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Moneycontrol.com India | Accounting Policy > Miscellaneous > Accounting Policy followed by Mangalam Timber Products - BSE: 516007, NSE: MANGTIMBER
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Mangalam Timber Products

BSE: 516007|NSE: MANGTIMBER|ISIN: INE805B01012|SECTOR: Miscellaneous
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Accounting Policy Year : Mar '16

Note: 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1.1 BASIS OF ACCOUNTING

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to circular 15/2013 dated 13th September, 2013 read with circular 08/2014 dated 4th April, 2014, till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 (the ''Act'') shall continue to apply. Consequently, these financial statements have been prepared to comply, in all material aspects, with the accounting standards notified under Section 133 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the other relevant provisions of the Companies Act, 1956 (the ''Act'').

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 III to the Act.

1.2 TANGIBLE FIXED ASSETS

a) Tangible Fixed Assets are stated at cost of acquisition or construction including any attributable cost for bringing the asset to its working condition for its intended use or at revalued amounts wherever such assets have been revalued. Subsequent expenditures related to an item of fixed asset (tangible or intangible) are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

b) Losses arising from retirement of and gain & losses arising from disposal of fixed assets are recognized in Statement of Profit and Loss.

c) Capital Work In Progress is stated at cost.

1.3 INTANGIBLE ASSETS

Intangible assets are capitalized where it is expected to provide future enduring economic benefits. Costs incurred on acquisition of intangible assets are capitalized.

1.4 DEPRECIATION AND AMORTISATION

a) Depreciation on tangible fixed assets is provided as per estimated useful life given in Schedule II to the Companies Act, 2013 after retaining 5% of assets historical value.

b) Intangible assets are amortized over its estimated useful life from the date of its capitalization.

c) Additions on account of exchange fluctuation are depreciated prospectively over the remaining life of the assets.

1.5 IMPAIRMENT OF ASSTES

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired.

An impairment loss, if any, is recognized wherever the carrying amount of the fixed assets exceeds the recoverable amount i.e. the higher of the assets'' net selling price and value in use. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable account.

1.6 INVESTMENTS

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost less write down for any diminution, other than temporary, in carrying value.

1.7 INVENTORIES

a) Inventories are valued at lower of cost or net realizable value. Cost of finished goods comprise of materials costs, labor and other appropriate overheads, where applicable. Cost for Raw materials, stores & spares are determined on the basis of weighted average method.

b) Inventories of finished goods include goods yet to be graded and marked. Excise duty on finished goods are provided after grading and marking.

c) Spares for specific Plant & Machinery are amortized over the useful life of the related Plant & Machinery, as estimated by the management.

d) Inventories are written down for obsolete / slow moving / non-moving items, wherever necessary.

1.8 PLANTATION WORK-IN-PROGRESS

Plantation work-in-progress is stated at cost.

Plantation work-in-progress includes cultivation and other expenses allocable to the same, which are carried forward till the commercial exploitation of the plantations raised. The wood procured on harvesting is transferred to the operations at the estimated proportionate cost incurred till harvesting and the corresponding amount is adjusted against the plantation work-in-progress.

Plantation Work-in-Progress also includes cost of raising/procurement of seedlings which are adjusted at the time of sale/consumption of such seedlings.

1.9 CDM PROJECT

The expenses incurred in relation to the CDM Project have been shown under the head Advances and the appropriation for such expenses shall be accounted for in the year of realization of Carbon Credit.

1.10 FOREIGN CURRENCY TRANSLATION

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of transactions. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are reinstated at exchange rates prevailing on that date. The resultant exchange differences arising from settlement of foreign currency transactions and from the year-end restatement are recognized in the Statement of Profit and Loss

1.11 REVENUE

Revenue from sale of goods are recognized when the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract. It includes excise duty but excludes value added tax/sales tax, trade discounts, returns, as applicable.

1.12 EMPLOYEE BENEFITS

Short term Employee Benefits

Short-term Employee Benefits (i.e. benefits falling due within one year after the end of the period in which employees render the related service) are recognized as expenses in the period in which employee services are rendered as per the Company''s scheme based on expected obligations on undiscounted basis.

Post Employment Benefit Plans

Under Defined Contribution Plans, contributions payable in keeping with the related schemes are recognized as expenses for the year.

For Defined Benefit Plans, the cost of providing benefits is determined using the ''Projected Unit Credit Method'', with actuarial valuations carried out at each Balance Sheet date. Actuarial gains and losses are recognized as income or expenditure immediately in full in the Statement of Profit and Loss for the year in which they occur. The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, if any and as reduced by the fair value of scheme assets.

Other Lomg-term Employee Benefits

Leave encashment/Compensated Absence is determined using Projected Unit Credit Method with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses and past service cost are recognized immediately in the Statement of Profit and Loss for the year in which they occur. Other long-term employee benefits obligation are recognized on actual basis at each Balance Sheet date.

1.13 BORROWING COST

- General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognized in Statement of Profit and Loss in the period in which they are incurred

1.14 SHARE ISSUE EXPENSE

- Share issue expense incurred for issue of 7.5% Non-Cumulative redeemable preference share are amortized over the period Shares remain outstanding.

1.15 DEFERRED REVENUE EXPENSES

Deferred revenue expenses are written off in five equal installments commencing from the year in which these expenses are incurred.

1.16 INCOME TAX

- Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961.

Deferred tax assets and liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted.

1.17 LEASES

Leases in which a significant portion of the risks and rewards of ownership are retained by the less or are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss.

1.18 CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

1.19 EARNING PER SHARE

Basic earnings per share is calculated by dividing the net profit /(loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company''s earnings per share is the net profit/(loss) for the period after deducting preference dividends and any attributable tax there to for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit /(loss) for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

1.20 PROVISIONS AND CONTINGENT LIABILITIES

Provisions: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

1.21 USE OF ESTIMATES

The presentation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that effect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in the future periods.

Source : Dion Global Solutions Limited
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