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Binny
BSE: 514215|ISIN: INE118K01011|SECTOR: Textiles - Spinning - Cotton Blended
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« Mar 13
Accounting Policy Year : Mar '14
1.1 Basis of Accounting
 
 (a) The financial statements of the Company have been prepared under
 the historical cost convention in accordance with the Accounting
 standards specified by Companies (Accounting Standards) Rules, 2006
 issued by the Central Government and the relevant provisions of the
 Companies Act, 1956 as amended upto the date and the Rules and
 Regulations made thereunder.
 
 (b) All financial transactions have been recognized on accrual basis.
 The preparation of financial statements in conformity with the GAAP
 requires that the management makes estimates and assumptions that
 affect the reported amounts of assets and liabilities, disclosure of
 contingent liabilities as at the date of the financial statements and
 the reported amounts of revenue and expenses during the reported
 period. The Management believes that the estimates used in the
 preparation of the financial statements are prudent and reasonable.
 Future results could differ from those estimates.
 
 1.2 Use of Estimates
 
 In preparation of financial statements conforming to GAAP requirements
 certain estimates and assumptions are essentially required to be made
 with respect to items such as provision for doubtful debts, future
 obligations under employee retirement benefit plans, income taxes and
 the useful life period of Fixed Assets. Due care and diligence have
 been exercised by the Management in arriving at such estimates and
 assumptions since they may directly affect the reported amounts of
 income and expenses during the year as well as the balances of Assets
 and Liabilities including those which are contingent in nature as at
 the date of reporting of the financial statements.
 
 To comply with GAAP requirements relating to impairment of assets, if
 any, the Management periodically determines such impairment using
 external and internal resources for such assessment. Loss, if any,
 arising out of such impairment is expensed as stipulated under the GAAP
 requirements. Contingencies are recorded when a liability is likely to
 be incurred and the amount can be reasonably estimated. To this extent
 the results may differ from such estimates.
 
 1.3 Revenue Recognition
 
 As a consistent practice, the Company recognizes revenues on accrual
 basis. Revenue from rental income is recognised on accrual basis as per
 the agreements entered. Revenue from dividend is recognised upon right
 to receive the dividend is established. Interest income is recognized
 on time proportion basis taking into account the amount outstanding and
 rate applicable.
 
 1.4 Fixed Assets
 
 Fixed Assets are stated at the cost of acquisition less accumulated
 depreciation. The cost of acquisition includes taxes, duties, freight
 and other incidental expenses related to the acquisition and
 installation of the respective assets.
 
 1.5 Depreciation
 
 Depreciation is provided on straight-line method at the rates
 prescribed under Schedule XIV of the Companies Act, 1956 or based on
 the remaining estimated economic useful lives determined by the
 management whichever is higher.
 
 1.6 Impairment
 
 All the fixed assets are assessed for any indication of impairment at
 the end of each financial year. On such indication, the impairment loss
 being the excess of carrying value over the recoverable value of the
 assets, are charged to the Statement of Profit and Loss in the
 respective financial years. The impairment loss recognized in the prior
 years is reversed in cases where the recoverable value exceeds the
 carrying value, upon reassessment in the subsequent years.
 
 1.7 Investments
 
 Long-term investments are stated at cost, less diminution other than
 temporary in the value of such investments, if any. Current investments
 are valued at cost or market value which ever is lower.
 
 1.8 Inventories
 
 Inventories primarily constitute land and related development
 activities, which is valued at lower of cost or Net Realizable Value.
 Cost comprises of all expenses incurred for the purpose of acquisition
 of land, development of the land and other related direct expenses.
 
 1.9 Employee Benefits Gratuity
 
 The liability as at the Balance Sheet date is provided for based on the
 actuarial valuation carried out in accordance with revised Accounting
 Standard 15 (Revised 2005) on Employee Benefits as at the end of the
 period. Actuarial Gains/Losses are recognized immediately in statement
 of Profit & Loss.
 
 Leave Encashment
 
 Leave encashment is paid for in accordance with the rules of the
 Company and provided based on an actuarial valuation as at the balance
 sheet date. Actuarial Gains/Losses are recognized immediately in
 statement of Profit & Loss.
 
 Other Benefit Plans
 
 Contributions paid/ payable under defined contribution plans are
 recognized in the statement of Profit and Loss in each year.
 Contribution plans primarily consist of Provident Fund administered and
 managed by the Government of India. The company makes monthly
 contributions and has no further obligations under the plan beyond its
 contributions.
 
 1.10 Taxes on Income
 
 (i) Provision for current tax is made for the amount of tax payable in
 respect of taxable income for the year under Income Tax Act, 1961.
 
 (ii) Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. Deferred
 tax assets are recognised only to the extent that there is reasonable
 certainty that sufficient future taxable income will be available
 against which such deferred tax assets can be realised. In situations
 where the company has unabsorbed depreciation or carry forward tax
 losses, deferred tax assets are recognised only if there is virtual
 certainty supported by convincing evidence that such deferred tax
 assets can be realised against future taxable profits.
 
 1.11 Earnings Per Share
 
 The earnings considered for ascertaining the Company''s Earnings Per
 Share comprises the net profit after tax. The number of shares used in
 computing Basic EPS is the weighted average number of shares
 outstanding during the period. The number of shares used in computing
 diluted EPS comprises the weighted average shares considered for
 deriving basic EPS, and also the weighted average number of equity
 shares that would be issued on the conversion of all dilutive potential
 equity shares.
 
 1.12 Borrowing Cost
 
 Expenditure on borrowing cost on the loans obtained specifically for
 acquisition, construction or production of qualifying assets are
 capitalized as part of the cost of that asset. All other borrowing
 costs are charged to statement of profit and loss.
 
 1.13 Foreign Currency Transactions
 
 Foreign currency transactions are translated at the exchange rates
 prevailing on the respective date of transactions.
 
 Assets and Liabilities outstanding in foreign currency as on the date
 of the Balance Sheet are translated at exchange rates prevailing as on
 the last day of the relevant financial year. Differences rising out of
 such translations are charged to the statement of profit and loss.
 
 1.14 Leases
 
 The assets purchased under hire purchase agreements are included in the
 Fixed Assets block. The value of the asset purchased is capitalized in
 the books. A liability for the same amount is created at the time of
 entering into the agreement. The payments are made to the HP vendors as
 per the EMI''s given in the hire purchase agreements. The finance
 charges are debited to the statement of profit and loss and the
 principal amount is adjusted against the liability created for the
 vendor.
 
 1.15 Cash Flow Statement
 
 The Cash flow statement is prepared under the indirect method as per
 Accounting Standard 3 Cash Flow Statements.
 
 1.16 Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions are recognized when the Company has an obligation as a
 result of past events and it is probable that an outflow of resources
 will be required to settle the obligation and the amount can be
 reliably estimated. Obligations are assessed on an ongoing basis and
 only those having a largely probable outflow of resources are provided
 for.
 
 Contingent Liabilities are recognized only when there is a possible
 obligation arising from past events due to occurrence or non-occurrence
 of one or more uncertain future events not wholly within the control of
 the Company or where any present obligation cannot be measured in terms
 of future outflow of resources or where a reliable estimate of the
 obligation cannot be made.
Source : Dion Global Solutions Limited
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