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IEL

BSE: 524614|ISIN: INE056E01016|SECTOR: Edible Oils & Solvent Extraction
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Mar 13
Accounting Policy Year : Mar '15
 a Basis for preparation of Financial Statements
 
 The financial statements have been prepared and presented under the
 historical cost convention on an accrual basis of accounting, are in
 accordance with the applicable requirements of the Comapnies Act, 2013
 (the ''Act'') and comply in all material aspects with the Accounting
 Standards specified under section 133 of the Act, read with Rule 7 of
 the Companies(Accounts) Rules, 2014(as amended).
 
 b Use of estimates
 
 The preparation of the financial statements in conformity with
 generally accepted accounting principles requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities, disclosure of contingent liabilities as at the date of
 financial statements and the reported amounts of revenues and expenses
 during the reporting year. Key estimates include estimate of useful
 life of fixed assets, provision for expenses, future obligations under
 retirement benefit plans, provision for doubtful debts and income
 taxes. Actual results could differ from those estimates. Any revision
 to accounting estimates are recognised prospectively in the current and
 future periods.
 
 c Fixed Assets and depreciation/ amortisation:
 
 Fixed assets are stated at cost less accumulated depreciation,
 amortisation and impairment. Cost includes purchase price, inward
 freight, taxes and expenses incidental to acquisition and installation,
 up to the point the asset is ready for its intended use.
 
 Expenses related to commercial premises specifically relating to the
 project / sample flat are amortised over the project completion period
 which is estimated to be five years.
 
 Depreciation on other fixed assets is provided, pro rata for the period
 of use, under the Written Down Value (WDV) as per the useful life of
 the assets prescribed under Schedule II to the Companies Act, 2013.
 
 As per the notification dated 29 August 2014 issued by the Ministry of
 Corporate Affairs, the Company has charged the carrying value of Nil
 life assets to the statement of profit and loss.
 
 d Impairment of Assets
 
 Impairment loss is provided to the extent the carrying amount of assets
 exceeds their recoverable amounts. Recoverable amount is the higher of
 an asset''s net selling price and its value in use. Value in use is the
 present value of estimated future cash flows expected to arise from the
 continuing use of the asset and from its disposal at the end of its
 useful life. Net selling price is the amount obtainable from sale of
 the asset in an arm''s length transaction between knowledgeable, willing
 parties, less the costs of disposal.
 
 e Investments
 
 Current Investments are carried at lower of cost and fair value. Long
 term investments are carried at cost. However, when there is a decline,
 other than temporary, the carrying amount is reduced to recognise the
 decline.
 
 f Borrowing costs:
 
 Interests and other borrowing costs (including front end processing
 fees) attributable to qualifying assets are allocated as part of the
 cost of construction / development of such assets. The borrowing costs
 incurred during the period in which activities, necessary to prepare
 the assets for their intended use or sale, are in progress, are
 allocated as aforesaid. Other borrowing costs are charged to the
 statement of profit and loss.
 
 g Provisions and contingent liabilities:
 
 Provisions are recognised when the Company has a present obligation as
 a result of past events 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 management 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
 management estimates. Contingent liabilities are disclosed in respect
 of possible obligations that arise from past events, whose existence
 would be confirmed upon the occurrence or non occurrence of one or more
 uncetain furture events not wholly within the control of the Company.
 
 h Inventories :
 
 Inventories are valued at lower of cost and net realisable value. Cost
 is determined on the following basis:
 
 (i)     Stores and Spare parts     First in First out
 
 (ii)    Raw Materials First in     First out
 
 (iii)   Trading Good First in      First out
 
 (iv)    Finished Goods and         Material Cost plus appropriate share
         Process Stock              of overheads
 
 i Retirement benefits:
 
 i) All short term employee benefits are accounted on undiscounted basis
 during the accounting period based on services rendered by employees
 
 ii) The Company''s liability towards compensated absences is accounted
 for at the year end on the basis of valuation done as per company''s
 policy and the resultant gains/losses are charged to the Profit and
 Loss Account.
 
 iii) The Company''s liability towards gratuity benefits is accounted for
 at the year end on the basis of valuation done as per Payment of
 Gratuity Act, 1972.
 
 j Cenvat Credit
 
 CENVAT Credit is accounted on accrual basis on purchase of materials.
 k Foreign Currency Transactions
 
 Transactions in foreign currency are recorded at the exchange rate
 prevailing on the date of the transaction. Monetary assets and
 liabilities are translated at the year-end rate. The difference between
 the rate prevailing on the date of the transaction and on the date of
 settlement, as also on the translation of monetary assets and
 liabilities at the end of the year is recognized as income or expense
 as the case may be for the year.
 
 l Revenue Recognition
 
 Revenue is recognised to the extent that is probable that the economic
 benefits will flow to the Company and the revenue can be reliably
 measured.
 
 Benefits on account of entitlement of export incentives are recognised
 as and when the right to receive is established.
 
 m Taxes on income
 
 Current taxation
 
 Provision for current tax is recognized based on the estimated tax
 liability computed after taking credit for allowances and exemptions in
 accordance with the Income Tax Act, 1961.
 
 Deferred taxation
 
 Deferred tax assets and liabilities are recognised for the future tax
 consequences attributable to timing differences between the financial
 statements carrying amounts of existing assets and liabilities and
 their respective tax basis.  Deferred tax assets and liabilities are
 measured using the enacted tax rates or tax rates that are
 substantively enacted at the Balance Sheet dates. The effect on
 deferred tax assets and liabilities of a change in tax rates is
 recognised in the period that includes the enactment date. Where there
 is unabsorbed depreciation or carry forward losses, deferred tax assets
 are recognised only if there is virtual certainty supported by
 convincing evidence of realisation of such assets. Other deferred tax
 assets are recognised only to the extent there is reasonable certainty
 of realisation in the future. Such assets are reviewed at each Balance
 Sheet date to reassess realisation.
Source : Dion Global Solutions Limited
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