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Tainwala Chemicals and Plastics (India)

BSE: 507785|NSE: TAINWALCHM|ISIN: INE123C01018|SECTOR: Plastics
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Mar 15
Accounting Policy Year : Mar '16

M/s. TAINWALA CHEMICALS AND PLASTICS (INDIA) LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2016 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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.

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 recognized prospectively.

c) Fixed Assets:

(i) Fixed assets are capitalized 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 / Amortization:

(i) Depreciation on Tangible Assets is provided on straight line method, at the rates determined with reference to useful lives specified in Schedule II of the Companies Act, 2013, except for the carrying values of Tangible Fixed Assets as on 1st April, 2014 which are depreciated equally over the remaining useful life of the asset.

(ii) Intangible Assets are being amortized over a period of three years.

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 realizable value. Cost is computed on FIFO basis.

(ii) Finished goods and stock-in-process are valued at lower of cost and net realizable value. Cost for this purpose includes 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 of goods is recognized on dispatch of material and when risk and reward are transferred to the customers.

Revenue from sale of shares is recognized 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 recognized 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 capitalized 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 recognized in the Statement of Profit and Loss. Nonmonetary 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 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 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 recognized 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

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