Accounting Policies of Vatsa Corporation Ltd. Company

Oct 31, 2013

A. Basis of Accounting

a. The financial statements are prepared under the historical cost convention using the accrual system of accounting in accordance with the accounting principles generally accepted in India (Indian GAAP) and the requirements of the Companies Act, 1956, including the mandatory Accounting Standards as prescribed by the Companies (Accounting Standards) Rules 2006.

b. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year Example of such estimates include provisions for doubtful debts, employee retirement benefits plans, provision for income tax, provision for warranty cost and the useful lives of fixed assets. The difference between the actual results and estimates are recognised in the period in which the results are known and materialised.

B. Fixed Assets/Capital Work in Progress

Fixed Assets are stated at cost, less accumulated depreciation / amortisation and impairment loss, if any. The actual cost is inclusive of freight, installation cost, duties, taxes, financing cost and other incidental expenses related to the acquisition and installation of the respective assets but does not include tax/duty credits availed.

C. Depreciation

Depreciation on fixed assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956 or based on useful life of assets, whichever is higher. Intangibles : Intangible Assets are amortised over a period of five years.

D. Impairment of Assets

The Fixed Assets or a group of assets (cash generating units) are reviewed for impairment at each Balance Sheet date. In case of any such indication, the recoverable amount of these assets is determined, and if such recoverable amount of the asset or cash generating unit to which the asset belongs is less than it''s carrying amount, the impairment loss is recognised by writing down such assets to their recoverable amount. An impairment loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased.

E. Investments

Quoted Investments are valued at cost or market value whichever is lower. Unquoted Investments are stated at Cost. The decline in the value of the Unquoted Investments, other than temporary, is provided for. Cost is inclusive of brokerage, fees and duties but excludes Securities Transaction Tax, if any.

F. Inventories

Inventories are valued at cost or net realisable value whichever is lower. Cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.

G. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of an qualifying asset are capitalised as part of the cost of that asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

H. CENVAT/Value Added Tax

CENVAT/Value Added Tax benefit is accounted for by reducing the purchase cost of the materials/fixed assets/ services.

I. Revenue Recognition

a. Revenue is recongnised on transfer of significant risk and reward in respect of ownership.

b. Sales/Turnover for the year includes sales value of goods, excise duty, duty drawback and other recoveries such as insurance, transportation and packing charges but excludes sales tax, value added tax and recovery of finance and discounting charges.

c. Insurance, Duty Drawback and other claims are accounted for as and when admitted by the appropriate authorities.

d. Dividend on investments is recognised when the right to receive is established.

J. Foreign Currency Transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transactions. Foreign Currency Monetary Assets and Liabilities are translated at the year end rate. The difference between the rate prevailing on the date of transaction and on the date of settlement as also on translation of Monetary Items at the end of the year is recognised, as the case may be, as income or expense for the year.

K. Employee Benefits

a. Short Term Employees Benefits

Short Term Employees Benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related services are rendered.

b. Post Employment Benefits

I. Provident Fund - Defined Contribution Plan

The Company contributes monthly at a determined rate. These contributions are remitted to the Employees'' Provident Fund Organisation, India for this purpose and is charged to Statement of Profit and Loss on accrual basis.

II. Gratuity - Defined Benefit Plan

The Company provides for gratuity to all the eligible employees. The benefit is in the form of lump sum payments to vested employees on retirement, on death while in employment, or termination of employment for an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs on completion of five years of service_ Liability in respect of gratuity is determined using the projected unit credit method with actuarial valuations as on the Balance Sheet date and gains/ losses are recognised immediately in the Statement of Profit and Loss.

III. Leave Encashment

Liability in respect of leave encashment is determined using the projected unit credit method with actuarial valuations as on the Balance Sheet date and gains/losses are recognised immediately in the Statement of Profit and Loss.

L. Taxation

Income tax comprises of current tax and deferred tax. Provision for current income tax is made on the assessable income/benefits at the rate applicable to relevant assessment year. Deferred tax assets and liabilities are recognised for the future tax consequences of timing differences, subject to the consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates enacted or substantively enacted by the Balance Sheet date. The carrying amount of deferred tax asset/liability are reviewed at each Balance Sheet date and recognised and carried forward only to the extent that there is a reasonable certainty that the asset will be realised in future.

Minimum Alternate Tax (MAT) paid on the book profits, which give rise to future economic benefits in the form of tax credit against future income-tax liability, is recognised as an asset in the Balance Sheet if there is convincing evidence that the Company will pay normal tax within the period specified for utilisation of such credit.

M. Provisions, Contingent liabilities and Contingent Assets

Provisions are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources in respect of which reliable estimate can be made. Contingent Liabilities are disclosed by way of Notes to Accounts. (refer point no. 31)

N. Prior period items

Prior period items are included in the respective heads of accounts and material items are disclosed by way of Notes to Accounts.

O. Other Accounting Policies

These are consistent with the generally accepted accounting principles.

---

Oct 31, 2012

A. Basis of Accounting

a. The financial statements are prepared under the historical cost conversion using accrual system of accounting in accordance with the accounting principles generally accepted in India (Indian G j, Yemenis of L Companies Art, 1956, Including the mandate Accounting Standards as presented by the Companies (Accounting Standards) Rules 2006.

b. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting principles (GAAP) requires the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the financial statements and reported amounts of income and expenses during the year. Example of sue estimates include provisions for doubtful debts, employee retirement benefits plans, accounting for warranty cost and the useful lives of fixed assets. The difference between the actual results and estimates are recognized in the period in which the results are known and materialized.

B. Fixed Assets/ Capital Work in Progress Fixed Assets are stated at cost less accumulated depreciation amortization and impairment loss if any expenses related to the acquisition and installation of the respective assets but does not include tax/duty credits availed.

C Deprecation

Depreciation on fixed assets is provided on Straight Line Method at the rates spewed in Schedule XIV to me Companies Act, 1956 or based on useful life of assets, whichever is higher.

Intangibles : Intangible Assets are amortized over a period of five years.

D. Impalement of Assets

The Fixed Assets or a group of assails (cash generating units) are reviewed tor Impairment at ^ Balance Sheet date In case of any such indication, the recoverable amount of these assets is determined, and recoverable amount of the asset or cash generating unit to which the asset belongs is less than it''s carrying amount, the impairment loss is recognized by writing down such assets to the exists impairment loss is reversed if there is change in the recoverable amount and such loss ether no longer exists or has decreased.

E. Quoted Investments were valued at cost. or market value whichever is lower Unquoted Invents are stalled at Cost The decline in the value of the Unquoted Investments, other than temporary, is provided for. Cos inclusive of brokerage, fees and duties but excludes Securities Transaction Tax, if any.

F. Inventories

Inventoried are valued a. cost or ne, realizable value whichever is lower. Cost of Invented of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.

G. Borrowing costs

Borrowing costs of that are directly attributable to the acquisition, construction or production of an qualifying asset ailed as part of the cost of that asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Other borrowing costs are recognized as an expense in the peons in which they are incurred.

H. CENVAT/Value Added Tax

CENVAT/Value Added Tax benefit is accounted for by reducing the purchase cost of the materials/fixed assets/ services.

I.Revenue Recognition -

a. Revenue is recognized on transfer of significant risk and reward in respect of ownership.

b. Sales/Turnover for the year Includes safes value of goods, excise duty, duty drawback and ether recoveries authorities. recognized when the right to receive is established, recovery of finance and discounting charges.

c. Insurance Duty Drawback and other claims are accounted for as and when admitted by the appropriate authorities.

d. Dividend on investments is recognized when the right to receive is established.

K. Employee Benefits

a. Short Term Employees Benefits are recognized as an expense at the undiscounted amount in the statement of prod it and loss of the year in which the related services are rendered.

b. Post Employment Benefits

I. Provident Fund- Defined contribution plan

The company contributes monthly at a determined rate These contributions are remitted to the Employees provident Fund Organization India for this purpose and is charged to statement of profit and loss on accrual basis.

II. Gratuity-Defined Benefit plan

The Company provides for gratuity to all the eligible employees The benefits is in the form of lump sum payments for an amount equivalent to 15 days salary payable for each completed year of service vesting occurs on completion of five years of services respect liability in respect of gratuity is determined using the projected unit credit method with actuarial valuation as on balance sheet date and gains losses are recognized immediately in the statement of profit and loss.

III. Leave Encashment

Liability in respect of leave encashment is determined using the projected unit method with actuarial valuations as on the Balance sheet sate and gains/losses are recognized immediately in the statement of profit and loss.

L. Taxation

Income tax comprises of current tax and deferred tax provision for current income tax is made on the assessable income/benefits at the rate applicable to relevant assessment year. Deferred tax assets and liabilities are recognized for the further tax consequences of timing differences subject to the consideration of prudence Deferred tax assets and liabilities are measured using the tax asset/liabilities are reviewed at each Balance sheet date and recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized of future.

Minimum Altimeter Tax (MAT) paid on the book profits which give rise to future economic benefits in the form of tax credit against future income-tax liability is recognized as an assets in the Balance sheet if there is convincing evidence that the company will pay normal tax within the period specified for utilization of such credit.

M. Provisions contingent Liabilities and Contingent Assets

Provisions are recognized when there is a present obligation as a result of past events and it is probable that contingent liabilities are disclosed by way of Notes to Accounts. (refer point no.31)

N. Prior period items

Prior period items are included in the respective hands of accounts and material items are disclosed by way of Notes to Accounts.

O. Other Accounting Policies

These are consistent with the generally accepted accounting principles.

---

Oct 31, 2011

1. BASIS OF ACCOUNTING

The company prepares its financial statements under the historical cost convention in according with the generally accepted accounting Act, 1956 except otherwise stated.

2. FIXED ASSETS :

2.1 Fixed Assets

Fixed Assets are stated at the cost of acquisition less accumulated Depreciation.

2.2 Depreciation:

i) Depreciation on fixed assets, other than leased assets & leasehold improvements (if any) intangible assets, is provided on straight line method at the rates prescribed under schedule XIV to the companies Act, 1956. Depreciation on additions during the period has been provided on prorata basis from date of purchase of the said assets till the end of the period / date of disposal.

ii) Leasehold improvements if any, are being amortised equally over a period of ten year.

iii) Intangible assets are amortised equally over a period of ten year.

3. INVESTMENTS :

Investment are stated at cost.

4. INVENTORIES:

Inventories are valued at lower of cost or market value except unquoted Shares and securities, which are valued at cost.

5. MISCELLANEOUS EXPENDITURE

5.1 preliminary expenses are amortised equally over a period of ten years.

5.2 Deferred Revenue Expenditure comprising of expenditure towards advertisement and publicity for opening of Versova Branch, launching of deposit scheme and registration fees & stamp duty for increase in authorized capital are amortised equally over period of five years.

5.3 Shares issue Expenditure are written off equally over a period of ten years.

6. Income & Expenditure :

6.1 Income from rental of lockers was collected in advance and accounted for on cash basis.

6.2 Bonus and Leave Encashment is accounted for on cash basis.

6.3 Interest on government Securities is accounted for on cash basis.

---

Oct 31, 2010

1. BASIS OF ACCOUNTING

The company prepares its financial statements under the historical cost convention in according with the generally accepted accounting Act, 1956 except otherwise stated.

2. FIXED ASSETS :

2.1 Fixed Assets

Fixed Assets are stated at the cost of acquisition less accumulated Depreciation.

2.2 depreciation :

i) Depreciation on fixed assets, other than leased assets & leasehold improvements (if any) intangible assets, is provided on straight line method at the rates prescribed under schedule XIV to the companies Act, 1956. Depreciation on additions during the period has been provided on prorate basis from date of purchase of the said assets till the end of the period/ date of disposal.

ii) Leasehold improvements if any, are being amortized equally over a period of ten year.

iii) Intangible assets are amortized equally over a period of ten year.

3. INVESTMENTS:

Investment are stated at cost.

4. INVENTORIES:

inventories are valued at lower of cost or market value except unquoted Shares and securities, which are valued at cost. 5. MISCELLANEOUS EXPENDITURE

5.1 preliminary expenses are amortized equally over a period of ten years.

52 Deferred Revenue Expenditure comprising of expenditure towards advertisement and publicity for opening of Aversive Branch, launching of deposit scheme and registration fees & stamp duty for increase in authorized capital are amortized equally over period of five years.

5.3 Shares issue Expenditure are written off equally over a period of ten years.

6. Income & Expenditure :

6.1 Income from rental of lockers was collected in advance and accounted for on cash basis.

6.2 Bonus and Leave Encashment is accounted for on cash basis.

6.3 Interest on government Securities is accounted for on cash basis.

7. Contingent Liability :

Contingent Liabilities are determined on the basis of available information.