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Moneycontrol.com India | Accounting Policy > Textiles - Weaving > Accounting Policy followed by LS Industries - BSE: 514446, NSE: N.A
LS Industries
BSE: 514446|ISIN: INE345D01031|SECTOR: Textiles - Weaving
LS Industries is not traded in the last 30 days
LS Industries is not listed on NSE
Mar 10
Accounting Policy Year : Mar '11
1 (a). Basis of Preparation: -

The accounts are prepared on accrual basis under the historical cost convention in accordance with the applicable accounting Standards issued by the Institute of Chartered Accountants of India referred to in Section 211(3C) of the companies Act, 1956 and other relevant provisions of the Companies Act,1956.

(b). Use of Estimates: -

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date on the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the year in which results materialize.

2. Revenue recognition:-

(a) Sales:-

Sales comprise sale of goods, services and export incentives. Revenue from sale of goods is recognized:- i) When all the significant risk and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

(b) Benefit under Drawback Scheme:

Revenue in respect of drawback benefit is recognized on post export basis.

3. Fixed Assets: -

(a) Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises the purchase price and any attributable cost of bringing the assets to its working condition for its intended use.

(b) Capital work in progress comprises of outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the balance-sheet date.

4. Depreciation: -

(a) Depreciation on fixed assets is provided on Written down value method in accordance with and in the manner specified in schedule XIV to the Companies Act,1956.

(b) Depreciation on assets costingss5000 or below is charged @100% per annum on proportionate basis.

5. Investments

Long-term investments are stated at cost. Provision for diminution, if any, in the value of each long-term investment is made to recognize a decline, other than of a temporary nature. Current investments are stated at lower of cost or market value.

6. Borrowing costs

Borrowing cost that is directly attributable to the acquisition or construction of a qualifying asset is considered as part of the cost of the asset. All other borrowing costs are treated as period cost and charged to the profit and loss account in the year in which incurred.

7. Impairment of assets

The Company assesses at each Balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account.

8. Operating Leases: -

Lease arrangements where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor, are recognized as operating lease. Operating lease payments are recognized as an expense in the profit & loss account on a straight-line basis over the lease term.

9. Inventories: -

The inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of the various item of inventory is computed as under:

- In case of raw material, at weighted average cost.

- In case of work-in-process, at raw material cost plus conversion cost, depending upon the stage of completion. o In case of finished goods, at raw material cost plus conversion cost, packing cost and other overheads incurred to bring the goods to their present location & condition. o In case of stores & spares, at weighted average cost. o In case of traded goods, at first-in-first-out basis. o In case of waste & scrap , at net realizable value.

10. Employee benefits:-

(a) The company's contribution to Employees Provident Fund is charged to revenue on accrual basis.

(b) The company has Defined Benefit plans namely Leave Encashment and Gratuity for all employees, the liability for which is determined on the basis of an actuarial valuation at the end of the year.

11. Foreign Currency transaction:-

(a) Initial Recognition:

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

(b) Conversion:

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

(c) Exchange Differences:

Exchange differences arising on the settlement of monetary items except fixed assets or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise. Exchange differences relating to acquisition of imported fixed assets are adjusted in the carrying cost of the fixed assets.

12. Accounting for Taxes on Income:-

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current tax is the aggregate amount of income tax determined to be payable in respect of taxable income for a period. Deferred tax is the tax effect of timing difference between taxable income & accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

13. Segment Disclosure: -

Segment Information is prepared in conformity with the accounting policies adopted for preparing and presenting the Financial Statements of the enterprise as a whole in line with Accounting Standard - 17.

14. Earning per share: -

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period for the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

15. Provisions, Contingent Liabilities and Contingent Assets: -

(a) Provisions are recognized only when there is a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

(b) A disclosure for a contingent liability is made when there is a possible obligation or present obligation that may, but probably will not, require an outflow of resources.

(c) Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

Source : Dion Global Solutions Limited
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