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SENSEX NIFTY India | Accounting Policy > Edible Oils & Solvent Extraction > Accounting Policy followed by Modi Naturals - BSE: 519003, NSE: N.A

Modi Naturals

BSE: 519003|ISIN: INE537F01012|SECTOR: Edible Oils & Solvent Extraction
Apr 25, 15:40
0.05 (0.06%)
Modi Naturals is not listed on NSE
Mar 15
Accounting Policy Year : Mar '16

Notes to financial statements for the year ended March 31, 2016

1. Corporate Information

Modi Naturals Limited is a Public Limited Company domiciled in India and Incorporated under the provisions of Companies Act, 1956. The shares of company are listed at Bombay Stock Exchange. The Company is in the business of manufacturing and marketing of oils and de-oiled cakes.

2. Summary of significant accounting policies

A. Basis of accounting

The financial statements are prepared under historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles in India and to comply with the Accounting Standards notified under relevant provisions of the Companies Act, 2013.

B. Inventory Valuation

i. Raw Materials, Consumables,

Packing Material, Baggase and Paddy Husk At weighted average cost

ii. Finished Goods At lower of average cost or net realizable value.

iii. Stores & Spares At cost on FIFO basis.

C. Fixed, Intangible Assets and Depreciation

i. Fixed Assets

At cost (including expenditure on installation where applicable) less accumulated depreciation.

ii. Intangible Assets

Computer Software and Website which are expected to provide future enduring economic benefits are capitalized as Intangible Asset and are stated at cost of acquisition less accumulated depreciation.

iii. Depreciation/Amortization

Depreciation on Fixed Assets is provided to the extent of depreciable amount on straight line method over the useful life of the asset as prescribed in Schedule II of the Companies Act, 2013.

Computer Software is amortized over 5 years on straight line method.

Website development expenses are amortized over 10 years on straight line method.

D. Research & Development

Revenue expenditure on Research and Development is charged to Revenue. Capital expenditure on Research and Development is included as part of fixed assets cost.

E. Borrowing Cost

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time as the asset is ready for its intended use or sale. All other borrowing costs are recognized as an expense in the period in which they are incurred.

F. Bonus

As per the provisions of the Payment of Bonus Act, 1965 to employees covered under that Act.

G. Employee Benefits

i. Provident Fund : On accrual. The company makes regular contributions to Provident & Other Funds which are charged to Revenue.

ii. Leave Encashment: Retirement benefits in respect of Leave encashment are not applicable since the company pays leave encashment to employees every year.

iii. Gratuity : Liability in respect of Gratuity to employees has been determined and accounted on the basis of actuarial valuation.

H. Revenue Recognition

i. Sales are recognized on delivery

ii. Interest : on accrual.

iii. Other Miscellaneous Revenues are recognized when the amounts are actually received or the reliability is certain.

I. Exchange Rate Fluctuation

Transactions in Foreign Currency are recognized at rates prevailing on the date of transactions.

Monetary foreign currency assets & liabilities remaining unsettled at the balance sheet date are translated at exchange rate prevailing on that date.

Gain/loss arising on account of realization/settlement of foreign currency transactions and on translation of foreign currency assets and liabilities are recognized in the Profit & loss account

J. Amortization of expenses for Amalgamation

Amortized over a period of five years.

K. Taxation

(i) Income Tax : Provision for Income Tax liability has been computed after taking into account allowable deduction under provisions of Income Tax Act, 1961.

(ii) Deferred Tax: Based on business prudence, is recognized, on timing difference, being difference between taxable and accounting income/ expenditure that originate in one period and are capable of reversal in one or more subsequent period.

L. Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years is recorded when there is an indication that impairment losses recognized for the asset no longer exists or has decreased.

M. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent Liabilities are not recognized but are disclosed, while Contingent Assets are neither recognized nor disclosed, in the financial statements.

N. Earnings per share

Basic earnings per share are computed by dividing the net profit/(loss) for the year attributable to the equity shareholders with the weighted average number of equity shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of equity and dilutive potential equity shares outstanding during the year, except where the results would be anti-dilutive.

O. Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are classified as operating leases. Lease rents under operating leases are recognized in the Profit and Loss Account.

P. Events occurring after the balance sheet date

Adjustment to assets and liabilities are made for events occurring after the balance sheet date that provide additional information materially affecting the determination of the amount of assets and liabilities relating to condition existing at the balance sheet date.

Q. Deferred Revenue Expenditure

Expenditure is accounted on accrual basis except in specific cases of expenditure incurred against which a definite benefit is expected to flow in to future periods. Such sums are treated as Deferred Revenue Expenditure and charged to Revenue Account over the expected duration of benefits.

R. Salaries and wages on repairs & maintenance of Fixed Assets, where carried out internally, are charged to salaries and wages account. Such expenses in respect of Capital Work have, however, been allocated and capitalized.

Source : Dion Global Solutions Limited
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