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Moneycontrol.com India | Accounting Policy > Domestic Appliances > Accounting Policy followed by Jaipan Industries - BSE: 505840, NSE: N.A
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Jaipan Industries

BSE: 505840|ISIN: INE058D01030|SECTOR: Domestic Appliances
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Jaipan Industries is not listed on NSE
Mar 14
Accounting Policy Year : Mar '15
a) Use of estimates
 
 The preparation of the financial statements are in conformity with
 generally accepted accounting principles (GAAP) requires management to
 make estimates and assumptions that affect the reported amount of
 assets and liabilities, disclosure of contingent liabilities at the
 date of financial statements. The key estimates made by the Company in
 preparing these financial statements comprise provision for expenses,
 retirement benefits, provision for doubtful debts and income taxes.
 Actual results could differ from those estimates. Any revision to the
 accounting estimates is recognised prospectively in current and future
 periods.
 
 b) Fixed assets, Intangible Assets, Work in Progress and depreciation
 
 Fixed assets are stated at cost of acquisition or construction less
 accumulated depreciation and impairment losses, if any. Cost comprises
 the purchase price and other costs attributable to bringing the asset
 to its working condition for its intended use, net of cenvat
 recoverable.  Intangible Assets are recognised when it is probable that
 the future economic benefits that are attributable to the assets will
 flow to the enterprises and he cost of the asset can be measured
 reliably.
 
 Capital Work in progress comprises outstanding advances paid to acquire
 fixed assets. The cost of fixed assets that is not yet ready for their
 intended use at the Balance sheet date.
 
 Depreciation on fixed assets is provided on the Strated Line Methods
 (SLM), at the rates and the manner prescribed in Schedule II to the Act
 which as per management is representative of the estimated useful life
 of these assets. Leasehold improvements are amortised over the primary
 lease period. Proportionate depreciation is charged for
 additions/deletions during the year. Individual asset costing less than
 Rs. 5,000 are depreciated in full in the year of purchase.
 
 c) Investments
 
 Investments that are readily realisable and intended to be held for not
 more than a year are classified as current investments. Current
 investments are carried at lower of cost and fair value, determined on
 an individual investment basis. All other investments are classified as
 long-term investments and are carried at cost. However, a provision for
 diminution in value is made if the diminution in value is other than
 temporary.
 
 d) Inventories
 
 INVENTORIES ARE VALUED AS UNDER:
 
 a) Raw materials, stores and spares and packaging materials: Lower of
 cost and net realisable value. Cost is determined on FIFO basis.
 
 b) Finished goods: Lower of cost and net realisable value. Cost
 includes direct materials and labour and a proportion of manufacturing
 overheads based on normal operating capacity. Cost of finished goods
 includes excise duty.
 
 c) Traded goods: Lower of cost and net realisable value. Cost is
 determined on FIFO basis.
 
 d) Work-in-process: At cost upto estimated stage of completion. Cost
 includes direct materials and labour and a proportion of manufacturing
 overheads based on normal operating capacity.
 
 Net realisable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and estimated
 costs necessary to make the sale.
 
 e) Revenue recognition
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 Sale of goods
 
 Revenue is recognized when the significant risks and rewards of
 ownership of the goods have passed to the buyer usually on acceptance
 of the goods and other revenue recognition criteria are met and is
 stated net of trade discounts, rebates, excise duties, sales returns
 and all applicable sales tax and duties.
 
 Interest
 
 Revenue is recognised on a time proportion basis taking into account
 the amount outstanding and the rate applicable.
 
 Dividends
 
 Revenue is recognized when the Companies right to receive the payment
 is established.
 
 f) Foreign exchange transactions
 
 Transactions in foreign currencies are recorded at the rates prevailing
 on the date of the transaction. Monetary items denominated in foreign
 currency are restated at the rate prevailing on the balance sheet date.
 Non-monetary items which are carried in terms of historical cost
 denominated in a foreign currency are reported using the exchange rate
 at the date of the transaction; and non-monetary items which are
 carried at fair value or other similar valuation denominated in a
 foreign currency are reported using the exchange rates that existed
 when the values were determined.
 
 Exchange differences arising on the settlement of monetary items or on
 reporting company''s monetary items at rates different from those at
 which they were initially recorded during the year or reported in the
 previous financial statements, are recognised as follows: i Exchange
 differences arising on settlement of transactions and translation of
 monetary items other than those covered by (ii) below are recognized as
 income or expense in the year in which they arise.
 
 g) Export benefits/incentives
 
 Export entitlements under the Duty Entitlement Pass Book scheme
 (''DEPB'') are recognised in the profit and loss account on cash basis in
 respect of the exports made. Obligation/entitlements on account of
 Advance License Scheme for import of raw materials are accounted for on
 the purchase of raw materials and/or export sales.
 
 h) Provisions and contingencies
 
 A provision is recognised when an enterprise has a present obligation
 as a result of a past event; 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.
 
 i) Employee retirement benefits Defined contribution plan - provident
 fund
 
 The employees entitled to receive benefits under the provident fund as
 defined, in Employees Provident Fund and Miscellaneous Provisions Act,
 1952, receive the benefits of provided fund contribution. Both, the
 employee and the employer make monthly contributions to the plan at a
 predetermined rate (presently at 12%) of the employees'' basic salary.
 The Company has no further obligations under the plan beyond its
 monthly contributions. These contributions are made to the fund
 administered and managed by the Government of India and are charged to
 Profit and Loss Account.
 
 j) Taxation
 
 The Charge for current income tax is measured at the amount expected to
 be paid to the tax authorities in accordance with the Indian Income Tax
 Act, 1961.
 
 The Charge for 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 that they can be realised against future taxable
 profits. Other deferred tax assets are recognised only to the extent
 there is reasonable certainty of realisation in the future. At each
 balance sheet date the Company re-assesses unrecognised deferred tax
 assets.
 
 Minimum Alternative tax (MAT) credit is recognized as an asset only
 when and to the extent there is convincing evidence that the company
 will pay normal income tax during the specified period.
 
 k) Borrowings 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 takes necessarily
 substantial period of time to get ready for its intended use. All other
 borrowing cost are charged to revenue.
 
 l) Impairment of Assets
 
 At the date of each Balance Sheet, the company evalues internally,
 indications of the impairment if any, to the carrying amount of its
 fixed and other assets. If any indication does exist, the recoverable
 amount is estimated at the higher of the realizable value and the value
 in use, as considered appropriate. If the estimated realizable value is
 less than the carrying amount, an impairment loss is recognised.
 
 Reversal of impairment losses recognised in prior years is recorded
 when there is an indication that the impairment losses recognised for
 the asset no longer exist or have decreased. However, the increase in
 carrying amount of an asset due to reversal of an impairment loss is
 recognised to the extent it does not exceed amount that would have been
 determined (net of depreciation) had no impairment loss been recognised
 for the asset in prior years.
 
 m) Earnings per share
 
 Basic earnings per share is calculated by dividing the net profit or
 loss for the period attributable to equity shareholders (after
 deducting applicable taxes) by the weighted average number of equity
 shares outstanding during the period.
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the period attributable to equity shareholders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.
 
 4.  Loans:
 
 a) Secured working capital loans:
 
 These include Cash Credit, Packing Credit and letter of credit facility
 from Bank of Baroda secured by way of charge on hypothecation of
 inventories and book debts (except specific clearing and forwarding
 services receivables) of the Company, situated at Silvasa and Mumbai
 office and other Branch . Further, these loans are secured by
 collateral charge on factory Building situated at silvassa. Further,
 these loans are secured by personal guarantee of Directors, Mr. J.N.
 Agawal and Mr. Atin Agarwal. These loans are generally extended for a
 period of one year and mutually renewable every year with a clause of
 payable on demand.
 
 b) Secured term loans:
 
 These include loans from banks and financial institutions secured by
 way of first charge / mortgage in respect of the Company''s immovable
 and movable properties, both present and future. Presently company has
 not obtained any secured terms loan from any bank or the financial
 institution.
 
 c) Secured vehicle loans:
 
 These include hire-purchase loans from banks for purchase of various
 vehicles secured by way of hypothecation of respective vehicles.
 Amounts payable within one year Rs. 43,32,321.30/-(previous year: Rs.
 67,07,617.20/-).
 
 d) Unsecured loans:
 
 Working capital requirements obtained from others and is payable within
 one year. These loans are generally extended for a period of one year
 and mutually renewable every year with a clause of payable on demand.
 
 5.  Sundry Creditors
 
 The Company has no details of Small Scale Industrial undertakings &
 Micro, Small and Medium Enterprises.
 
 
 
 
Source : Dion Global Solutions Limited
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