Accounting Policies of Parekh Aluminex Ltd. Company

Mar 31, 2012

(A) Basis of Presenting Financial Statements

(I) Basis of Accounting

The financial statements are prepared on historical cost convention basis and in accordance with the generally accepted accounting principles in India, the provisions of the Companies Act, 1956, and the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. The Company follows the mercantile system of accounting. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(II) Use of Estimates

The presentation of the financial statements in conformity with generally accounting principles requires the Management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management's evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

(III) Classification of Assets and Liabilities

The Revised Schedule VI to the Companies Act, 1956 requires assets and liabilities to be classified as either Current or Non-current.

(a) An asset shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle;

(ii) It is held primarily for the purpose of being traded;

(iii) It is expected to be realized within twelve months after the reporting date; or

(iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

(b) All assets other than current assets shall be classified as non-current.

(c) A liability shall be classified as current when it satisfies any of the following criteria:

(i) It is expected to be settled in the Company's normal operating cycle;

(ii) It is held primarily for the purpose of being traded;

(iii) It is due to be settled within twelve months after the reporting date; or

(iv) The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

(d) All liabilities other than current liabilities shall be classified as non-current.

(IV) Previous year figures

The financial statements for the year ended March 31, 2012 have been presented as per the Revised Schedule VI to the Companies Act, 1956. Accordingly, the previous year's figures have also been reclassified to confirm to this year's classification.

(B) Summary of Significant Accounting Policies

(I) Fixed Assets & Depreciation

(a) Fixed Assets are stated at their original cost, such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition.

(b) Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed in schedules XIV to the Companies Act 1956.

(c) Depreciation on assets added / disposed off during the year is provided on pro-rata basis with reference to the period of use.

(d) Assets costing up to Rs. 5,000/- are fully depreciated in the year of acquisition.

(II) Valuation of Inventory

(a) Finished goods are valued at cost plus direct expenses related to it.

(b) Raw Material is valued at cost.

(III) Revenue Recognition

Domestic Sales revenue are recognized on dispatch of the goods to the customers and stated net of returns. Export sales are recognised on date of bill of landing/airway bill.

(IV) Foreign Currency Transactions

Foreign Currency transactions are accounted at the rates prevailing on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the statement of profit and loss.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing at the date of balance sheet and resultant exchange differences are recognised in the Statement of Profit and Loss for the year.

(V) Taxation

Current tax is determined as the amount of tax payable in respect of the taxable income for the year.

Deferred tax is recognised, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Minimum Alternate Tax (MAT) credit is recognised as an asset on the basis of the considerations that there being a convincing evidence of realisation of the asset and in the year in which the MAT credit becomes eligible to be recognised, the said asset is created by way of credit to the statement of profit and loss.

(VI) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of Cash Generating Units. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use.In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

(VII) Employee Benefits

(i) As per the consistent accounting policies followed by the Company since inspection, the Company is not providing for any other benefit to employees except for Provident Fund to their permanent employees.

(ii) Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

(VIII) Leases

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets are classified as operating leases. Operating lease payments / receipts are recognised as an expense / income in the Statement of Profit and Loss on a straight-line basis over the lease term.

(IX) Cash and Cash Equivalent

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value

(X) Provision & Contingencies

A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle obligation, in respect of which reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed.

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Mar 31, 2011

1) System of Accounting

a) Basis of Accounting

The financial statements are prepared on historical cost convention basis and in accordance with the generally accepted accounting principles in India, the provisions of the Companies Act, 1956, and the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. Company follows the mercantile system of accounting. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b) Use of Estimates

The presentation of the financial statements in conformity with generally accounting principles requires the Management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management's evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

2) Fixed Assets & Depreciation

(a) Fixed Assets are stated at their original cost. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition.

(b) Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed in schedules XIV to the Companies Act 1956.

(c) Depreciation on assets added / disposed off during the year is provided on pro-rata basis with reference to the period of use.

(d) Assets costing upto Rs. 5,000/= are fully depreciated in the year of acquisition.

3) Valuation of Inventory

(a) Finished goods are valued at cost plus direct expenses related to it.

(b) Raw Material is valued at cost.

4) Revenue Recognition

Domestic Sales revenue are recognized on dispatch of the goods to the customers and stated net of returns. Export sales are recognised on date of bill of landing/airway bill.

5) Foreign Currency Transactions

Foreign Currency transactions are accounted at the rates prevailing on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the profit and loss account.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing at the date of balance sheet and resultant exchange differences are recognised in the profit and loss account for the year

6) Taxation

Current tax is determined as the amount of tax payable in respect of the taxable income for the year.

Deferred tax is recognised, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Minimum Alternate Tax (MAT) credit is recognised as an asset on the basis of the considerations that there being a convincing evidence of realisation of the asset and in the year in which the MAT credit becomes eligible to be recognised, the said asset is created by way of credit to the profit and loss account.

7) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of Cash Generating Units. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

8) Employee Benefits

(i) As per the consistent accounting policies followed by the Company since inspection, the Company is not providing for any other benefit to employees except for Provident Fund to their permanent employees.

(ii) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

9) Borrowing Costs

Borrowing costs attributable to acquisition, construction or production of qualifying assets are capitalized as part of such asset till the time the asset is ready for use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

10)Earnings Per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standards 20, "Earnings per Share" issued by the ICAI. Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

11)Capital Work-In-Progress

Project under commissioning and other Capital Work-In-Progress are carried at cost, comprising direct cost and related incidental expenses.

12)Cash Flow Statements

Cash flow statements are prepared in accordance with "Indirect Method" as explained in the Accounting Standard on Cash Flow Statements (AS-3) notified under the Companies (Accounting Standards) Rules, 2006.

13)Provisions and Contingencies

A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle obligation, in respect of which reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed.

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Mar 31, 2010

A) Basis of Accounting

The financial statements are prepared on historical cost convention basis and in accordance with the generally accepted accounting principles in India, the provisions of the Companies Act, 1956, and the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006. Company follows the mercantile system of accounting.

b) Use of Estimates

The presentation of the financial statements in conformity with generally accounting principles requires the Management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on managements evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.

2) Fixed Assets & Depreciation

a) Fixed Assets are stated at their original cost. Such expenditure comprises purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition.

b) Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed in schedules XIV to the Companies Act, 1956.

c) Depreciation on assets added / disposed off during the year is provided on pro-rata basis with reference to the period of use.

3) Valuation of Inventory

a) Finished goods are valued at cost plus direct expenses related to it.

b) Raw Material is valued at cost

4) Revenue Recognition

Domestic Sales revenue are recognised on dispatch of the goods to the customers and stated net of returns. Export sales are recognised on date of bill of landing/airway bill.

5) Foreign Currency Transactions

Foreign Currency transactions are accounted at the rates prevailing on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the profit and loss account.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing at the date of balance sheet and resultant exchange differences are recognised in the profit and loss account for the year.

6) Taxation

Current tax is determined as the amount of tax payable in respect of the taxable income for the year.

Deferred tax is recognised, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognised on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

Minimum Alternate Tax (MAT) credit is recognised as an asset on the basis of the considerations that there being a convincing evidence of realisation of the asset and in the year in which the MAT credit becomes eligible to be recognised, the said asset is created by way of credit to the profit and loss account.

7) Impairment of Assets

Impairment is ascertained at each balance sheet date in respect of Cash Generating Units. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

8) Employee Benefits

i) As per the consistent accounting policies followed by the Company since inspection, the Company is not providing for , any other benefit to employees except for Provident Fund to their permanent employees.

ii) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

9) Borrowing Costs

Borrowing costs attributable to acquisition, construction or production of qualifying assets are capitalized as part of such asset till the time the asset is ready for use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

10) Earnings Per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standards 20, "Earnings per Share" issued by the ICAI. Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earning per share, the net profit or loss for the year attributable to equity share holders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

11)Capital Work-in-Progress

Project under commissioning and other Capital Work-in-Progress are carried at cost, comprising direct cost and related incidental expenses.

12) Cash Flow Statements

Cash flow statements are prepared in accordance with "Indirect Method" as explained in the Accounting Standard on Cash Flow Statements (AS-3) notified under the Companies (Accounting Standards) Rules, 2006.

13) Provisions and Contingencies

A provision is recognised when the Company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle obligation, in respect of which reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes to the financial statement. A contingent asset is neither recognised nor disclosed.