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Kokuyo Camlin
BSE: 523207|NSE: KOKUYOCMLN|ISIN: INE760A01029|SECTOR: Diversified
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Accounting Policy Year : Mar '14
A.  Basis of Preparation of Financial Statements:
 
 The Financial Statements are prepared under the historical cost
 convention, in accordance with the Indian Generally Accepted Accounting
 Principles and the provisions of Companies Act, 1956.  All Income and
 Expenditure having a material bearing in the Financial Statements are
 recognized on accrual basis.
 
 B.  Use of Estimates:
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of financial statements and the reported amount
 of revenues and expenses, during the reported period. Difference
 between the actual results and estimates are recognized in the period
 in which the results are known/ materialized.
 
 C.  Fixed Assets:
 
 i. Fixed Assets are recorded at cost of acquisition or construction and
 they are stated at historical cost (net of Cenvat and Vat). Interest on
 project loans and all direct expenses attributable to acquisition of
 Fixed Assets are capitalised, upto the date of installation.
 Capitalised hardware/ software costs of Enterprise Resource Planning
 (ERP) System include cost of designing software, which provides
 significant future economic benefits over an extended period. The cost
 comprises of license fee, cost of system integration and initial
 customization. The costs are capitalised in the year in which the
 relevant system is ready for intended use. The up gradation/enhancements
 are also capitalised and assimilated with the initial capitalisation
 cost.
 
 ii. In compliance with Accounting Standard (AS) 28 – Impairment of
 Assets issued by the Institute of Chartered Accountants of India
 (ICAI), the Company assesses at each Balance Sheet date whether there
 is any indication that any asset may be impaired. If any such
 indication exists, the recoverable amount of the asset is estimated.
 Impairment loss is recognised wherever carrying amount exceeds the
 recoverable amount.
 
 iii. Depreciation on all assets of the Company except leasehold land,
 is provided on Straight Line basis as applicable under the Companies
 Act, 1956. Leasehold land is amortised over respective period of lease.
 Cost of Intellectual Property Rights is amortised on Straight Line
 Method over the useful life of 36 months as estimated by the
 Management. Capitalised Hardware/Software costs of ERP are amortised
 over the estimated useful economic life not exceeding fve years.
 
 D.  Investments:
 
 Long-term investments are stated at cost and provision is made when
 there is decline, other than temporary, in the value thereof. Current
 investments are stated at cost or fair value whichever is lower.
 
 F.  Excise Duty:
 
 Excise duty on finished goods manufactured is accounted on clearance of
 goods from factory premises and also in respect of year end stocks in
 bonded warehouse. CENVAT credit is accounted by adjustment against cost
 immediately upon receipt of the relevant input. Input credit not
 recoverable is charged to the Statement of Profit and Loss.
 
 G.  Foreign Currency Transactions:
 
 i. Transactions in foreign currencies are recorded at the exchange
 rates prevailing on the date of transaction. Foreign currency assets
 and liabilities are translated at year end exchange rates.  Exchange
 difference arising on settlement of transactions and translation of
 monetary items are recognised as income or expense in the year in which
 they arise.
 
 ii. In respect of forward exchange contracts the difference between the
 forward rate and the exchange rate at the inception of contract is
 recognised as income or expense over the period of the contract.
 
 iii. Gains or losses on cancellation/settlement of forward exchange
 contracts are recognised as income or expense.
 
 H.  Research and Development:
 
 Revenue expenditure incurred on Research and Development is charged to
 Statement of Profit and Loss for the year. Capital expenditure on
 Research and Development is accounted as Fixed Assets.
 
 I.  Employee Benefits:
 
 i. Short-term employee benefits are recognised as an expense at the
 undiscounted amount in the Statement of Profit and Loss of the year in
 which the related service is rendered.
 
 ii. Post employment and other long-term employees benefits are
 recognised as an expense in the Statement of Profit and Loss for the
 year in which the employee has rendered the service.  The expense is
 recognised at the present value of the amount payable determined using
 actuarial valuation techniques. Actuarial gains and losses in respect
 of post employment and other long-term benefits are charged to the
 Statement of Profit and Loss for the year.
 
 J.  Revenue/Expense Recognition:
 
 i. Revenue from sale of goods is accounted for on the basis of dispatch
 of goods. Sales are inclusive of excise duty and net of sales
 returns/Trade Discount.
 
 ii. Revenue in respect of overdue interest, insurance claim, etc is
 recognized to the extent the Company is reasonably certain of its
 ultimate realisation.
 
 iii. Remission from Excise Duty paid in respect of clearance from Jammu
 Plant is recognised as revenue based on legal advice obtained by the
 Company [Refer Note No. 18].
 
 iv.  Expenses are accounted for on accrual basis.
 
 v. Provisions are recognised when a present legal or constructive
 obligation exists and the payment is probable and can be reliably
 estimated.
 
 vi. Lease Rentals in respect of assets taken on operating lease are
 charged to the Statement of Profit and Loss on straight line basis over
 the lease term.
 
 K.  Government Grants:
 
 i.  Where the grants are of the nature of promoters'' contribution with
 reference to total investment in the undertaking or total capital
 outlay, they are treated as capital reserve.
 
 ii.  Grants related to specific  fixed assets are deducted from the book
 value of the related asset.
 
 iii.  Grants related to revenue are credited to the Statement of Profit
 and Loss and presented as income from operations.
 
 L.  Borrowing Cost:
 
 Borrowing cost attributable to acquisition of qualifying fixed assets
 which takes substantial period of time to get ready for its intended
 use is capitalised as part of the cost of such fixed assets. All other
 borrowing costs are charged to revenue.
 
 M. Contingent Liabilities:
 
 Liabilities are disclosed by way of Notes appended to the Balance Sheet
 in case there is an obligation that probably may not require cash
 outflow.
 
 N.  Accounting for Taxes on Income:
 
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the period. Deferred tax is recognised, subject to
 the consideration of prudence, in respect of deferred tax assets, on
 timing differences, being the differences between taxable income and
 accounting income that originated in one period and are capable of
 reversal in one or more subsequent periods.
 
 O.  Earnings per share:
 
 The Company reports basic and diluted earnings per share in accordance
 with Accounting Standard (AS) 20 on Earning per share issued by the
 Institute of Chartered Accountants of India (ICAI).Basic earnings per
 equity share is computed by dividing net income by weighted average
 number of equity shares outstanding for the period. Diluted earnings
 per equity share is computed by dividing net income by the weighted
 average number of equity shares outstanding including shares pending
 allotment.
 
 P.  Segment Reporting – Basis of Information:
 
 As the entire operations of the Company relate to products categorized
 under ''Consumer Products'' as the single primary reportable segment, no
 separate segment reporting is required under Accounting Standard (AS)
 17 issued by the Institute of Chartered Accountants of India (ICAI).
 
 (i) Terms/rights attached to equity shares
 
 The Company has only one class of equity shares with a par value of Rs.
 1/- per share. Each holder of equity share is entitled to one vote per
 share.
 
 (ii) On September 2nd, 2013 the Company pursuant to its rights issue of
 equity shares allotted 312,83,831 Equity Shares of face value of Rs. 1/-
 each to the eligible equity shareholders in the ratio of 14 equity
 shares for every 29 equity shares held on the record date i.e. August
 2nd, 2013 at a price of Rs. 33/- per share (inclusive of Share Premium of
 Rs. 32/- per share). The aggregate amount collected pursuant to the
 rights issue was Rs. 10,323.66 lacs. The aforesaid rights shares were
 listed on NSE and BSE and the Company received trading approval on
 September 5th, 2013.
Source : Dion Global Solutions Limited
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