SENSEX NIFTY India | Accounting Policy > Miscellaneous > Accounting Policy followed by Multi-Arc India - BSE: 513685, NSE: MULTIARC

Multi-Arc India

BSE: 513685|NSE: MULTIARC|ISIN: INE399B01016|SECTOR: Miscellaneous
Multi-Arc India is not traded in the last 30 days
Multi-Arc India is not traded in the last 30 days
Mar 08
Accounting Policy Year : Mar '09
[a] Basis of Accounting:The financial statements have been prepared on
 a going concern basis following accrual .system of accounting. They
 comply in all material respects with the mandatory Accounting Standards
 issued by the Institute of Chartered Accountants of India and the
 relevant provisions of the Companies Act, 1956.The presentation of
 financial statements requires the management to make estimates and
 assumptions that affect the amounts reported in the financial
 statements and accompanying notes. Although these estimates are based
 on managements best knowledge of current events and actions of the
 company in future, actual results may ultimately differ from the

[b] Fixed Assets (including Intangible Assets)The fixed assets (including intangible assets) are stated at cost and other incidental expenses of acquisition less accumulated depreciation. Pre-operative expenses, net of revenue, are capitalized. Leasehold land has been capitalized and the value of the land is amortised over the lease term,

[c] Depreciation:

i) Depreciation on fixed assets, other than land, has been provided on straight-line basis in accordance with the provisions of the Companies Act, 1956, at the rates and in the manner specified in Schedule XIV of the Act.

ii) Depreciation on the fixed assets .added/disposed off during the year has been provided on pro-rata basis with reference to the month of addition/disposal. Individual assets costing less than Rs. 5,000 are written off in full in the* year of purchase.

iii)iv)Intangible Assets comprising of Development Expenditure on Development of new technology and processes is long term in nature. Therefore, the management has decided to amortise the same over 10 years. Applications for Patents have been filed with the concerned authority. From the current year onwards the management has decided to charge depreciation on the basis of actual utilisation of the assets.

[d] Impairment of Assets: The carrying amount of assets is reviewed at each balance sheet date to check whether there is any indication of impairment loss. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. At each balance sheet date the management reviews the carrying amount of assets, an impairment loss is charged to the Profit & Loss in the year in which an asset is identified as impaired, and if there is a change in the estimate of the recoverable amount, the loss recognised in the previous year is reversed.

[e] lnventories:lnventories are valued at lower of cost or estimated net realisable value, which ever is lower, after providing for obsolescence and where appropriate, includes transportation cost and excise duty.

[f] lnvestments:lnvestments are long term in nature and are hence carried at cost.

[g] Transaction of Foreign Currency Items:Transactions in foreign currency are recorded in the reporting currency by applying the exchange rate prevailing at the time of transaction.

[h] Retirement Benef its : Provident Fund-Contributions as required under the statute/rules are made to the Provident Fund/Government Provident Fund.Gratuity.Employees are entitled to Gratuity payment as per statute and the provision for gratuity payable to the retiring staff is accounted on cash basis. Leave Encashment:Provision for annual leave encashment benefits on retirement is accounted on cash basis,

[i] Revenue Recognition:The Company is engaged in the business of surface enhancement of articles/tools and materials supplied by the clients. Bills are rendered to the clients in respect of the work done at the rates agreed with the parties. Any expenditure incurred in respect of defective coating is borne by the company as and when settled.

[j] Lease:Financial Lease Rentals are accounted over the life of the asset and are expensed with reference to the lease terms.

[k] Borrowing Costs-.Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

[l] Taxes on lncome:Taxes comprise of both current tax and deferred tax at the applicable enacted/substantively enacted rates. Current Tax represents the amount of income-tax payable/recoverable in respect of the taxable income/loss for the reporting period. Deferred Tax reflects the impact of current year timing differences between taxable income and accounting income for the reporting period that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets are recognised on carry forward of unabsorbed depreciation and tax losses only to the extent of existence of reasonable certainty that such deferred tax asset can be realised against future taxable profits. Unrecognised deferred tax assets/liability of earlier years are re-assessed and recognised to the extent of reasonable certainty of future taxable profits.

[m] Development Expenditure :Expenditure on development of new technology and processes is amortized over a period of 10 years.

[n] Provisions and Contingencies:A provision is recognized when there is a legal and constructive obligation as a result of a past event, for which a probable cash outflow will be required and a reliable estimate of the amount can be made. Provision is made in the accounts for those contingencies, which are likely to materialize into liabilities after the year-end till the adoption of accounts by the Board of Directors and which have a material effect on the Balance Sheet. Contingent Liabilities, if any, are disclosed by way of notes on accounts. They are disclosed when the company has a possible or a present obligation where it is not probable to reliably estimate the outflow of resources.

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