SENSEX NIFTY India | Accounting Policy > Plastics > Accounting Policy followed by Tainwala Chemicals and Plastics (India) - BSE: 507785, NSE: TAINWALCHM
Tainwala Chemicals and Plastics (India)
BSE: 507785|NSE: TAINWALCHM|ISIN: INE123C01018|SECTOR: Plastics
Jan 30, 16:30
1.4 (5.97%)
VOLUME 2,050
Jan 30, 16:30
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« Mar 12
Accounting Policy Year : Mar '13
a) General:
 (i) The financial statements are prepared in compliance with all
 material aspects of the Accounting Standards notified under Companies
 (Accounting Standards) Rules, 2006 by the Central Government of India
 and the relevant provisions of the Companies Act, 1 956.  (ii) The
 financial statements are prepared on the basis of historical cost
 convention, and on the accounting principles of a going concern.  (iii)
 All expenses and income to the extent ascertainable with reasonable
 certainty are accounted for on accrual basis.
 b) Use of Estimates:
 The presentation of financial statements in conformity with generally
 accepted accounting principles (GAAP) requires management make
 estimates and assumptions that affects the reported amounts of assets
 and liabilities and the disclosures of contingent liabilities on the
 date of financial statements and reported amounts of revenue and
 expenses for that year. Actual results could differ from those
 estimates. Any revision to accounting estimates is recognised
 c) Fixed Assets:
 (i) Fixed assets are capitalised at cost inclusive of freight, duties,
 taxes and all incidental expenses related thereto and net of cenvat
 credit.  (ii) Pre-operative expenses incurred during construction
 period are allocated to various assets in proportion to their capital
 cost.  (iii) Fixed assets are stated at cost less accumulated
 depreciation thereon.
 d) Depreciation / Amortisation:
 (ii) Premium on leasehold land is being amortised over the period of
 lease.  OD Depreciation on fixed assets is provided on straight-line
 method at the rates and in the manner as specified in Schedule XIV to
 the Companies Act, 1 956.  (iii) Continuous Process Plant as defined
 in the said Schedule, has been considered on technical assessment and
 depreciation provided accordingly.
 e) Investments:
 Long-term investments are stated at cost of acquisition less provision
 for permanent diminution in the value of such investments determined
 for each investment individually. Current investments are valued at
 lower of cost and fair value.
 f) Inventories:
 (i) Raw materials are valued at lower of cost and net realisable value.
 Cost is computed on FIFO basis.
 (ii) Finished goods and stock-in-process include estimated cost of
 conversion and other costs incurred in bringing the inventories to
 their present location and condition.  (iii) Stores and spares are
 charged to consumption in the year of procurement.  (iv) Valuation of
 stock in trade of shares is carried out at lower of its cost and quoted
 market price, computed scrip wise. Cost is ascertained on FIFO basis.
 g) Operating Cycle:
 Assets and Liabilities have been classified in to current and
 Non-Current based on the Operating Cycle.
 h) Revenue Recognition:
 Revenue from sales is recognised on dispatch of material and when risk
 and reward are transferred to the customers.  Revenue from sale of
 shares is recognised on the basis of brokers contract note. -
 i) Equity Derivative Transactions:
 Profit / loss in respect of the contracts for equity index options
 and/or commodity futures are accounted in the statement of profit and
 loss on the expiry of the respective contract or on the same being
 squared-off.  In case of unsettled contracts for equity index options
 as at the balance sheet date, mark-to-market position is recognised in
 case of losses and ignored in case of profits, considering conservative
 j) Accounting for Taxes on Income:
 Provision for taxation comprises of current tax and deferred tax.
 Current tax represents tax on Profits for the current year as
 determined as per the provisions of the Income Tax Act, 1961.
 The deferred tax for timing differences between the book and tax
 profits for the year are accounted based on tax rates in force and tax
 laws that have been enacted or substantively enacted as of the balance
 sheet date. Deferred tax assets arising from timing differences, are
 recognised to the extent there is reasonable / virtual certainty that
 these would be realized in future and are reviewed for the
 appropriateness of their respective carrying values at each balance
 sheet date.
 k) Borrowing Costs:
 Borrowing Costs attributable to acquisition and construction of
 qualifying assets are captalised as a part of the cost of such asset up
 to the date when such asset is ready for its intended use. Other
 borrowing costs are charged to the Statement of Profit and Loss.
 I) Transactions in Foreign Currency:
 Foreign currency transactions are recorded at the exchange rates
 prevailing on the date of such transactions.  Monetary assets and
 liabilities as at the Balance Sheet date are translated at the rates of
 exchange prevailing at the date of the Balance Sheet. Gains and losses
 arising on account of differences in foreign exchange rates on
 settlement/ translation of monetary assets and liabilities are
 recognised in the Statement of Profit and Loss. Non-monetary foreign
 currency items are carried at cost.
 m) Retirement Benefits:
 Liability in respect of retirement benefits is provided and charged to
 the Statement of Profit and Loss on accrual basis as follows:
 a) Provident / Pension Funds: At a specified percentage of salary /
 wages for eligible employees.
 b Leave Encashment: As determined on the basis of accumulated leave to
 the credit of the employees as at the year end as per the Company''s
 rules.  c) Gratuity is provided in accordance with the provisions of
 Accounting Standard (AS) - 15 Employee Benefits on the basis of
 actuarial valuation carried out as at year end by an independent
 n) 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 management estimates the recoverable amount of the asset.
 If such recoverable amount of the asset is less than its carrying
 amount, the carrying amount is reduced to ts recoverable amount. The
 reduction is treated as an impairment loss and recognised in the
 Statement of Profit and Loss. If at the balance sheet date there is an
 indication that if a previously assessed impairment loss no longer
 exists, the recoverable amount is reassessed and the asset is reflected
 at the recoverable amount subject to a maximum of depreciated
 historical cost.
 o) Accounting for Provisions and Contingent Liabilities:
 The Company creates a provision when there is a present obligation as a
 result of a past event that probably requires an outflow of resources
 and a reliable estimate can be made of the amount of the obligation. A
 disclosure for a contingent liability is made when there is a possible
 obligation or a present obligation that may, but probably will not,
 require an outflow of resources.
Source : Dion Global Solutions Limited
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