailing on the transaction date. All current assets and current liabilities in foreign currency are revalued at the exchange rate prevailing as at the Balance Sheet date. All exchange differences arising from convesion are included in Profit & Loss Account.

4) FIXED ASSETS :

a. Tangible Assets :

Fixed Assets are capitalised at cost of acquisition or at manufacturing cost in case of company manufactured assets. Depreciation is charged on Straight Line Method on all assets in accordance with the useful life given in Schedule II of the Companies Act 2013.

b. Intangible Assets :

Intangible assets acquired in Financial year 2008-09 are amortised in 7 equal annual installments.

5) CURRENT ASSETS :

a. Balances of Sundry Debtors, Loans, Advances & Deposits given or taken &

& sundry creditors are subject to confirmations. Effect of any variation will be accounted in the year of such variation.

b. INVENTORY :

Inventories are valued at lower of the cost or estimated net realisable value after providing for cost of obsolescence. Cost of Raw Materials is arrived at on first in first out method to comply with the provisions of As2 Work in process and finished goods include cost of materials, direct labour and overheads.

6) INVESTMENTS :

Investments are stated at cost of acquisition or net realisable value whichever is lower.

7) RESEARCH AND DEVELOPMENT :

Revenue expenditure on Research and Development is charged as an expense against the profits for the year in which it is incurred and Capital Expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

8) EMPLOYEE RETIREMENT BENEFITS :

Retirement benefits to employees comprise of payments of Gratuity, Provident funds under the approved schemes of the Company, and also provision for Leave encashment. The Company has not made any contribution to the Gratuity Fund during the year. Provision for gratuity & leave encashment had been made on accrual basis instead of actuary valuation.

9) IMPAIRMENT OF ASSET :

Asset forming part of any cash generating units are tested for impairment when an indication exists that such assets may be impaired and impairment loss is recognised in profit & loss when recoverable amount of such asset is less than its carrying value.

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Mar 31, 2014

1) SYSTEM OF ACCOUNTING :

The Company maintains its books of account on accrual basis.

2) METHOD OF ACCOUNTING :

a) For sales and services -

The sale of goods is recognised on despatch to customers, sales exclude amounts recovered towards excise duty and sales tax.

b) Export sales are accounted for in accordance with Accounting standard

11 . Exchange gain or loss on realisation of foreign exchange is included in exchange fluctuation account.

3) FOREIGN EXCHANGE TRANSACTIONS :

Transactions in foreign currencies during the year are converted at the rates prevailing on the transaction date. All current assets and current liabilities in foreign currency are revalued at the exchange rate prevailing as at the Balance Sheet date. All exchange differences arising from convesion are included in Profit & Loss Account.

4) FIXED ASSETS :

a. Tangible Assets :

Fixed Assets are capitalised at cost of acquisition or at manufacturing cost in case of company manufactured assets. The revalued portion of the revalued assets has been added to the gross block of the respective assets. Depreciation is charged on Straight Line Method on all assets in accordance with the rates given in Schedule XIV of the Companies Act 1956.

Depreciation on revalued portion of the assets has been charged on straight liine method over the remaining life of the assets & adjusted against the revaluation reserves.

b. Intangible Assets :

Intangible assets acquired in Financial year 2008-09 are amortised in 7 equal annual installments.

5) CURRENT ASSETS :

a. Balances of Sundry Debtors, Loans, Advances & Deposits given or taken & sundry creditors are subject to confirmations. Effect of any variation will be accounted in the year of such variation.

b. INVENTORY :

Inventories are valued at lower of the cost or estimated net realisable value after providing for cost of obsolescence. Cost of Raw Materials is arrived at on first in first out method to comply with the provisions of As2 Work in process and finished goods include cost of materials, direct labour and overheads.

6) INVESTMENTS :

Investments are stated at cost of acquisition or net realisable value whichever is lower.

7) RESEARCH AND DEVELOPMENT :

Revenue expenditure on Research and Development is charged as an expense against the profits for the year in which it is incurred and Capital Expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

8) EMPLOYEE RETIREMENT BENEFITS :

Retirement benefits to employees comprise of payments of Gratuity, Provident funds under the approved schemes of the Company, and also provision for Leave encashment. The Company has not made any contribution to the Gratuity Fund during the year. Provision for gratuity & leave encashment had been made on accrual basis instead of actuary valuation.

9) IMPAIRMENT OF ASSET :

Asset forming part of any cash generating units are tested for impairment when an indication exists that such assets may be impaired and impairment loss is recognised in profit & loss when recoverable amount of such asset is less than its carrying value.

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Mar 31, 2013

1) SYSTEM OF ACCOUNTING :

The Company maintains its books of account on accrual basis.

2) METHOD OF ACCOUNTING :

a) For sales and services -

The sale of goods is recognised on despatch to customers, sales exclude amounts recovered towards excise duty and sales tax.

b) Export sales are accounted for in accordance with Accounting standard 11 . Exchange gain or loss on realisation of foreign exchange is included in exchange fluctuation account.

3) FOREIGN EXCHANGE TRANSACTIONS :

Transactions in foreign currencies during the year are converted at the rates prevailing on the transaction date. All current assets and current liabilities in foreign currency are revalued at the exchange rate prevailing as at the Balance Sheet date. All exchange differences arising from convesion are included in Profit & Loss Account.

4) FIXED ASSETS:

a. Tangible Assets:

Fixed Assets are capitalised at cost of acquisition or at manufacturing cost in case of company manufactured assets. The revalued portion of the revalued assets has been added to the gross block of the respective assets. Depreciation is charged on Straight Line Method on all assets in accordance with the rates given in Schedule XIV of the Companies Act 1956.

Depreciation on revalued portion of the assets has been charged on straight liine method over the remaining life of the assets & adjusted against the revaluation reserves.

b. Intangible Assets:

Intangible assets acquired in Financial year 2008-09 are amortised in 7 equal annual installments.

5) CURRENT ASSETS:

a. Balances of Sundry Debtors, Loans, Advances & Deposits given or taken & sundry creditors are subject to confirmations. Effect of any variation will be accounted in the year of such variation.

b. INVENTORY:

Inventories are valued at lower of the cost or estimated net realisable value after providing for cost of obsolescence. Cost of Raw Materials is arrived at on first in first out method to comply with the provisions of As2 Work in process and finished goods include cost of materials, direct labour and overheads.

6) INVESTMENTS:

Investments are stated at cost of acquisition or net realisable value whichever is lower.

7) RESEARCH AND DEVELOPMENT :

Revenue expenditure on Research and Development is charged as an expense against the profits for the year in which it is incurred and Capital Expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

8) EMPLOYEE RETIREMENT BENEFITS :

Retirement benefits to employees comprise of payments of Gratuity, Provident funds under the approved schemes of the Company, and also provision for Leave encashment. The Company has not made any contribution to the Gratuity Fund during the year. Provision for gratuity & leave encashment had been made on accrual basis instead of actuary valuation

9) IMPAIRMENT OF ASSET :

Asset forming part of any cash generating units are tested for impairment when an indication exists that such assets may be impaired and impairment loss is recognised in profit & loss when recoverable amount of such asset is less than its carrying value.

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Mar 31, 2012

1) SYSTEM OF ACCOUNTING:

The Company maintains its books of account on accrual basis.

2) METHOD OF ACCOUNTING:

a) For sales and services

The sale of goods is recognised on despatch to customers, sales exclude amounts recovered towards excise duty and sales tax.

b) Export sales are accounted for in accordance with Accounting standard 11. Exchange gain or loss on realisation of foreign exchange is included in exchange fluctuation account.

3) FOREIGN EXCHANGE TRANSACTIONS :

Transactions in foreign currencies during the year are converted at the rates prevailing on the transaction date. All current assets and current liabilities in foreign currency are revalued at the exchange rate prevailing as at the Balance Sheet date. All exchange differences arising from conversion are included in Profit & Loss Account.

4) FIXED ASSETS:

a. Tangible Assets:

Fixed Assets are capitalised at cost of acquisition or at manufacturing cost in case of company manufactured assets. The revalued portion of the revalued assets has been added to the gross block of the respective assets. Depreciation is charged on Straight Line Method on all assets in accordance with the rates given in Schedule XIV of the Companies Act 1956. Depreciation on revalued portion of the assets has been charged on straight line method over the remaining life of the assets & adjusted against the revaluation reserves.

b. Intangible Assets:

Intangible Assets acquired prior to 2000 have been depreciated at 4.75% (SLM) per year. Intangible assets acquired thereafter are amortised in 7 equal annual installments.

5) CURRENT ASSETS:

a. Balances of Sundry Debtors, Loans, Advances & Deposits given or taken & sundry creditors are subject to confirmations. Effect of any variation will be accounted in the year of such variation.

b. INVENTORY:

Inventories are valued at lower of the cost or estimated net realisable value after providing for cost of obsolescence. Cost of Raw Materials is arrived at on first in first out method to comply with the provisions of AS2 Work in process and finished goods include cost of materials, direct labour and overheads.

6) INVESTMENTS:

Investments are stated at cost of acquisition or net realisable value whichever is lower.

7) RESEARCH AND DEVELOPMENT :

Revenue expenditure on Research and Development is charged as an expense against the profits for the year in which it is incurred and Capital Expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

8) EMPLOYEE RETIREMENT BENEFITS :

Retirement benefits to employees comprise of payments of Gratuity, Provident funds under the approved schemes of the Company, and also provision for Leave encashment. The Company has not made any contribution to the Gratuity Fund during the year. Although the company has provided for gratuity liability on the basis of actuary valuation obtained from Actuary.

9) IMPAIRMENT OF ASSET :

Asset forming part of any cash generating units are tested for impairment when an indication exists that such assets may be impaired and impairment loss is recognised in profit & loss when recoverable amount of such asset is less than its carrying value.

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Mar 31, 2011

1) SYSTEM OF ACCOUNTING:

The Company maintains its books of account on accrual basis.

2) METHOD OF ACCOUNTING:

a) For sales and services -

The sale of goods is recognised on despatch to customers, sales exclude amounts recovered towards excise duty and sales tax.

b) Export sales are accounted for in accordance with Accounting standard

11. Exchange gain or loss on realisation of foreign exchange is included in exchange fluctuation account.

3) FOREIGN EXCHANGE TRANSACTIONS:

Transactions in foreign currencies during the year are converted at the rates prevailing on the transaction date. All current assets and current liabilities in foreign currency are revalued at the exchange rate prevailing as at the Balance Sheet date. All exchange differences arising from convesion are included in Profit & Loss Account.

4) FIXEDASSETS:

a. Tangible Assets:

Fixed Assets are capitalised at cost of acquisition or at manufacturing cost in case of company manufactured assets. The revalued portion of the revalued assets has been added to the gross block of the respective assets. Depreciation is charged on Straight Line Method on all assets in accordance with the rates given in Schedule XIV of the Companies Act 1956. Depreciation on revalued portion of the assets has been charged on straight line method over the remaining life of the assets & adjusted against the revaluation reserves.

Till the year ended 31st March, 2010, the Company had been accounting for depreciation on the Written Down Value Method.Commencing from the current year, the Company has revised its accounting policy of providing for depreciation from Writen Down value method to Straight Line method. Accordingly in compliance with Accounting Standard (AS6) on "Depreciation Accounting" , the depreciation has been recalculated with retrospective effect from the date of the asset coming into use.

The above change in Accounting Policy has resulted in a credit to Profit & Loss Account of Rs.74,09,119/- on account of the adjustment of depreciation relating to previous years and a higher charge of depreciation for the current year amounting to Rs.8,04,300/-. Consequently, the profit before tax and profit after tax for the current year are higher by Rs.66,04,8171- and Rs.66,04,8171- respectively.

Further, the net Fixed assets and the Reserves as on 31st March, 2011 are higher by Rs.66,04,817/- and Rs .66,04,8171- respectively.

b. Intangible Assets:

Intangible Assets acquired prior to 2000 are being depreciated at 4.75% (SLM) per year. Intangible assets acquired thereafter are amortised in 7 equal annual installments.

5) CURRENT ASSETS:

a. Balances of Sundry Debtors, Loans, Advances & Deposits given or taken & sundry creditors are subject to confirmations. Effect of any variation will be accounted in the year of such variation.

b. INVENTORY:

Inventories are valued at lower of the cost or estimated net realisable value after providing for cost of obsolescence. Cost of Raw Materials is arrived at on first in first out method to comply with the provisions of AS2 Work in process and finished goods include cost of materials, direct labour and overheads.

6) INVESTMENTS:

Investments are stated at cost of acquisition or net realisable value whichever is lower.

7) RESEARCH AND DEVELOPMENT:

Revenue expenditure on Research and Development is charged as an expense against the profits for the year in which it is incurred and Capital Expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

8) EMPLOYEE RETIREMENT BENEFITS:

Retirement benefits to employees comprise of payments of Gratuity, Provident funds under the approved schemes of the Company, and also provision for Leave encashment. The Company has not made any contribution to the Gratuity Fund during the year. Although the company has provided for gratuity liability on the basis of actuary valuation obtained from Actuary.

9) IMPAIRMENT OF ASSET:

Asset forming part of any cash generating units are tested for impairment when an indication exists that such assets may be impaired and impairment loss is recognised in profit & loss when recoverable amount of such asset is less than its carrying value.

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Mar 31, 2010

1) SYSTEM OF ACCOUNTING :

The Company maintains its books of account on accrual basis.

2) METHOD OF ACCOUNTING :

a) For sales and services -

The sale of goods is recognised on despatch to customers, sales exclude amounts recovered towards excise duty and sales tax.

b) Export sales are accounted for in accordance with Accounting standard 11 . Exchange gain or loss on realisation of foreign exchange is included in exchange fluctuation account.

3) FOREIGN EXCHANGE TRANSACTIONS :

Transactions in foreign currencies during the year are converted at the rates prevailing on the transaction date. All current assets and current liabilities in foreign currency are revalued at the exchange rate prevailing as at the Balance Sheet date. All exchange differences arising from convesion are included in Profit & Loss Account.

4) FIXED ASSETS :

a. Tangible Assets :

Fixed Assets are capitalised at cost of acquisition or at manufacturing cost in case of company manufactured assets. The revalued portion of the revalued assets has been added to the gross block of the respective assets.

Till the year ended 31st March, 2009, the Company had been accounting for depreciation on the Straight Line Method. Commencing from the current year, the Company has revised its accounting policy of providing for depreciation from straight line method to written down value method. Accordingly in compliance with Accounting Standard (AS6) on “Depreciation Accounting” , the depreciation has been recalculated with retrospective effect from the date of the asset coming into use.

The above change in Accounting Policy has resulted in a debit to Profit & Loss Account of Rs.80,32,720/- on account of the adjustment of depreciation relating to previous years and a lower charge of depreciation for the current year amounting to Rs.6,23,601/-. Consequently, the profit before tax and profit after tax for the current year are lower by Rs.74,09,119/- and Rs74,09,119/- respectively.

Further, the net Fixed assets and the Reserves as on 31st March, 2010 are lower by Rs.74,09,119/- and Rs.74,09,119/- respectively.

b. Intangible Assets :

Intangible Assets acquired prior to 2000 is been being depreciated at 4.75% (SLM) per year. Intangible assets acquired thereafter are amortised in 7 equal annual installments.

5) CURRENT ASSETS :

a. Balances of Sundry Debtors, Loans, Advances & Deposits given or taken & & sundry creditors are subject to confirmations. Effect of any variation will be accounted in the year of such variation.

b. INVENTORY :

Inventories are valued at lower of the cost or estimated net realisable value after providing for cost of obsolescence. Cost of Raw Materials is arrived at on first in first out method to comply with the provisions of AS2 Work in process and finished goods include cost of materials, direct labour and overheads.

6) INVESTMENTS :

Investments are stated at cost of acquisition or net realisable value whichever is lower.

7) RESEARCH AND DEVELOPMENT :

Revenue expenditure on Research and Development is charged as an expense against the profits for the year in which it is incurred and Capital Expenditure is grouped with Fixed Assets under appropriate heads and depreciation is provided as per rates applicable.

8) EMPLOYEE RETIREMENT BENEFITS :

Retirement benefits to employees comprise of payments of Gratuity, Provident funds under the approved schemes of the Company, and also provision for Leave encashment. The Company has not made any contribution to the Gratuity Fund during the year. Although the company has provided for gratuity liability on the basis of actuary valuation obtained from Actuary.

9) IMPAIRMENT OF ASSET :

Asset forming part of any cash generating units are tested for impairment when an indication exists that such assets may be impaired and impairment loss is recognised in profit & loss when recoverable amount of such asset is less than its carrying value.