Naval Technoplast Industries Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2010

1 Accounting Convention :

The financial statements have been prepared on going concern basis & the historical cost convention to comply in all material repects generally accepted accounting principles and provisions of Companies Act, 1956 (the Act), following mercantile system of i accounting as adopted consistently by the Company. Accounting policies not referred to otherwise, are consistent with generally j accepted accounting principles. |

2 Fixed Assets :

Fixed Assets are stated at cost including all incidental expenses related to acquisition and installation less accumulated depreciation and cenvat / vat credit availed thereon.

3 Depreciation : Depreciation is charged in the accounts of Fixed Assests on straight-line method at the rates and in the manner specified in schedule XIV of Companies Act, 1956. Depreciation/ amortisation of Computeris charges @ 25.00% (SLM). Depreciation on assets added/disposed off during the year is charged on pro-rata basis with reference to the month of addition/ disposal.

4 Inventories :

Inventories are valued as under:

i Raw Material, W.I.P. & Finished Goods - At Cost on FIFO Basis or net realisable value whichever is lower. ii Reusable Material - At net realisable value.

iii Spares, Stores & Others - At cost.

5 Investment:

Long term investment are stated at cost.

6 Sales:

Revenue from sale of goods is recognised when significant risks and rewards in respect of ownership of the goods are transferred to the customers.as per the terms of the respective sales order. Sales are inclusive of income from services, Sales Tax (Vat), excise duty, export incentives and exchange fluctuations on export sales, Packing & forwarding, receivables.

7 Purchase :

Purchases are inclusive of expenses on purchase, import duty, exchange rate difference etc and are net of taxes (for which credit is available), claims/discount.

8 Foreign Currency Transactions :

Transactions denominated in Foreign currency are normally recorded at the customs exchange rates prevailing at the time of transaction.

Year-end balances of monetary items denominated in foreign currency are translated at the year-end rates and difference arising there from is recognised as income or expenditure during the year.

Exchange difference on Foreign currency transaction,other than those related to Fixed Assets are charged to Profit & Loss A/C.

9 Contingent Liability :

a) Provisions in respect of present obligation arising out of past events are made in the accounts when reliable estimates can be made of the amount of the obligation.

b) Contigent liabilities if any are disclosed by way of a note to the financial Statement.after careful evaluation by the management of the facts and legal aspects of the matter involved.

10 Excise Duty & Cenvat:

i The Company is accounting for excise duty in respect of finished goods when the same is cleared from factory.

ii Cenvat Credit availed on Raw material / inputs is utilised for payment of Excise duty on goods sold. In case of Excise duty of capital goods purchased, 50% credit is availed in the year of purchase & remaining 50% is carried forward to next year.

11 Borrowing Cost :

All borrowing cost other than attributable to acquisition / construction of qualifying assets capitalised are charged to revenue.

12 Taxation :

The Provision for income tax is made on the basis of estimated taxable income for the current accounting year in accordance with the of Income Tax Act, 1961.The Deferred tax for the timing differences capable of reversal in subsequent period between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recongnised subject to consideration of prudence.

13 Export Incentives :

Duty drawback and excise duty refund on export (earned as export incentive) is accounted for to the extent there is reasonable certainity that these would be realised in future.

14 Related Party Transaction :

Disclosure of transactions with Related Parties, as required by "Accounting Standard 18-Related Party Disclosure" has been set out in the Notes on Accounts. Related Parties have been identified on the basis of representations made by Key managerial personnel and information available with the company.

15 Impairment of Assets :

The carrying amounts of tangible fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying valve of an asset may not be recoveravle. If there are indicators of impairment,an assessment is made to determine whether the assests carrying value exceeds its recoverable amount. Whenever the carrying value of an asset exceeds its recoverable amount, impairment is charged to the profit & loss account. Recoverable amounts are estimated for individual assets where feasible. otherwise to the relevant cash generating unit.