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SENSEX NIFTY India | Accounting Policy > Castings & Forgings > Accounting Policy followed by Carnation Industries - BSE: 530609, NSE: N.A

Carnation Industries

BSE: 530609|ISIN: INE081B01010|SECTOR: Castings & Forgings
Nov 11, 16:00
-0.38 (-5%)
VOLUME 1,605
Carnation Industries is not listed on NSE
Mar 14
Accounting Policy Year : Mar '15
 A. Accounting Convention
 The accounts are prepared on accrual basis under the historical cost
 convention in accordance with the provisions of the Companies Act 2013
 (''Act'') and mandatory accounting standards as prescribed under section
 133 of the Act read with Rule, 7 of the Companies (Accounts) Rules 2014
 except otherwise stated.
 All assets and liabilities have been classified as current or
 non-current as per the company''s normal operating cycle and other
 criteria set out in the Schedule-Ill to the Companies Act, 2013 based
 on the time taken between the acquisition of the assets for processing
 and their realisation in cash and cash equivalents and the nature of
 other receivables, the company expects its operating cycle as 12 months
 for the purpose of current and non-current classification of assets and
 B. Fixed Assets
 Fixed assets are stated at cost less accumulated depreciation. The cost
 represents the cost of acquisition inclusive of duties & taxes which
 are not recoverable, incidental expenses, erection / commissioning
 expenses and interest etc. upto the date the assets is put to use.
 Software expected to provide future enduring economic benefits is
 stated at cost less amortization. All upgradation / enhancements are
 charged off as revenue expenditure unless they bring significant
 additional benefits.
 C. Depreciation/Amortisation
 i) Depreciation on tangible assets is provided on the straight line
 method over the useful lifes of assets as specified in the schedule II
 to the Companies Act 2013.
 ii) Depreciation on fixed assets added / disposed off during the year
 is provided on prorata basis.
 iii) Assets having useful life of less than 12 months are fully charged
 to revenue in the year of purchase.
 iv) Intangible Assets -
 Computer Software is normally amortised over its useful life of 3 years
 as estimated by the management. Computer Software acquired but not
 found suitable is fully amortised in the year of acquisition. Licences
 representing right to use are amortised over a period of 3 years.
 D. Impairment
 Cash generating units/assets are assessed for possible impairment at
 each Balance Sheet date based on external and internal sources of
 information. Impairment losses, if, any are recognised as an expenses
 in statement of Protit and Loss.
 E. Investments
 Long term investments are carried at cost less provisions for permanent
 diminution in value of such investments.
 F. Inventories
 i) Raw material, Consumable stores, Spares, Power & Fuels and Packing
 Materials are valued at cost on FIFO basis. Inventories of
 Rejected/Scrapped finished goods are treated as raw materials and
 valued at current Market Price.
 ii) Finished goods are valued at cost or net realisable value whichever
 is lower. Cost is determined on average cost basis including
 proportionate fixed manufacturing overheads based on actual capacity.
 G. Foreign Currency Transaction (other than for Fixed Assets)
 Export Sales in Foreign Currency are accounted at the Exchange rates
 prevailing on the date of negotiation of export documents by bank or at
 the exchange rates under the related forward exchange contracts.
 Receivable & Payables not covered by forward exchange contracts are
 translated at year end exchange rates or at the amounts which is likely
 to be realised from and the gains / losses so determined and also the
 realised exchange gains/ losses are recognised in the Statement of
 Protit and Loss.
 H. Cenvat
 Central Excise Duty and Service Tax credit on purchase of Raw
 Materials, Consumables and Capital Goods and on services received are
 deducted from the cost of such materials, consumables, capital goods
 and services.
 I. Value Added Tax
 Input tax credit on purchase of Raw Materials, Consumables and Capital
 Goods are deducted from the cost of such materials and capital goods.
 J. Export Benefit
 Export Incentives which are in the nature of post realisation benefit
 are recognised on the basis of the claim made till the date of
 financial statements are approved and to the extent of certainty of
 collection and export incentives which are in the nature of pre
 realisation benefit recognised in the year of export irrespective of
 actual realisation.
 K.  Gratuity & Encashment of Leave
 The Gratuity and Encashment of Leave are provided on Actuarial
 Valuation as required under AS-15.
 L.  Bonus
 Bonus is provided for on the basis of liability incurred.
 M.  Taxes on Income
 In case of the Company, provision for tax is made for current and
 deferred taxes. Current Tax is provided on the taxable income under the
 applicable tax laws and tax rates.  Deferred tax assets and liabilities
 arising on account of timing differences, which are capable of reversal
 in subsequent period are recognised under the tax laws and tax rates
 which have been or subsequently enacted.
 Deferred tax assets are recognized only to the extent that there is a
 reasonable certainty that sufficient future taxable income will be
 available against which such deferred tax assets will be realized. In
 case of carry forward of unabsorbed depreciation and tax losses,
 deferred tax assets are recognized only if there is virtual
 certainity that such deferred tax assets can be realised against
 future taxable profits.
 N.  Interest and Finance Charges
 Interest and Finance Charges charged to Statement of Profit & Loss
 include interest and bank charges on bank borrowings, short term and
 long term and discounting of inland, foreign L/Cs including those in
 favour of bankers. Interest on negotiation of Purchases/Sale documents
 are charged to revenue account on the basis of recognition of
 Purchases/Sale. Interest attributable to qualifying assets only in
 specific borrowing cases are capitalised as cost of assets.
 O.  Purchases
 Purchases are inclusive of carriage charged by the suppliers in their
 P.  Segment Reporting Policies
 The Company is engaged in the manufacture of Castings & M.S. products
 which are subject to the same risk & returns and hence there is one
 primary segment. The analysis of geographical segments is based on the
 areas in which the Company operates.
 Q.  Subsidies
 Government subsidies are accounted when there is no reasonable doubt of
Source : Dion Global Solutions Limited
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