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
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VOLUME 5,463
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« Mar 14
Accounting Policy Year : Mar '15
 a) Basis of Accounting:
 The financial statements are prepared in accordance with the Generally
 Accepted Accounting Principles in India (Indian GAAP) to comply with
 the Accounting Standards specified under Section 133 of the Companies
 Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and
 the relevant provisions of the Companies Act, 2013 (the 2013 Act), as
 applicable. The financial statements have been prepared as a going
 concern on accrual basis under the historical cost convention. The
 accounting policies adopted in the preparation of the financial
 statements are consistent with those followed in the previous year
 except for change in the accounting policy for depreciation as more
 fully described in Note 28.
 b) Use of Estimates:
 The presentation of financial statements in conformity with generally
 accepted accounting principles (GAAP) requires management to 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
 (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
 d) Depreciation / Amortisation:
 As per the Schedule II of the Companies Act 2013, effective 1st April
 2014, the management has internally reassessed the useful lives to
 compute depreciation wherever necessary, to conform to the requirements
 of the Companies Act, 2013.
 Depreciation on Fixed Assets is provided:
 I.  For assets purchased on or before April 1, 2014.
 (i) Whose remaining useful life is completed as at 1st April 2014, the
 carrying value of fixed assets is reduced from the retained earnings as
 at said date.
 (ii) For remaining assets the carrying value of Fixed assets is
 depreciated equally over the balance useful life of the assets.
 II.  For assets other than covered under clause (I) above, on Straight
 Line Method as per Schedule II to the Companies Act, 2013.
 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
 (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 of goods 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 broker''s
 contract note.
 i) 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.
 j) Borrowing Costs :
 Borrowing Costs attributable to acquisition and construction of
 qualifying assets are capitalised 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.
 k) 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.
 l) 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 Entitlements: As determined on the basis of accumulated leave
 to the credit of the employees as at the year end as per the Company''s
 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 actuary
 m) 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 its 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.
 n) 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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