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Shah Foods

BSE: 519031|ISIN: INE455D01012|SECTOR: Food Processing
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Shah Foods is not listed on NSE
Mar 14
Accounting Policy Year : Mar '15
 2.1 Basis of accounting and preparation of financial statements
 
 The financial statements of the Company have been prepared in
 accordance with the Generally Accepted Accounting Principles in India
 (Indian GAAP) to comply with the Accounting Standards notified under
 the Companies (Accounting Standards) Rules, 2006 (as amended) and the
 relevant provisions of the Companies Act, 2013. The financial
 statements have been prepared on accrual basis under the historical
 cost convention and prepares its accounts on a going concern basis. The
 accounting policies adopted in the preparation of the financial
 statements are consistent with those followed in the previous year.
 
 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 Revised Schedule VI to the Companies Act, 2013.
 Based on the nature of products and the time between the acquisition of
 assets for processing and their realisation in cash and cash
 equivalents, the Company has ascertained its operating cycle as 12
 months for the purpose of current - non current classification of
 assets and liabilities.
 
 2.2 Use of estimates
 
 In the preparation of the financial statements, the management of the
 Company makes estimates and assumptions in conformity with the
 applicable accounting principles in India that affect the reported
 balances of assets and liabilities and disclosures relating to
 contingent assets and liabilities as at the date of the financial
 statements and reported amounts of income and expenses during the
 period. Examples of such estimates include provisions for doubtful
 debts, future obligations under employee retirement benefit plans,
 income taxes, and the useful lives of fixed assets and intangible
 assets.
 
 2.3 Tangible fixed assets
 
 Fixed assets are stated at cost. Cost comprises cost of acquisition,
 freight, duties levies and directly attributable cost of bringing the
 assets to their working condition up to the date, the asset is ready
 for its intended use.
 
 2.4 Capital work-in-progress
 
 Projects under which assets are not ready for their intended use and
 other capital work-in-progress are carried at cost, comprising direct
 cost and related incidental expenses.
 
 2.5 Intangible assets
 
 The company recognizes intangible assets in accordance with Accounting
 Standard i.e. AS 26 issued by the Institute of Chartered Accountants of
 India on intangible assets less accumulated amortisation and impairment
 losses.
 
 2.6 Depreciation & amortisation
 
 Depreciation has been provided on a straight line method based on the
 economic useful life of the assets ascertained by the Management which
 is greater than or less than or equal to the corresponding rates
 prescribed in Part C of Schedule II of the Companies Act, 2013 and
 accordingly the rates of depreciation are applied. Depreciation on
 additions and deletions during the year is calculated on pro-rata
 basis.
 
 2.7 Impairment of assets
 
 The carrying values of assets / cash generating units at each Balance
 Sheet date are reviewed for impairment. If any indication of impairment
 exists, the recoverable amount of such assets is estimated and
 impairment is recognised, if the carrying amount of these assets exceeds
 their recoverable amount. The recoverable amount is the greater of the
 net selling price and their value in use. Value in use is arrived at by
 discounting the future cash flows to their present value based on an
 appropriate discount factor. When there is indication that an impairment
 loss recognised for an asset in earlier accounting periods no longer
 exists or may have decreased, such reversal of impairment loss is
 recognised in the Statement of Profit and Loss.
 
 2.8 Inventories
 
 Inventories are valued at the lower of cost (on FIFO / weighted average
 basis) and the net realisable value after providing for obsolescence
 and other losses, where considered necessary. Cost includes all charges
 in bringing the goods to the point of sale, including Octroi and other
 levies, transit insurance and receiving charges.
 
 Work-in-progress and finished goods include appropriate proportion of
 overheads and, where applicable, excise duty
 
 2.9 Revenue Recognition:
 
 Sales
 
 Income from sales of goods is recognised upon passage of risks and
 rewards of ownerships to goods, which generally coincide with delivery
 of goods to customers.
 
 Interest income from deposit is accounted on accrual bases and
 considered as operating income Dividend Income is accounted when the
 right to receive the payment is established.
 
 2.10 Investments
 
 Long-term investments are carried individually at cost less provision
 for diminution, other than temporary, in the value of such investments.
 Current investments are carried individually, at the lower of cost and
 fair value. Cost of investments include acquisition charges such as
 brokerage, fees and duties.
 
 2.12 Employee benefits
 
 Employee benefits include provident fund, gratuity fund and compensated
 absences.
 
 Annual leave benefits / leave encashment to employees and retirement
 benefits in form of gratuity are charged to Statement of Profit and
 Loss based on undiscounted amount (actual bases) rather than actuarial
 valuations.
 
 Defined contribution plans
 
 The Company''s contribution to provident fund are considered as defined
 contribution plans and are charged as an expense as they fall due based
 on the amount of contribution required to be made.
 
 Short-term employee benefits
 
 The undiscounted amount of short-term employee benefits expected to be
 paid in exchange for the services rendered by employees are recognised
 during the year when the employees render the service. These benefits
 include performance incentive and compensated absences which are
 expected to occur within twelve months after the end of the period in
 which the employee renders the related service. The cost of such
 compensated absences is accounted as under :(a) in case of accumulated
 compensated absences, when employees render the services that increase
 their entitlement of future compensated absences; and (b) in case of
 non-accumulating compensated absences, when the absences occur.
 
 Long-term employee benefits
 
 Compensated absences which are not expected to occur within twelve
 months after the end of the period in which the employee renders the
 related service are recognised as a liability at the present value of
 the defined benefit obligation as at the Balance Sheet date less the
 fair value of the plan assets out of which the obligations are expected
 to be settled. Long Service Awards are recognised as a liability at the
 present value of the defined benefit obligation as at the Balance Sheet
 date.
 
 2.13 Research and development expenses
 
 Revenue expenditure pertaining to research is charged to the Statement
 of Profit and Loss. Development costs of products are also charged to
 the Statement of Profit and Loss unless a product''s technological
 feasibility has been established, in which case such expenditure is
 capitalised. The amount capitalised comprises expenditure that can be
 directly attributed or allocated on a reasonable and consistent basis
 to creating, producing and making the asset ready for its intended use.
 Fixed assets utilised for research and development are capitalised and
 depreciated in accordance with the policies stated for Tangible Fixed
 Assets and Intangible Assets.
 
 2.14 Taxes on Income
 
 Current tax is the amount of tax payable on the taxable income for the
 year as determined in accordance with the provisions of the Income Tax
 Act, 1961. and based on expected outcome of the assessment.
 
 Deferred tax is recognised on timing differences, being the differences
 between the taxable income and the accounting income that originate in
 one period and are capable of reversal in one or more subsequent
 periods. Deferred tax is measured using the tax rates and the tax laws
 enacted or substantially enacted as at the reporting date.
 
 Deferred tax liabilities are recognised for all timing differences.
 
 Deferred tax assets in respect of unabsorbed depreciation and carry
 forward of losses are recognised only if there is virtual certainty
 that there will be sufficient future taxable income available to
 realise such assets. Deferred tax assets are recognised for timing
 differences of other items only to the extent that reasonable certainty
 exists that sufficient future taxable income will be available against
 which these can be realised.
 
 Deferred tax assets and liabilities are offset if such items relate to
 taxes on income levied by the same governing tax laws and the Company
 has a legally enforceable right for such set off. Deferred tax assets
 are reviewed at each Balance Sheet date for their reliability.
 
 Current and deferred tax relating to items directly recognised in
 equity are recognised in equity and not in the Statement of Profit and
 Loss.
 
 2.15 Provisions and contingencies
 
 A provision is 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 (excluding retirement
 benefits) are not discounted to their present value and are determined
 based on the 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. Contingent liabilities
 are disclosed in the Notes.
 
 However, all known, material contingent liabilities are disclosed by
 way of separate notes.
 
 2.16 Prior Expenditure / Income
 
 Expenditure / Income relating to prior year are disclosed separately,
 if any.
 
 2.17 Earnings Per Share Basic EPS
 
 The earnings considered in ascertaining the Company''s basic EPS
 comprise the net profit/ (loss) after tax. The number of shares used in
 computing basic EPS is the weighted average number of shares
 outstanding during the year.
 
 Diluted EPS
 
 The net profit/ (loss) after tax and the weighted average number of
 shares outstanding during the year are adjusted for all the effects of
 dilutive potential equity shares for calculating the diluted EPS.
Source : Dion Global Solutions Limited
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