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Vamshi Rubber
BSE: 530369|ISIN: INE380C01014|SECTOR: Rubber
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« Mar 12
Accounting Policy Year : Mar '13
a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
 
 i) The financial statements are prepared under the historical cost
 convention in accordance with the generally accepted accounting
 principles in India, the applicable Accounting Standards issued by the
 Institute of Chartered Accountants of India and relevant presentational
 requirements of the Companies Act, 1956.
 
 ii) Accounting policies not specifically referred to otherwise are in
 consonance with prudent accounting principles.
 
 iii) All income and expenditure items having material bearing on the
 financial statements are recognized on accrual basis.
 
 b) FIXED ASSETS
 
 Fixed Assets are stated at acquisition cost (Net of Modvat / cenvat, if
 any) including directly attributable cost of bringing them to their
 respective working conditions for the intended use less accumulated
 depreciation. All costs, including financing/borrowing cost till
 commencement of commercial production attributable to the fixed assets
 have been capitalized.
 
 C) REVENUE RECOGNITION
 
 All revenue income and expenditure are recognized on accrual concept of
 accounting.
 
 Sale of Precured Tread Rubber
 
 Revenue is recognized when significant risks and rewards of ownership
 of goods have passed to the buyer and is disclosed including Excise
 Duty and Sales tax and excluding returns, as applicable.
 
 Interest
 
 Interest income is recognized on a time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 d) DEPRECIATION
 
 Depreciation on fixed assets has been provided on straight-line method
 at the rates specified in Schedule XIV of the Companies Act, 1956 on
 pro-rata basis.
 
 e) INVENTORIES
 
 Inventories are valued at lower of cost or net realizable value. Cost
 is determined using FIFO method.
 
 f) FOREIGN CURRENCY TRANSACTIONS
 
 Transactions denominated in foreign currencies are normally recorded at
 the exchange rate prevailing at the time of the transaction.
 
 Forward contracts for hedging: The company uses foreign exchange
 forward contracts to hedge its exposure to movements in foreign
 exchange rates. The use of these foreign exchange forward contracts
 reduces the risk or cost to the company and the company does not use
 the foreign exchange forward contracts for speculation purposes.
 
 The premium arising at the inception of such a forward exchange
 contract be amortized as expense over the life of the contract.
 
 g) INVESTMENTS
 
 Investments made by the company are primarily of long term nature and
 are value at cost. Provision will be made for decline, other than
 temporary, in the value of investments.
 
 h) BORROWING COSTS
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use. All other
 borrowing cost are charged to revenue.
 
 i) EMPLOYEE BENEFITS
 
 Gratuity: Liability towards gratuity is provided on the basis of
 actuarial valuation made by an independent actuary.
 
 Provident Fund: Contributions paid to the prescribed authority are
 charged to revenue every year.
 
 Leave Encashment: is at the discretion of the management and is charged
 to revenue in the year of payment.
 
 j) EARNING PER SHARE
 
 The Company reports its Earnings per Share (EPS) in accordance with
 Accounting Standard 20 issued by the Institute of Chartered Accountants
 of India.
 
 k) TAXES ON INCOME
 
 The current charge for income tax is calculated in accordance with the
 relevant tax regulations applicable to the company.
 
 Deferred tax asset and liability is recognized for future tax
 consequences attributable to the timing differences that result between
 the profit offered for income tax and the profit as per the financial
 statements. Deferred tax asset & liability are measured as per the tax
 rates / laws that have been enacted or substantively enacted by the
 Balance Sheet date.
 
 I) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as result of past
 events and it is probable that there will be an outflow of resources.
 Contingent Liabilities are not recognized but are disclosed in the
 Notes. Contingent Assets are neither recognized nor disclosed in the
 financial statements.
Source : Dion Global Solutions Limited
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