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NOTES ON THE FINANCIAL STATEMENTS
VST Industries Limited
1. SIGNIFICANT ACCOUNTING POLICIES
Accelerated depreciation is provided based on technical
BASIS OF PREPARATION OF ACCOUNTS
evaluation of estimated useful life of an asset. All assets costing
The financial statements have been prepared on the basis of
less than 75,000 are fully depreciated in the year of
going concern, under the historic cost convention, except for
purchase.
certain, tangible assets which are being carried at revalued
Depreciation on the revalued assets is calculated on the
amounts. These financial statements have been prepared to
evalued costs and the Revaluation Reserve is adjusted with
comply in all material aspects with applicable accounting
the difference between the depreciation calculated on such
principles in India, the applicable Accounting standards
revalued costs and historic costs.
notified under Section 211 (3C) of the Companies Act, 1956
("the Act") and the relevant provisions of the Act.
INTANGIBLE ASSETS
USE OF ESTIMATES
Intangible assets are stated at cost net of accumulated
amortisation and accumulated impairment loss, if any.
The preparation of financial statements, require estimates and
Computer software (including license fees and cost of
assumptions to be made that affect the reported amounts of
Implementation/ system integration services) is capitalised
assets and liabilities as on the date of the financial statements
where it is expected to provide future enduring economic
and reported amount of revenues and expenses during the
benefits. Cost of upgradation/enhancements is charged off
reported period. The estimates made are based on the
as revenue expenditure unless they bring similar significant
principles of prudence and reasonableness, however, actual
additional benefits. Intangible assets are amortised on a
results could differ from these estimates. Any revision to such
accounting estimates is recognised prospectively in the current
straight line basis over their estimated useful life. Useful life is
determined based on the period of the underlying contract
and future periods.
and the period of time the intangible asset is expected to be
FIXED ASSETS
used i.e.
TANGIBLE ASSETS
Rights on time share - over 20 years
Tangible assets are stated at historical cost, net of accumulated
Computer software - over 4 years
depreciation and accumulated impairment loss, if any, except
so far as they relate to the revaluation of land and buildings.
IMPAIRMENT OF ASSETS
Historical cost is inclusive of freight, installation cost, duties
All the fixed assets are assessed for any indication of
and taxes, interest on specific borrowings utilised for financing
impairment, at the end of each financial year. On such
the assets and other incidental expenses.
indication, the impairment loss, being the excess of carrying
Depreciation is provided on plant and machinery on straight
value over the recoverable value of the assets, is charged to
line basis at the rates specified in Schedule XIV of the Act.
the statement of profit and loss in the respective financial
On other assets, depreciation is provided on straight line basis
years. The impairment loss recognised in the prior years is
at rates determined based on estimated useful life of assets.
reversed in cases where the recoverable value exceeds the
Such rates adopted being higher than the Schedule XIV rates
carrying value, upon re-assessment in the subsequent years.
as given below:
INVESTMENTS
Rate of Depreciation %
Long term investments are valued at cost net of provision, for
Buildings Freehold
permanent diminution, if any. Current investments are stated
Leasehold Property
5
at lower of cost and net realisable value.
Furniture and Fixtures
15 - 25
INVENTORIES
Office Equipment
15 - 25
Inventories are valued at lower of cost and net realisable
Motor Vehicles etc.
25
value. Cost is computed on weighted average method. Cost
Annual Report 201 1-12
45
Source: https://www.industrydocuments.ucsf.edu/docs/tybx0223

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