Accounting Policies of Zenith Computers Ltd. Company

Mar 31, 2015

A Fixed Assets and Depreciation (Note C of Unabridged Accounts)

a) Fixed Assets are stated at cost of acquisition or construction and include amounts added on revaluation less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising out of exchange rate variations attributable to the fixed assets are capitalized.

b) Depreciation on Fixed Assets, is provided on the basis of useful lives of the Fixed Assets and in the manner as specified in Schedule II to the Companies Act, 2013 effective from 1st April, 2014.

B Foreign Currency Transactions (Note E of Unabridged Accounts)

a) Transactions denominated in Foreign Currencies are normally recorded at the exchange rate prevailing at the time of the transactions or that exchange rate which approximates the actual rate at the date of the transaction.

b) Gains and losses on Foreign Exchange Transactions other than those relating to fixed assets are charged to the Profit and Loss account.

c) Monetary items denominated in foreign currencies at the yearend are restated at year end rates as per AS11.

d) The company is consistently following the policy of not restating the FCCB loan as at the Balance Sheet date (AS11).

C Inventories (Note G of Unabridged Accounts)

Items of inventory are valued at cost or net realizable value, whichever is lower, after providing for obsolescence, if any, and on a first-in, first-out (FIFO) basis. Cost of inventories comprises of cost of purchase, costs of conversion and other costs incurred in bringing them to their respective present location and condition.

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Mar 31, 2014

A Fixed Assets and Depreciation (Note C of Unabridged Accounts)

a) Fixed Assets are stated at cost of acquisition or construction and include amounts added on revaluation less accumulated depreciation and impairment loss, if any. All costs, including fi nancing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising out of exchange rate variations attributable to the fi xed assets are capitalized.

b) Depreciation on Fixed Assets, is provided on the basis of Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. No depreciation is charged on the appreciation on revaluation of the fi xed assets.

c) The depreciation on Computer Systems has been charged @4% as against 16.21%, consequently, the total depreciation on fi xed assets amounts to Rs.102.72 lakhs for the year as against Rs.175.08 lakhs.

B Foreign Currency Transactions (Note E of Unabridged Accounts)

a) Transactions denominated in Foreign Currencies are normally recorded at the exchange rate prevailing at the time of the transactions or that exchange rate which approximates the actual rate at the date of the transaction.

b) Gains and losses on Foreign Exchange Transactions other than those relating to fi xed assets are charged to the Profit and Loss account.

c) Monetary items denominated in foreign currencies at the year end are restated at year end rates as per AS11.

C Inventories (Note G of Unabridged Accounts)

Items of inventory are valued at cost or net realizable value, whichever is lower, after providing for obsolescence, if any, and on a first-in, first-out (FIFO) basis. Cost of inventories comprises of cost of purchase, costs of conversion and other costs incurred in bringing them to their respective present location and condition.

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Mar 31, 2010

A) Basis of Preparation of Financial Statements

a) The Financial Statements have been prepared under the historical convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the Company.

B) Fixed Assets and Depreciation

a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. All costs, including financing costs till commencement of commercial production are capitalized.

b) Depreciation on Fixed Assets, except Computers Systems, is provided on the basis of Straight Line Method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on Computer Systems is provided on the basis of Written Down Value method, at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

C) Foreign Exchange Transactions

a) Transactions denominated in Foreign Currencies are normally recorded at the exchange rate prevailing at the time of the transactions.

b) Gains and losses on Foreign Exchange Transactions other than those relating to fixed assets are charged to the Profit and Loss Account.

c) The balances outstanding in the foreign currency denominated Current Assets and Current Liabilities are restated as per AS11 as at the Balance Sheet date at the then prevailing foreign exchange rate and are recognized in the accounts.

D) Investments

Long Term Investments are stated at cost.

E) Inventories

a) Raw Materials, Stores, Spares etc. and Stock-in-transit are valued at cost.

b) Stock-in-Process is valued at cost including related overheads.

c) Finished Goods are valued at cost. Cost includes cost of production/purchase and expenses incurred in putting the inventories in their present location and condition.

F) Sales

Sales include excise duty, and are net of discount and net sales returns.

G) Excise Duty

Excise Duty is accounted for as and when paid on the clearance of the goods from premises.

H) Employee Retirement Benefits

a) Companys contributions to Provident fund, during the year are charged to Profit and Loss Account.

b) Gratuity is charged to Profit and Loss account on the basis of actuarial valuation as required by AS 15 issued by ICAI.

I) Research and Development Expenses

Expenditure related to Capital items is debited to fixed assets and depreciated at applicable rates. Revenue expenditure is charged to Profit and Loss Account of the year in which they are incurred.

J) Accounting Standards

Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 have been followed wherever applicable.