Home  »  Company  »  Jindal Worldwide  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Jindal Worldwide Ltd. Company

Mar 31, 2015

A) BASIS OF ACCOUNTING

The financial statements have been prepared on mercantile basis of accounting in accordance with the historical cost convention in accordance with the generally accepted accounting principles in India and the relevant provisions of Companies Act, 2013.

B) USE OF ESTIMATES

The preparation of financial statements requires certain estimates and assumption to be made that effect the reported amount of assets and liabilities as 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.

C) FIXED ASSETS

Fixed Assets are stated at their cost of acquisition including expenses less accumulated depreciation and impairment losses, if any. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

D) INVESTMENTS

Current Investments are carried at the lower of cost or quoted / fair value. Long Term Investments are stated at cost. Provision for diminution in the value of long term investment made only if such a decline is other than temporary in the opinion of the management.

E) INVENTORIES

(a) Raw Materials, Work in Process and consumables are valued at cost.

(b) Inventories of finished goods are valued at cost or net realisable value, whichever is lower

F) PRELIMINARY AND PUBLIC ISSUE EXPENSES

Preliminary expenses are written off in ten equal annual installments.

G) REVENUE RECOGNITION

Revenue is recognised when the significant risks and rewards of ownership of goods have been passed to the buyer. Other income such as Export benefits, interest etc., are recognised on accrual basis only when it is reasonably certain that the ultimate collection will be made.

H) DEPRECIATION

Depreciation on fixed assets is provided based on the useful life of the asset in the manner prescribed in Schedule II to the Companies Act, 2013.

I) FOREIGN EXCHANGE TRANSACTIONS

a. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of settlement of transactions. Foreign currency transactions remaining unsettled at the end of the year are recorded at the rate prevailing as on 31st March 2015.

b. The net gain or loss on account of exchange differences arising on settlement of foreign currency transactions are recognized as income or expenses of the period in which they arise except that exchange differences related to acquisition of fixed assets are adjusted in the carrying amount of the related fixed assets.

J) CONTINGENT LIABILITY

Contingent liabilities are disclosed by way of notes on the balance sheet. As no contingency is likely to be materialised into liability after the year end till the finalisation of accounts and have material effect on the position stated in Balance Sheet, no provision was made in terms of Accounting Standard 29 on "Provisions, Contingent Liabilities and Contingent Assets".

K) PROVISION FOR CURRENT & DEFFERED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deffered tax resulting from "timing difference" between book and taxable profit is accounted for using tax rates and laws that have been enacted as on the balance sheet date. The deffered tax asset is recognised and carried forward only to the extent that there is virtual certainity that the future taxable income would be available.

L) RETIREMENT BENEFITS

Company's Contribution to Provident Fund and Employee State Insu. Premium are charged to Statement of Profit and Loss. Retirement benefits are being accounted for on cash basis.

M) GOVERNMENT GRANTS

Government Grants are recognised where there is reasonable assurance that the Company has complied with the conditions attached to them and that the grant will be received. Central Grants are recognised in the statement of Profit and Loss by reducing financial cost and state grants are shown under other income. For the current financial year, provision of Rs. 2,27,09,183 is made for State Interest subsidy for project of Jindal Spinning Unit. The subsidy amount is subject to approval from the State Government.




Mar 31, 2012

A) METHODOLOGY OF ACCOUNTING

The Accounts have been prepared as per historical cost convention on an accrual basis.

B) USE OF ESTIMATES

The Preparation of Financial statements requires the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of financial statements and reported amounts of income and expenses during the period.

C) FIXED ASSETS

Fixed Assets are stated at their cost of acquisition including expenses less accumulated depreciation and impairment losses.

As asset is considered as impaired in accordance with Accounting Standard 28 on "impairment of Assets," when at balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds it recoverable amount (i.e. the higher of the asset's net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the profit and loss account.

D) INVESTMENTS

Investments are classified as current or long-term in accordance with the Accounting Standard 13 on "Accounting for Investments".

Current Investments are carried at the lower of cost or quoted / fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long term investment made only if such a decline is other than temporary in the opinion of the management.

E) INVENTORIES

(a) Raw Materials, Work in Process and consumables are valued at cost.

(b) Inventories of finished goods are valued at lower of cost or market value.

F) PRELIMINARY AND PUBLIC ISSUE EXPENSES

Preliminary expenses are written off in five equal annual installments except preliminary expenses of two divisions, which are being written off in ten equal annual installments.

G) SALES

Sales are accounted at realizable value and export sales are accounted as per the date of bill of lading.

H) DEPRECIATION

Depreciation is provided on straight line method in accordance with provision of section 205(2)(b) and at the rates prescribed in schedule XIV of the Companies Act, 1956 and any amendment there to from time to time, on pro rata basis with respect to the period of use. Depreciation on New assets purchased is provided from the beginning of the next month after the end of the month in which addition to new assets has taken place, or the date of putting the assets to the use, whichever is later.

I) FOREIGN EXCHANGE TRANSACTIONS

a. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of settlement of transactions. Foreign currency transactions remaining unsettled at the end of the year are recorded at the rate prevailing as on 31st March 2012.

b. The net gain or loss on account of exchange differences arising on settlement of foreign currency transactions are recognized as income or expenses of the period in which they arise except that exchange differences related to acquisition of fixed assets are adjusted in the carrying amount of the related fixed assets.

Pursuant to the notification of the Companies (Accounting Standards) Amendment Rules 2006 on 31.03.2012, which amended Accounting Standard 11 on "The Effects of changes in Foreign Exchange Rates", exchange differences relating to long-term monetary items are dealt with in the following manner. Exchange differences relating to long-term monetary items, arising during the year, in so far as they relate to the acquisition of a depreciable capital asset are added to/deducted from the cost of the asset and depreciated over balance life of the asset.

J) CONTINGENT LIABILITY

Contingent liabilities are disclosed by way of notes on the balance sheet. As no contingency is likely to be materialised into liability after the year end till the finalisation of accounts and have material effect on the position stated in Balance Sheet, no provision was made in terms of Accounting Standard 29 on "Provisions, Contingent Liabilities and Contingent Assets".

K) PROVISION FOR CURRENT & DEFFERED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deffered tax resulting from "timing difference" between book and taxable profit is accounted for using tax rates and laws that have been enacted as on the balance sheet date. The deffered tax asset is recognised and carried forward only to the extent that there is virtual certainity that the future taxable income would be available.

L) RETIREMENT BENEFITS

Company's Contribution to Provident Fund and Employee State Insu. Premium are charged to Profit & Loss A/c. In Made ups division, Gratuity and other retirement benefits are provided for on the basis of valuation. In other Divisions retirement benefits are being accounted for on cash basis.

M) REVENUE RECOGNITION

Revenue in respect of Export benefits, interest and other claims is recognized only when it is reasonably certain that the ultimate collection will be made.

N) SUBSIDY UNDER TUF SCHEME

Capital Subsidy has been shown under Capital Reserve A/c and 1/10 of amount is being offered as Income every year. Interest Subsidy has been shown by reducing the amount of interest paid on Term Loan.


Mar 31, 2010

A. ACCOUNTING CONVENTIONS:

The accompanying financial statements have been prepared on accrual basis in accordance with the historical cost conventions.

B. REVENUE RECOGNITION

(i) Sales Revenue is recognized on dispatch of goods net of trade discount, cash discount and sales tax.

(ii) The Revenue in respect of Export benefits, is recognized on post export basis at the rate, at which the entitlement accrues. Such amount is included under the head sales.

C. INVENTORY VALUATION

Inventories are valued at cost or net realisable value whichever is lower. The cost in respect of following items is computed as under:

(i) In case of Raw Material and Stores & Spares on FIFO basis plus direct expenses, except in case of Oswal Cotton Spinning Mills on specific identification method.

(ii) In case of Work-in-Process at raw material cost plus conversion cost depending on the stage of completion.

(iii) In case of Finished Goods, at weighted average of raw material cost plus conversion cost, packing cost and other overheads incurred to bring the inventory to their present condition and location.

D. FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of inward freight, duties and taxes & incidental expenses related to acquisition except Land at Jugiana which was acquired before 01-04-1987, has been stated at revalued amount. In respect of project involving construction, related pre-operational expenses form part of the value of Assets capitalised

E DEPRECIATION

i) Depreciation has been provided in accordance with Schedule XIV of the Companies Act, 1956. The Depreciation has been provided on SLM basis except for Vanaspati unit where it is on WDV basis. Besides relying upon expert opinion obtained by the management, depreciation on specified items of plant & machinery has been provided at the rates prescribed for continuous process plant.

ii) Depreciation on addition to assets costing below Rs. 5000/- has been charged on 100% basis.

F INVESTMENTS

Investments are valued at cost less any diminution in their value, which is of permanent nature.

G RETIREMENT BENEFITS:

A) SHORT TERM EMPLOYEE BENEFITS:

Short Term Employee benefits are recognized on an undiscounted basis in the Profit & Loss Account of the year in which the related service is rendered.

B) POST EMPLOYMENT BENEFITS:

(i) PROVIDENT FUND

Benefits to employees are provided for by contribution to Provident and other funds, the payment of which are accounted for on accrual basis.

(ii) GRATUITY

Provision for gratuity liability to employees is made on basis of actuarial valuation as at the year end.

(iii) LEAVE WITH WAGES

Provision for Leave with wages is on basis of actuarial valuation as at the year end.

H. BORROWING COST:

Borrowing costs that are directly attributable to acquisition or construction of qualifying assets are treated as part of cost of capital asset. Other borrowing cost is treated as expenses for the period in which they are incurred.

I. FOREIGN CURRENCY TRANSACTIONS:

All foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Assets & Liabilities related to Foreign Currency transactions remaining unsettled during the period are converted into rupees at exchange rates prevailing on the balance sheet date, except those covered by forward contracts. Gain or losses on transaction of current assets and current liabilities is adjusted in the profit & loss account for the year.

J. TAXES ON INCOME

(i) The accounting treatment followed for taxes on income is to provide for current tax and deferred tax. Current tax is the amount of tax payable in respect of taxable income for a period. Deferred tax is the effect of timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal on one or more subsequent periods. Deferred tax assets are not recognized, unless there is virtual certainty that sufficient future taxable income will be available against which, such deferred tax assets can be realised.

K. IMPAIRMENT OF ASSETS

1. Fixed Assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount, by which the assets carrying amount exceeds its recoverable amount viz the higher of the assets fair value less costs to sell and value in use.

2) Cumulative Redeemable Preference Shares are redeemable in five equal annual installments starting from 11th year from date of allotment i.e. 12.11.2007. However, the company has option to redeem these Cumulative Redeemable Preference Shares earlier at their Net Present Value.

 
Subscribe now to get personal finance updates in your inbox!