Home  »  Company  »  Ishan Dyes & Che  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Ishan Dyes & Chemicals Ltd. Company

Mar 31, 2015

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

"The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards notified in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

Current / Non-current classification

The Revised Schedule VI to the Act requires assets and liabilities to be classified as either Current or Non-current.

An asset is classified as current when it satisfies any of the following criteria:

(a) it is expected to be realized in, or is intended for sale or consumption in, the entity's normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realized within twelve months after the balance sheet date; or

(d) it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the balance sheet date.

All other assets are classified as non-current.

A liability is classified as current when it satisfies any of the following criteria:

(a) it is expected to be settled in the entity's normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is due to be settled within twelve months after the balance sheet date; or

(d) the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.

All other liabilities are classified as non-current.

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 above which are in accordance with the revised Schedule VI to the Act."

ii. USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known / materialize.

iii. TANGIBLE ASSETS

Fixed Assets are stated at cost of acquisition / construction or book value and includes amounts added on revaluation less accumulated depreciation and impairment loss, if any.

iv. INTANGIBLE ASSETS

Intangible Assets are generally stated at cost of acquisition net of recoverable taxes less accumlated amortisation/ depletion.

v. 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.

vi. DEPRECIATION

Effective 1st April 2014, the Company depreciates its Fixed Assets over the useful life in the manner prescribed in Schedule II of the Act, as against the earlier practice of depreciating at the rates prescribed in Schedule XIV to the Companies Act, 1956.

(i) In case of pre-owned assets, the useful life is estimated on a case to case basis.

(ii) Depreciation on additions to the assets or on sale/discardment of assets, is calculated prorata from the month of such addition or upto the month of such sale/discardment, as the case may be.

(iii) Based upon the future projections, the Company has estimated the economic useful life of the assets and accordingly the assets have been depreciated.

vii. INVENTORIES

The inventory is valued as follows:

(i) Raw Materials At Cost First in First out.

(ii) Stores and Spare parts At Cost First in First out.

(iii) Finished Goods Valued at lower of cost or Net Relisable Value

(iv) Work in Process At cost by using absorption cost method.

As per normal practices the cost of finished goods includes all direct cost and normal fixed overheads. However, it does not include selling and distribution cost. Value of stock of finished goods at the date of Balance Sheet includes duties and taxes if any applicable.

viii. RETIREMENT BENEFITS 1) GRATUITY

The Trustees of Ishan Dyes and Chemicals Limited Employees' Gratuity Fund has a fund arrangement (cash accumulation policy) with Life Insurance Corporation of India (LIC) to administer its gratuity benefit scheme. The contributions towards the said funds which are as determined by LIC are charged to revenue each year. Company ascertains the Liability towards Gratuity at the year-end and provision for the differential amount between the liability determined on Actuarial Valuation and Fund balance is provided in the books of account.

2) PROVIDENT FUND

Liability is determined on the basis of contribution as required under the statute/rules.

ix. CENVAT CREDIT

CENVAT Credit is accounted on accrual basis on purchase of materials.

x. FOREIGN CURRENCY TRANSACTIONS

"Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Monetary items are translated at the year-end rates. The exchange difference between the rate prevailing on the date of transaction and on the date of settlement as also on translation of monetary items at the end of the year is recognised as income or expense, as the case may be.

Any premium or discount arising at the inception of the forward exchange contract is recognized as income or expense over the life of the contract."

xi. REVENUE RECOGNITION

Revenue / Income is recognised when no significant uncertainty as to determination or realisation exists.

xii. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :

Provision involving substantial degree of estimation in measurement is recognised when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in notes, if any. Contingent Assets are neither recognised nor disclosed in the financial statement.

xiii. BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or productionof qualifying assets are capitalised 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 borrowing costs are charged to revenue.

xiv. TAXES ON INCOME

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation and losses, are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same.

xv. DOUBTFUL DEBTS/ADVANCES

Provision is made in the accounts in respect of debts/advances which in the opinion of the management are considered doubtful of recovery.

xvi. IMPAIRMENT LOSS

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.


Mar 31, 2014

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The accounts have been prepared to comply in all material aspects with applicable accounting principles In India, the Accounting Standards notified in the Companies (Accounting Standards] Rules, 2006 and the relevant provisions of the Companies Act; 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of die Companies Act; 2013, Current / Non-current classification.

The Revised Schedule VI to the Act requires assets and liabilities to be classified as either Current or Non-current An asset is classified as current when it satisfies any of the following criteria:

[a) it is expected to be realized in, or is intended for sale or consumption in, the entity''s normal operating cycle;

[b} it Is held primarily for the purpose of being traded;

[c] it is expected to be realized within twelve months after the balance sheet date; or

id] it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the halance sheet date.

All other assets are classified as non-current

A liability is classified as current when it satisfies any of the following criteria:

[a) it is expected to be settled in the entity''s normal operating cycle;

b) it is held primarily for the purpose of being traded;

[c] It Is due to be settled within twelve months after the balance sheet date; or

[d) die Company does not have an unconditional right to defer settlement of the liability for at least twelve months after die balance sheet date.

All other liabilities are classified as non-current

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 above which are in accordance with the revised Schedule VI to the Act.

b. USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the Financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised In the period in which the results are known / materialize.

c TANGIBLE ASSETS

Fused Assets are stated at costof acquisition /construction or book value and includes amounts added on revaluation less accumulated depreciation and impairment loss, if any.

d. INTANGIBLE ASSETS

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumlated amortisation/ depletion.

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. DEPRECIATION

Depreciation on fixed assets is provided on straight line /written down value basis in accordance with the Companies Act, 1956-

i) Depreciation is provided at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956

(ii) Depreciation for the year is provided on the revalued cost of Assets and Is charged to the Profit and Loss Account. [Hi] Depreciation for the year on Intangible assets is provided at 100% and charged to the Profit and Loss Account

g. INVENTORIES

The inventory is valued as follows:

[i) Raw Materials At Cost Hirst in First out

[ii) Stores and Sparc parts At Cost First in First out

{iii) Fi nished Goods Va Lued at lower of cost or Net Reusable Value

(iv) Work in Process At cost by using absorption cost method.

As per normal practices the cost of finished goods includes all direct cost and normal fined overheads. However, it does not include selling and distribution cost Value of stockof finished goods at the date of Balance Sheet includes duties and taxes if any applicable.

h. RETIREMENT BENEFITS 1] GRATUITY

The Trustees of Ishan Dyes and Chemicals Limited Employees'' Gratuity Fund has a fund arrangement [cash accumulation policy] with Life Insurance Corporation of India (LIC) to administer Its gratuity benefit scheme. The contributions towards the said funds which are as determined by LIC are charged to revenue each year. Company ascertains the Liability towards Gratuity at the year-end and provision for the differential amount between the liability determined on Actuarial Valuation and Fund balance is provided in the books of account


Mar 31, 2013

1.1 Basis of Preparation of Financial Statements

The financial Statements are prepared under the historical cost convention on an accrual basis and are in conformity with the mandatory accounting standards and the provisions of the Companies Act, 1956 to the extent possible.

1.2 Use of Estimate

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of financial statements. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from estimates and assumptions used in preparing the accompanying financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.

1.3 Fixed Assets and Depreciation

1.3.1 Tangible Assets

Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of fixed Assets included pre-operative expenses incurred up to the date of commencement of commercial production (netting off by income arising during said period) and is net of recoverable taxes.

1.3.2 Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/ depletion. All costs, including financing costs till commencements of commercial production.

1.3.3 Depreciation

Depreciation on fixed assets is provided at the rate on Triple shift basis using straight line method in the manner specified in Schedule- XIV of the companies act, 1956 for the plant and machinery except plant of Beta Blue on which depreciation is provided on single shift basis. The Company provides pro-rata depreciation from the day the asset is ready for use and for any asset sold, till the date of sale.

1.4 Inventory: Valuation and Treatments of Costs:

1.4.1 The Inventory is valued as follows:

1) Raw Materials : At cost (FIFO method), net of Cenvat credit.

2) Stores & Spares : At cost (FIFO method)

3) Finished Goods : Valued at lower of cost or NRV

4) Work in Process : At cost by using absorption cost method.

1.4.2 As per normal practices the cost of finished goods includes all direct cost and normal fixed cost. However, it does not include selling and distribution cost. Values of stocks of finished goods at the date of Balance Sheet includes duties and taxes payable to comply with accounting standard of Income Tax Act. Provisions of such duty Its also made as duty and taxes payable in the accounts as on the date of Balance Sheet.

1.5 Revenue Recognition:

1.5.1 Sales: Sales are recognized at the time of dispatch of goods. All sales are shown net of excise duty, sales return, discount, and amount recovered towards VAT.

1.5.2 Other Income: Interest on deposits is accounted for an accrual basis. Dividend on shares is accounted on receipt basis. Export Incentives are recognized on accrual basis.

1.6 Provisions:

A provision is recognized when the company has a legal and constructive obligation as a result of past events, for which it is probable that cash outflows will be required and reliable estimates can be made of the amount of obligation.

1.7 Contingent Liabilities:

Contingent Liabilities are disclosed by the way of notes on accounts.

1.8 Capital Contribution:

Capital Contribution made towards Common Effluent Treatment Plant to Green Environment Service Co- Op. Society Ltd was shown under Long Term Loans & Advances as CETP was under construction in previous year. During the year under review as CETP construction was completed , it has been treated as Intangible Asset since the Company has ''right to use''.

1.9 Earning Per Share

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the period by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares, which could have been issued on the conversion of all dilutive potential shares. In computing dilutive earnings per shares, only potential equity shares that are dilutive and that increase loss per share are included.

1.10 Investments:

Investments are stated at cost of acquisition.

1.11 Retirement Benefits:

Contribution to Provident fund is charged to Profit and Loss accounts. Gratuity is charged to profit and loss accounts on the basis on actuarial valuation done. Leave encashment is charged to Profit & Loss accounts.

1.12 Accounting for Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realized in future.

1.13 Provisions, Contingent Liabilities and Contingent Assets:

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 outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financials Statements.

1.14 Change in Accounting Policies:

No change in accounting policy during the period under review.

1.15 Foreign exchange transactions.

The exports sales transactions are recorded at the prevailing on the date of sale or that approximates the actual rate at the transaction. Imports are recorded at the rate prevailing on the date of actual payments made. The Loss/Gain on exchange fluctuation is charged/credited to Profit and loss Account.

1.16 Impairment of Assets :

Fixed Assets are reviewed for impairment losses whenever events or changes in circumstances indicate that carrying amount may not be recoverable. And impairment loss is then recognized for the amount by which the carrying amount of the assets exceeds its recoverable amount, which is higher of the asset''s net selling price and value in use.


Mar 31, 2011

(A) General:

1. Basis of Preparation of Financial Statements

The Financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

2 Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of .revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.

B Fixed Assets and Depreciation:

1. Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation. The cost of Fixed Assets includes pre-operative expenses incurred up to the date of commencement of commercial production (netting off by income arising during said period.) and is net of recoverable taxes.

2. Entangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/ depletion. - All costs, including financing costs till commencement of commercial production.

3. Depreciation:

Depreciation on fixed Assets is provided at the rate on Triple shift basis using straight line method in the manner specified in Schedule-XIV of the Companies Act, 1956 for the plant & machinery except plant of Beta Blue on which depreciation is provided on single shift basis.

C. Inventory: Valuation and Treatment of Costs:

1. The inventory is valued as follows:

1 Raw Materials : At cost (FIFO method), net of Cenvat credit.

2 Stores & Spares : At cost (FIFO method)

3 Finished Goods : Valued at lower of cost or NRV

4 Work in Process : At cost by using absorption cost method.

2. As per normal practice the cost of finished goods includes all direct cost and normal fixed cost. However it does not include selling and distribution cost. Value of stocks of finished goods at the date of Balance Sheet includes duties and taxes payable to comply with accounting standard of Income Tax Act. Provision of such duty is also made as duty and taxes payable in the accounts as on the date of Balance Sheet.

(D) Revenue Recognition:

ii. Sales: Sales are recognized at the time of dispatch of goods. All sales are shown net of excise duty, sales returns, discount, shortage and amounts recovered towards VAT.

iii. Other Income: Interest on deposit is accounted for on accrual basis. Dividend on shares is accounted on receipt basis.

E. Provisions:

A provision is recognized when the company has a legal and constructive obligation as a result of past event, for which it is probable that cash outflow will be required and reliable estimate can be made of the amount of obligation.

F. Contingent Liabilities:

Contingent Liabilities are disclosed by way of notes on accounts.

G. Capital Contribution:

Capital Contribution made towards Common Effluent Treatment Plant to Green Vatva Co- op. Society is treated as deferred revenue expenses and considering its utility, the expenses are to be written off over a period of 10 years.

H. Investments:

Investments are stated at cost of acquisition.

I. Retirement Benefits:

Contribution to Provident fund is charged to profit and loss account. Gratuity is charged to profit and loss account on the basis on actuarial valuation done.

J. Change in Accounting Policy:

The 31st March 2011, company was accounting for gratuity on actual payment basis by charging to profit and loss account. To comply with As - 15, the management has changed policy for gratuity and company has obtained certificate from approved actuarial valuer with reference to total liability on account of gratuity as on 31 March 2011. Accordingly, the company has created reserve of Rs.8.23 Lacs being gratuity reserve by charging the amount to profit and loss account. Because of the change in accounting policy, the profit of the year is lower as compared to earlier year by equal amount and the amount reserves and surplus is higher by the same amount.

 
Subscribe now to get personal finance updates in your inbox!