ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS
A.Siginificant Accounting Policies
Basis of Accounting
The Company maintains its accounts following the historical cost convention except for the revaluation of certain fixed assets. All expenses and income to the extent considered payable and receivable respectively unless stated otherwise have been accounted for on mercantile basis.
Use of Estimates
The preparation of financial statements require management to make estimates and assumption that affect the reported amount of assets and liabilities and disclosures relating to contingent liabilities and assets as at the balance sheet date and the reported amounts of income and expenses during the year.
Contingencies are recorded when it is probable that a liability will be incurred and the amounts can reasonably be estimated. Difference between the actual results and the estimates are recognised in the year the results are known/materialised.
Fixed Assets
Fixed Assets are stated at cost of acquisition or construction or at revalued amounts wherever such assets have been revalued.
Depreciation
a) Depreciation on assets carried at historical costs is provided on straight-line method at the rates specified in Schedule XIV of the Companies Act, 1956.
b) Depreciation in case of revalued amounts of fixed assets are provided on straight-line method on the values given by the valuers on the basis of remaining useful life as estimated by the valuers and the differential amount with respect to the depreciation computed as per (a) above is transferred from Revaluation Reserve to Profit & Loss Account.
c) Classification of plant & machinery in continuous process plant is done by the Management based on technical certificates and reports.
Inventories
Inventories are stated at the lower of cost and estimated net relisable value. Cost is determined on the basis of first in first out, except engineering stores, cost for which are computed on the basis of weighted average. Cost in the case of work-in-progress and finished goods, represents materials, direct labour and appropriate portion of factory overheads. Adequate provision is made for defective, slow moving and obsolete items of inventories. Custom Duty on Bonded materials is accounted for as and when the materials are cleared.
Investments
Investments are stated at cost. Diminution in value, other than temporary in nature is provided for.
Retirement and other benefits to the Employees
The total cost of the Company’s contributions to Provident and Pension Funds are charged against revenue on accrual basis. As per the Company’s Policy, accured leave is not encashable at the time of retirement or otherwise.
II BALANCE SHEET:
1.0. PROVISION FOR INCOME
TAX:
In view of accumulated loss upto 2026-27,
no income tax has been provided in the accounts.
2.0. RETIREMENT AND OTHER:
Liability towards gratuity has been
accounted for as per actuarial valuation method.
3.DEFERRED REVENUE
EXPENDITURE
VR compensation paid to employees in terms of approved scheme of
voluntary retirement has been
debited to "Deferred Revenue Expenditure" which will be
amortised over period of 5 years.
4.0 LEAVE ENCASHMENT:
4.1.Pending actuarial valuation in respect of accumulated leave salary
encashable, no provision has been
made in the accounts
although provided in Accounting Standard - 15 of the Institute of Chartered
Accountants of India.
5.0.HIRA CABLE WORKS:
5.1.The
amount received from M/s. Palma Traders Ltd. over and above claim for the cost
of
materials have been kept under the
suspense account (Rs.2,96,420.05) as directive of Court.
5.2 Post Office Savings Pass
Book for Rs.19,000.00 has been pledged with Excise Authority and NDC for
Rs.9,300.00 has been pledged with other
Govt. Departments.
6.0.HIRAKUD INDUSTRIAL
WORKS:
6.1
Stores and spares includes non-moving stock of Rs. 15651152.33 (previous year
Rs. 21,55,120.78) not
moved
for more than 12 years out of which Rs. 4,51,511.81 (previous year Rs. 4,55,512.76)
are loose tools.
6.2.NSC and NDC for Rs.
29,640.00 are pledged with Govt. Department.
7.0 PROJECT WING:
7.1 Other Direct Expenses
exhibited under other manufacturing expenses (schedule - 15) includes material
procured and billed to the customer in
respect of turnkey order.
7.2 The revenue on the
contract work has been recognised on the basis of works actually executed
during
the year as per JMC.
8.0.GENERAL:
8.1.The Company is wholly
owned subsidiary of Indo Wagon Ltd. on being taken over by 100% shares
from Sunanda Traders Pvt. Ltd. w.e.f. 15th
September 2024.
8.2 In view of labour
problems, the company was forced to declare "Suspension of Work"
w.e.f. 08.12.24.
8.3.Figures have been
re-arranged / re-grouped wherever necessary.
Scheduled 1 to 19 and Significant
Accounting Policies and Explanatory notes annexed here to form part
of the Balance Sheet and Profit & Loss
Account.
FOR ABC & CO.
For & on behalf of Board
CHARTERED ACCOUNTANTS
(AJAY SEN) Director Director
(PARTNER)
Membership No 123456
Date:
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