SENSEX NIFTY India | Accounting Policy > Abrasives > Accounting Policy followed by Wendt (India) - BSE: 505412, NSE: WENDT
Wendt (India)
BSE: 505412|NSE: WENDT|ISIN: INE274C01019|SECTOR: Abrasives
Nov 30, 16:01
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Nov 30, 16:01
10 (0.52%)
« Mar 14
Accounting Policy Year : Mar '15
 The financial statements of the Company have been 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) / Companies Act, 1956 (the 1956
 Act), as applicable. The financial statements have been prepared 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 27(10).
 The preparation of the financial statements in conformity with Indian
 GAAP requires the Management to make estimates and assumptions
 considered in the reported amounts of assets and liabilities (including
 contingent liabilities) and the reported income and expenses during the
 year. The Management believes that the estimates used in preparation of
 the financial statements are prudent and reasonable. Future results
 could differ due to these estimates and the differences between the
 actual results and the estimates are recognised in the periods in which
 the results are known / materialise.
 a) Finished Goods and work-in-progress are valued at lower of cost and
 net realizable value. Cost comprises of materials, labour, and an
 appropriate proportion of production overheads and excise duty,
 wherever applicable and excludes interest, selling and distribution
 expenses. Cost is computed on weighted average basis.
 b) Raw materials, stores and spares are valued at lower of cost and net
 realizable value. Cost computed on weighted average basis includes
 freight ,taxes and duties net of CENVAT / VAT credit, wherever
 The cash flows from operating, investing and financing activities of
 the Company are segregated based on the available information. Cash
 flows from operating activities are reported using the indirect method,
 whereby profit / (loss) before extraordinary items and tax is adjusted
 for the effects of transactions of non-cash nature and any deferrals or
 accruals of past or future cash receipts or payments.
 ''Fixed assets are carried at cost less accumulated depreciation /
 amortisation and impairment losses, if any. The cost of fixed assets
 comprises its purchase price net of any trade discounts and rebates,
 any import duties and other taxes (other than those subsequently
 recoverable from the tax authorities), any directly attributable
 expenditure on making the asset ready for its intended use, other
 incidental expenses and interest on borrowings attributable to
 acquisition of qualifying fixed assets up to the date the asset is
 ready for its intended use. Machinery spares which can be used only in
 connection with an item of fixed asset and whose use is expected to be
 irregular are capitalised and depreciated over the useful life of the
 principal item of the relevant assets. Subsequent expenditure on fixed
 assets after its purchase / completion is capitalised only if such
 expenditure results in an increase in the future benefits from such
 asset beyond its previously assessed standard of performance.
 Fixed assets acquired and put to use for project purpose are
 capitalised and depreciation thereon is included in the project cost
 till the project is ready for its intended use. Individual assets
 costing less than Rs.5,000 each are depreciated in full in the year of
 ''Fixed assets acquired in full or part exchange for another asset are
 recorded at the fair market value or the net book value of the asset
 given up, adjusted for any balancing cash consideration. Fair market
 value is determined either for the assets acquired or asset given up,
 whichever is more clearly evident. Fixed assets acquired in exchange
 for securities of the Company are recorded at the fair market value of
 the assets or the fair market value of the securities issued, whichever
 is more clearly evident.
 ''Fixed assets retired from active use and held for sale are stated at
 the lower of their net book value and net realisable value and are
 disclosed separately.
 Capital work-in-progress:
 Projects under which tangible fixed assets are not yet ready for their
 intended use are carried at cost, comprising direct cost, related
 incidental expenses and attributable interest.
 Capital Subsidy relating to projects in backward area is credited to
 capital subsidy reserve on receipt and Government grants relating to
 specific assets are deducted from the cost of such assets.
 Intangible Assets are amortized over a period of 5 years or based on
 the period of usage / licence, whichever is lower. The estimated useful
 life of intangible assets and the amortisation period are reviewed at
 the end of each financial year and the amortisation method is revised
 to reflect the changed pattern.
 Depreciation and amortisation
 Depreciable amount for assets is the cost of an asset, or other amount
 substituted for cost, less its estimated residual value.
 Depreciation on tangible fixed assets has been provided on the
 straight-line method as per the useful life prescribed in Schedule II
 to the Companies Act, 2013 except in respect of the used / Second hand
 machines & process bath equipments, in whose case the life of the
 assets has been assessed as under based on technical advice, taking
 into account the nature of the asset, the estimated usage of the asset,
 the operating conditions of the asset, past history of replacement,
 anticipated technological changes, manufacturers warranties and
 maintenance support, etc.
 Depreciation on assets added / disposed off during the year is provided
 on pro-rata basis from the month of addition or up to the month prior
 to the month of disposal, as applicable.
 a) Revenues are recognized and expenses are accounted on their accrual
 with necessary provisions for all known liabilities and losses. Revenue
 from Sale of goods is recognised on despatch of goods. Sales includes
 exicise duty but excludes sales tax / VAT, discounts and returns as
 b) Revenue from rendering of services priced on a time and material
 basis is recognised on rendering of services as per the terms of
 contracts with customers.
 c) Export Benefits under Advance licence scheme are recognized on
 accrual basis on completion of export obligation.
 d) Dividend income on investments is accounted for when the right to
 receive the payment is established.
 Interest income is recognised on a time proportion basis considering
 the underlying interest rate.
 Foreign currency transactions are recorded at the rates of exchange
 prevailing on the date of the transactions.  Monetary assets and
 liabilities outstanding at the year end are translated at the rate of
 exchange prevailing at the year end and the gain or loss is recognized
 in the Statement of Profit and Loss.
 Exchange differences arising on actual payments / realizations and year
 end restatements are also recognised in the Statement of Profit and
 Investments that are intended to be held for more than a year, from the
 date of acquisition, are classified as long-term investments and are
 carried at cost. However, provision for diminution is made in the value
 of investments, if such diminution is other than of temporary nature .
 Current investments are stated at lower of cost or fair value .
 Short term employee benefits including performance incentive and
 compensated absences which are expected to occur within 12 months after
 the end of the period in which the employee renders related service are
 determined as per Company''s policy and recognized as expense based on
 expected obligation on undiscounted basis.
 Accumulated Compensated absences which fall due beyond 12 months is
 provided for in the books on actuarial valuation basis at the year end
 using projected unit credit method.
 Superannuation fund, Provident fund and Pension fund are defined
 contribution plans towards which the company makes contribution at
 predetermined rates to the Superannuation Trust, and the Regional
 Provident Fund Commissioner respectively. The same is debited to the
 Statement of Profit and Loss based on the amount of contribution
 required to be made and when services are rendered by the employees.
 The Company also makes contributions to state plans namely Employee''s
 State Insurance Fund and Employee''s Pension Scheme 1995 and has no
 further obligation beyond making the payment to them.
 The liability for gratuity to employees as at the Balance sheet date is
 determined on the basis of actuarial valuation using Projected Unit
 Credit method. The amount is funded to a Gratuity fund administered by
 the trustees and managed by Life Insurance Corporation of India. The
 liability thereof is paid and absorbed in the statement of profit and
 loss at the year end. Actuarial Gains and losses arising during the
 year are recognised in the Statement of Profit and Loss immediately.
 Termination benefits are recognized as an expense as and when incurred.
 The accounting policies adopted for segment reporting are in line with
 the accounting policies of the Company
 with the following additional policies:
 a) Inter-segment revenues for this purpose are reported on the basis of
 prices charged to external customers.
 b) Revenue and expenses are identified to segments on the basis of
 their relationship to the operating activities of the segment. Revenue
 and expenses, which relate to the enterprise as a whole and not
 allocable to segments on a reasonable basis are included under Other
 un-allocable Expenditure net of un- allocable income.
 The basic earnings/ (loss) per share is computed by dividing the net
 profit attributable to equity shareholders for the year by the weighted
 average number of equity shares outstanding during the year. The number
 of shares used in computing diluted earnings per share comprises the
 weighted average shares considered for deriving basic earnings per
 share, and also the weighted average number of equity shares that could
 have been issued on the conversion of all dilutive potential equity
 Current tax is the amount of tax payable on the taxable income for the
 year as determined in accordance with the applicable tax rates and the
 provisions of the Income Tax Act, 1961 and other applicable tax laws.
 Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
 gives future economic benefits in the form of adjustment to future
 income tax liability, is considered as an asset if there is convincing
 evidence that the Company will pay normal income tax. Accordingly, MAT
 is recognised as an asset in the Balance Sheet when it is highly
 probable that future economic benefit associated with it will flow to
 the Company.
 Deferred tax is recognised on timing differences, being the differences
 between the taxable income and the accounting income that originate in
 one period and are capable of reversal in one or more subsequent
 periods.  Deferred tax is measured using the tax rates and the tax laws
 enacted or substantively enacted as at the reporting date. Deferred tax
 liabilities are recognised for all timing differences. Deferred tax
 assets are recognised for timing differences of items other than
 unabsorbed depreciation and carry forward losses only to the extent
 that reasonable certainty exists that sufficient future taxable income
 will be available against which these can be realised. However, if
 there are unabsorbed depreciation and carry forward of losses and items
 relating to capital losses, deferred tax assets are recognised only if
 there is virtual certainty supported by convincing evidence that there
 will be sufficient future taxable income available to realise the
 assets. Deferred tax assets and liabilities are offset if such items
 relate to taxes on income levied by the same governing tax laws and the
 Company has a legally enforceable right for such set off. Deferred tax
 assets are reviewed at each balance sheet date for their realisability.
 Revenue expenditure pertaining to research is charged to the Statement
 of Profit and Loss. Development costs of products are also charged to
 the Statement of Profit and Loss unless a product''s technical
 feasibility has been established, in which case such expenditure is
 capitalised. The amount capitalised comprises expenditure that can be
 directly attributed or allocated on a reasonable and consistent basis
 to creating, producing and making the asset ready for its intended use.
 Fixed assets utilised for research and development are capitalised and
 depreciated in accordance with the policies stated for Fixed Assets.
 The carrying values of assets / cash generating units at each balance
 sheet date are reviewed for impairment if any indication of impairment
 exists. The intangible assets are tested for impairment each financial
 year even if there is no indication that the asset is impaired.
 If the carrying amount of the assets exceed the estimated recoverable
 amount, an impairment is recognised for
 such excess amount. The impairment loss is recognised as an expense in
 the Statement of Profit and Loss, unless the asset is carried at
 revalued amount, in which case any impairment loss of the revalued
 asset is treated as a revaluation decrease to the extent a revaluation
 reserve is available for that asset.
 The recoverable amount is the greater of the net selling price and
 their value in use. Value in use is arrived at by discounting the
 future cash flows to their present value based on an appropriate
 discount factor.
 When there is indication that an impairment loss recognised for an
 asset (other than a revalued asset) in earlier accounting periods no
 longer exists or may have decreased, such reversal of impairment loss
 is recognised in the Statement of Profit and Loss, to the extent the
 amount was previously charged to the Statement of Profit and Loss. In
 case of revalued assets such reversal is not recognised.
 A provision is recognized when an enterprise has a present obligation
 as a result of past event, that can be estimated reliably and it is
 probable that an outflow of resources will be required to settle the
 obligation in respect of which a reliable estimate can be made.
 Provisions are not discounted to its present value and are determined
 based on best estimate required to settle the obligation at the balance
 sheet date.
 These are reviewed at each balance sheet date and adjusted to reflect
 the current best estimates. When no reliable estimate can be made, a
 disclosure is made as contingent liability and is disclosed by way of
 notes.  Contingent assets are not recognised in the financial
 All assets and liabilities are classified as current or non-current as
 per the Company''s normal operating cycle and other criteria set out in
 the Schedule III to the Companies Act, 2013. Normal operating cycle is
 based on the time between the acquisition of assets for processing and
 their realisation into cash and cash equivalents.
Source : Dion Global Solutions Limited
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