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Moneycontrol.com India | Accounting Policy > Miscellaneous > Accounting Policy followed by Natura Hue Chem - BSE: 531834, NSE: N.A
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Natura Hue Chem

BSE: 531834|ISIN: INE487B01019|SECTOR: Miscellaneous
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Natura Hue Chem is not listed on NSE
Mar 13
Accounting Policy Year : Mar '14
A.  BASIS OF ACCOUNTING
 
 The financial statements have been prepared under the historical cost
 conventional accrual basis of accounting, in conformity with accounting
 principles generally accepted in India and comply with the accounting
 standard referred to in Sec.211 (3c) of the Companies Act, 1956. The
 financial statements are presented in Indian rupees.
 
 B.  USE OF ESTIMATES
 
 The preparation of financial statements are in conformity with Indian
 GAAP requires management to make estimates and assumptions that affect
 the reported amounts of assets and liabilities and disclosure of
 contingent liabilities on the date of the financial statements and the
 reported amounts of revenues and expenses during the reporting period.
 Actual results could differ from those estimates. Any revision to
 accounting estimates is recognized prospectively in current and future
 periods. Examples of such estimates include provisions for doubtful
 debts, provision for income taxes and the useful lives of fixed assets.
 
 C.  FIXED ASSETS:
 
 (i) Fixed Assets are stated at cost less depreciation. Cost comprises
 the purchase price and any other applicable costs. 
 
 (ii) Borrowing costs in respect of loans acquired for acquisition and
 construction of fixed assets are capitalized upto the date the assets
 are ready for use.
 
 D.  DEPRECIATION:
 
 The company provides depreciation on Fixed Assets on Written down Value
 method on Single shift basis at the rates and in the manner prescribed
 in schedule XIV to the Companies Act 1956.
 
 E.  INVESTMENTS:-
 
 Long term investments are carried at cost less provision, if any for
 permanent diminution in value of such investments. Current investments
 are carried at lower of cost and fair value.
 
 F.  INVENTORIES:-
 
 Trading products purchased by the Company are carried at lower of cost
 and net realisable value.
 
 G.  TAXES ON INCOME:- 
 
 Current tax is determined as the amount of tax payable in respect of 
 taxable income for the years. Deferred tax is recognised, on timing
 differences, being the difference between taxable incomes and 
 accounting income that originate in one period and are capable of 
 reversal in one or more subsequent periods. Where there is unabsorbed
 depreciation or carry forward loss, deferred tax assets are recognised
 only if there is virtual certainty of realisation of such assets, other
 deferred tax assets are recognised only to the extent there is 
 reasonable certainty of realisation in future.
 
 Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
 gives rise to future economic benefits in the form of adjustment of
 future income tax liability, is considered as an asset if there is
 convincing evidence that the Company will pay normal tax after the tax
 holiday period.  Accordingly, it is recognized as an asset in the
 balance sheet when it is probable that the future economic benefit
 associated with it will flow to the Company and the asset can be
 measured reliably.
 
 H.  REVENUE RECOGNITION:-
 
 a.  Sale of goods is recognised on transfer of property therein.
 
 b.  Insurance and other claims are recognised only on acceptance of
 claims by the appropriate authorities.
 
 I.  BORROWING COST
 
 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 necessarily takes a
 substantial period of time to get ready for its intended use or sale.
 All other borrowings costs are charged to revenue.
 
 J.  EMPLOYEE BENEFITS
 
 Short-term employee benefits (benefits which are payable within twelve
 months after the end of the period in which the employees render
 service) are measured at cost and are recognised as an expense at the
 undiscounted amount in the profit and loss account in the profit and
 loss account of the year in which the related service is rendered.
 
 Contributions to Provident Fund, a defined contribution plan, are made
 in accordance with the statute and are recognized as an expense when
 employees have rendered service entitling them to the contributions.
 
 Other long-term employee benefits (benefits which are payable after the
 end of twelve months from the end of the year in which the employees
 render service) are measured on a discounted basis by the Projected
 Unit Credit Method on the basis of actuarial valuation.
 
 Actuarial gains and losses are recognized immediately in the Profit and
 Loss Account 
 
 K.  IMPAIRMENT OF ASSETS
 
 At each balance sheet date the company reviews whether there is any
 indication of impairment of the carrying amount of the company''s fixed
 assets. If any indication exists, an asset''s recoverable amount is
 estimated.  An impairment loss is recognized whenever the carrying
 amount of an asset exceeds its recoverable amount. The recoverable
 amount is the greater of the net selling price and value in use. In
 assessing value in use, the estimated future cash flows are discounted
 to their present value based on an appropriate discount factor
 
 L.  LEASE
 
 Finance leases, which effectively transfer to the Company substantially
 all the risks and benefits incidental to ownership of the leased item,
 are capitalized at the lower of the fair value and present value of the
 minimum lease payments at the inception of the lease term and disclosed
 as leased assets. Lease payments are apportioned between the finance
 charges and reduction of the lease liability based on the implicit rate
 of return. Finance charges are charged directly against income. Lease
 management fees, legal charges and other initial direct costs are
 capitalized.
 
 If there is no reasonable certainty that the Company will obtain the
 ownership by the end of the lease term, capitalized leased assets are
 depreciated over the shorter of the estimated useful life of the asset
 or the lease term.
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased item, are classified as
 operating leases.  Operating lease payments are recognized as an
 expense in the Profit and Loss account on a straight-line basis over
 the lease term.
 
 M.  FOREIGN CURRENCY TRANSACTIONS
 
 Transactions in foreign currencies are recorded at the exchange rates
 prevailing on the dates of transactions and in case of purchase of
 materials and sale of goods, the exchange gains / losses on settlements
 during the year, are charged to Profit and Loss Account.
 
 Monetary assets and liabilities denominated in foreign currencies are
 translated at the rates prevailing on the date of Balance Sheet.
 Exchange gains / losses including those relating to fixed assets are
 dealt with in the Profit and Loss Account.
 
 N.  EARNINGS PER SHARE
 
 The Company reports Basic and Diluted Earnings Per Share (EPS/DEPS) in
 accordance with Accounting Standard 20 on Earnings Per Share. Basic
 EPS is computed by dividing the net profit or loss for the year
 attributable to equity shareholders by the weighted average number of
 equity shares outstanding during the year.
 
 Diluted EPS is computed by dividing the net profit or loss for the year
 attributable to equity shareholders by the weighted average number of
 equity shares outstanding during the year as adjusted for the effects
 of all dilutive potential equity shares, except where the results are
 anti-dilutive.
 
 O.  PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 The Company recognizes provisions when there is present obligation as a
 result of past event and it is probable that there will be an outflow
 of resources and reliable estimate can be made of the amount of the
 obligation. A disclosure for Contingent liabilities is made in the
 notes on accounts when there is a possible obligation or present
 obligations that may, but probably will not, require an outflow of
 resources. Contingent assets are neither recognised nor disclosed in
 the financial statements.
 
 P.  TRADE RECIEVABLE & PAYABLES
 
 Services rendered on credit are included in trade receivables at the
 balance sheet date & reduced by appropriate allowances for estimated
 doubtful amounts. Trade payables are stated at their nominal value.
 
 Q.  CASH AND CASH EQUIVALENTS
 
 For the purpose of the cash flows, cash & cash equivalents comprise
 cash on hand, balances with bank and deposits with banks.
 
 R.  CASH FLOW STATEMENT
 
 Cash and cash equivalents comprise cash and cash on deposit with banks
 and corporations. The company considers all highly liquid investments
 with a remaining maturity at the date of purchase of three months or
 less and that are readily convertible to known amounts of cash to be
 cash equivalents.
Source : Dion Global Solutions Limited
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