SENSEX NIFTY
Moneycontrol.com India | Accounting Policy > Abrasives > Accounting Policy followed by Wendt (India) - BSE: 505412, NSE: WENDT
YOU ARE HERE > MONEYCONTROL > MARKETS > ABRASIVES > ACCOUNTING POLICY - Wendt (India)
Wendt (India)
BSE: 505412|NSE: WENDT|ISIN: INE274C01019|SECTOR: Abrasives
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Oct 31, 17:00
1597.20
20.15 (1.28%)
VOLUME 221
LIVE
NSE
Oct 31, 17:00
1600.60
15.85 (1%)
VOLUME 65
« Mar 13
Accounting Policy Year : Mar '14
A    COMPANY OVERVIEW
 
 Wendt (India) Limited was incorporated on August 21st 1983 under the
 provisions of the Companies Act,1956, and is a joint venture between
 Wendt GmbH Germany and Carborundum Universal Limited, India. Wendt
 (India) Limited is a leading manufacturer of Super Abrasives, High
 precision Grinding, Honing and Special Purpose Machines and High
 Precision components. The Companys registered office is in Bangalore
 and factory is situated in Hosur, Tamilnadu.
 
 1 BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS:
 
 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 notified under
 Section 211(3C) of the Companies Act, 1956 (the 1956 Act) (which
 continue to be applicable in respect of Section 133 of the Companies
 Act, 2013 (the 2013 Act) in terms of General Circular 15/2013 dated
 13 September, 2013 of the Ministry of Corporate Affairs) and the
 relevant provisions of the 1956 Act/ 2013 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.
 
 2 USE OF ESTIMATES:
 
 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.
 
 3 INVENTORIES:
 
 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
 applicable.
 
 4 CASH FLOW STATEMENT:
 
 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.
 
 5 FIXED ASSETS, DEPRECIATION AND AMORTISATION:
 
 a) Fixed assets are stated at original cost (net of CENVAT / VAT
 wherever applicable) including expenses related
 
 to acquisition and installation. Borrowing costs are capitalized as
 part of qualifying fixed assets when it is possible that they will
 result in future economic benefits. Other borrowing costs are expensed.
 
 b) Capital work in progress is stated at the amount expended up to the
 balance sheet date and includes direct cost and related incidental
 expenses.
 
 c) 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.
 
 d) Depreciation is provided, on all depreciable assets, except
 intangible assets (refer (e) below), on a straight line basis at the
 rates prescribed under Schedule XIV of the Companies Act, 1956 .
 
 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.
 
 e) 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.
 
 f) Individual assets costing less than Rs.5,000 each are depreciated in
 full in the year of acquisition.
 
 6 REVENUE RECOGNITION:
 
 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
 applicable.
 
 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.
 
 7 FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION :
 
 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
 loss.
 
 8 INVESTMENTS:
 
 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.
 
 9 EMPLOYEE BENEFITS:
 
 SHORT -TERM EMPLOYEE BENEFITS
 
 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.
 
 LONG -TERM EMPLOYEE BENEFITS - COMPENSATED ABSENCES
 
 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.
 
 DEFINED CONTRIBUTION PLANS
 
 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.
 
 DEFINED BENEFIT PLAN
 
 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.
 
 10 SEGMENT REPORTING:
 
 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.
 
 11 EARNINGS / (LOSS) PER SHARE:
 
 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
 shares.
 
 12 TAXES ON INCOME :
 
 Income tax comprises the current tax provision and the net change in
 the deferred tax asset or liability during the year. Deferred tax
 assets and liabilities are recognized for the future tax consequences
 of timing differences between the carrying values of the assets and
 liabilities and their respective tax bases. Deferred tax assets are
 recognized subject to management''s judgment that realization is more
 likely than not.  Deferred tax assets and liabilities are measured
 using enacted tax rates or substantively enacted tax rates expected to
 apply to taxable income in the years in which the timing differences
 are expected to be received or settled.
 
 13 RESEARCH AND DEVELOPMENT:
 
 Revenue expenditure on research and development is charged as an
 expense in the year in which it is incurred.  Capital expenditure on
 Research and Development is included in fixed assets and depreciated in
 accordance with the depreciation policy of the Company.
 
 14 IMPAIRMENT OF ASSETS:
 
 At each balance sheet date, the carrying values of the tangible and
 intangible assets are reviewed to determine whether there is any
 indication that those assets have suffered an impairment loss. If any
 such indication exists, the recoverable amount of the asset is
 estimated in order to determine the extent of the impairment loss (if
 any).  Where there is an indication that there is a likely impairment
 loss for a group of assets, the Company estimates the recoverable
 amount of the group of assets as a whole, and the impairment loss is
 recognised.
 
 15 PROVISIONS AND CONTINGENCIES:
 
 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
 statements.
 
 16 OPERATING CYCLE:
 
 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 revised Schedule VI to the Companies Act, 1956. Normal operating
 cycle is based on the time between the acquisition of assets for
 processing and their realisation into cash and cash equivalents.
 
 Note 2 (iii)
 
 Rights, Preferences and Restrictions attached to shares
 
 The Company has only one class of equity shares with voting rights (one
 vote per share). The dividends proposed by the Board of directors is
 subject to approval of the shareholders in the ensuing Annual General
 Meeting. In the event of liquidation of the Company, the equity
 shareholders are entitled to receive only the residual assets of the
 Company. The distribution of dividend is in the proportion to the
 number of equity shares held by the shareholders.
 
 (a) Principal amount payable to Micro and Small Enterprises ( to the
 extent identified by the Company from available information and relied
 upon by the auditors) as at 31st March, 2014 is Rs.43.22 lacs (Previous
 year - Rs 32.94 lacs)
 
 (b) There are no dues to Micro and Small Enterprises as per The Micro,
 Small and Medium Enterprises Development Act 2006, which are
 outstanding for more than 45 days during the year and as at the Balance
 Sheet date.  The above information has been determined to the extent such 
 parties have been identified on the basis of information available with 
 the Company. This has been relied upon by the auditors.
Source : Dion Global Solutions Limited
Quick Links for wendtindia
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.