Notes forming part of the Financial Statements 1. COMPANIES OVERVIEW: Hindustan Appliances Limited (the company) is a public Limited company incorporated under the provisions of the companies Act, 1956 vide CIN : l18101mh1984plc034857 2. SIGNIFICANT ACCOUNTING POLICIES: BASIS OF ACCOUNTING AND brPARATION OF FINANCIAL STATEMENTS The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. Accounting Policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. All income and expenditure items having a material bearing on the financial statements are generally recognised on accrual basis, material known liabilities are provided for on the basis of available information/ estimation, however certain claims and income which are not ascertainable/ acknowledged by customers are not taken into accounts. USE OF ESTIMATES: The brparation of financial statements in conformity with the generally accepted accounting principles requires 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. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized. REVENUE RECOGNITION: Revenue is recognized only when it is reasonably certain that the ultimate collection will be made. Revenue in respect of Insurance / Other Claims, etc., is recognized only when it is admitted by the insurance / other authorities and there is reasonable certainty that the ultimate collection will be made. INVESTMENTS: Long Term Investments are shown at cost. However, when there is a decline, other than temporary, in the value of a long term investment, the carrying amount is reduced to recognise the decline. PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS: Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an out flow of resources. Contingent liabilities are not recognized but are disclosed at their estimated value in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. TAXES ON INCOME: In accordance with Accounting Standard (AS-22) - Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognised only if, there is virtual certainty that sufficient future taxable income will be available.against which they can be realised. 2: Provision for accruing of liabilities for gratuity in terms of Accounting Standard 15 [AS-15 (revised 2005J] "Accounting for Employee Benefits" issued by The Institute of Chartered Accounts of India has not been made in the accounts. The figure of which is not ascertainable. However same is accounted on cash basis. 3: In accordance with the pronouncements of Accounting Standard 22 : Accounting for Taxes deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between the taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or subsequent period. 4 In view of reasonable uncertainty as to the utilization of deferred tax assets in the foreseeable future in relation to carry forward capital Loss under tax laws the same has not been recognised in books of accounts as per para 17 of the said standard: 5: Balances in respect of Loans & advances in most of the cases are subject to confirmations, reconciliations and adjustments, if any. 6 : In the opinion of the management Loans & Advances have a value on realization in the ordinary course of the business at least equal to the amount at which they are stated in the books of accounts. 7 : The brvious year's figures have been regrouped & recast wherever necessary to make them comparable For A.C.MODI & ASSOCIATES Chartered Accountants Firm's registration number: 11£55$ ALPESG C.MODI Proprietor Membership number: 101342 Place: Mumbai Date: 30 MAY 2014 |