Home  »  Company  »  Mawana Sugars Ltd.  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Mawana Sugars Ltd. Company

Dec 31, 2014

A) 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 Section 211(3C) of the Companies Act, ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") read with rule 7 of the Companies (Accounts) Rules, 2014) and the relevant provisions of the 1956 Act/ 2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

b) Use of Estimates:

The preparation of the financial statements in conformity with Indian GAAP requires the Management of the Company to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

c) Fixed assets:

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

Fixed assets acquired and put to use for project purpose are capitalised and depreciation thereon is included in the project cost till the project ready for its intended use.

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, related incidental expenses and attributable interest.

d) Depreciation and amortization:

i. The Company follows the straight-line method of depreciation (SLM).

ii. The rates of depreciation charged on all fixed assets are those specified in Schedule XIV to the Companies Act, 1956.

iii. On assets sold/discarded during the period, depreciation is provided up to the date of sale/ discard.

iv. Depreciation is calculated on a pro-rata basis from the date of acquisition/ installation of the asset and in case of assets costing up to Rs. 5,000 each such asset is fully depreciated in the financial year of purchase.

e) 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 includes acquisition charges such as brokerage, fees and duties.

f) Inventories:

Inventories are valued at lower of cost and net realisable value.

Cost of inventory is ascertained on the ''weighted average'' basis. Further, in respect of manufactured inventories i.e. process stocks and finished goods, an appropriate share of manufacturing expenses is included on absorption costing basis including excise duty.

g) Revenue recognition:

Sale of goods are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the dispatch of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

Renewable Energy Certificate (REC) is to be recognised as income on sale of REC.

h) Research and development expenditure:

Revenue expenditure on research and development is expensed out under the respective heads of account in the year in which it is incurred.

i) Employee benefits:

Defined contribution plans

The Company''s contribution to provident fund, pension scheme, employee state insurance corporation, etc. are considered as defined contribution plans and are charged as an expense as it falls due based on the amount of contribution required to be made and when services are rendered by the employees.

Defined benefit plans

For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in the statement of profit and loss in the period in which they occur. The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

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.

j) 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.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that future economic benefit associated with it will flow to the Company.

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.

k) Foreign exchange transactions:

Initial recognition

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates prevailing on the date of the transaction.

Measurement of foreign currency monetary items at the Balance Sheet date

Foreign currency monetary items (i.e. receivables, payables, loans etc) of the Company outstanding at the Balance Sheet date are restated at the year-end rates.

Treatment of exchange differences

The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous financial statements are recognised as income/ expense in the financial year in which they arise.

Accounting of forward contracts

In case of forward contracts, the premium or discount arising at the inception of such contracts is amortised as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting/settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognised as income/expense during the period.

l) Pre-operative expenses:

Pre-operative expenses, pending allocation represents indirect expenditure incurred during the construction periods which are allocated to capital/revenue on commissioning of the project.

m) Operating Lease:

Operating Lease receipts and payments are recognized as income or expense in the Statement of Profit and Loss on a Systematic basis over the lease term.

n) Cash flow statement:

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

o) Earnings per share:

Basic earnings per share are computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

p) 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 recognized 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.

q) 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 to the financial statements''.

r) Operating cycle:

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.


Sep 30, 2013

A) Basis of accounting and preparation of fnancial statements:

The fnancial 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 notifed under the Companies (Accounting Standards) Rules, 2006 (as amended and which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the Companies Act, 1956. The fnancial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the fnancial statements are consistent with those followed in the previous period.

b) Use of Estimates:

The preparation of the fnancial statements in conformity with Indian GAAP requires the Management of the Company to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the fnancial year. The Management believes that the estimates used in preparation of the fnancial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

c) Fixed assets:

Fixed assets are stated at cost of acquisition/ construction less accumulated depreciation. The cost includes all pre- operative expenses relating to construction period in the case of new projects and expansion of existing factories.

d) Depreciation and amortization:

i. The Company follows the straight-line method of depreciation (SLM).

ii. The rates of depreciation charged on all fxed assets are those specifed in Schedule XIV to the Companies Act, 1956. iii. On assets sold/discarded during the fnancial year, depreciation is provided up to the date of sale/ discard. i v. Depreciation is calculated on a pro-rata basis from the date of acquisition/ installation of the asset and in case of assets costing up to Rs. 5,000 each such asset is fully depreciated in the fnancial year of purchase.

e) Investments:

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Costs of investments include acquisition charges such as brokerage, fees and duties.

f) Inventories:

Stores and spares are valued at cost or under.

Raw materials, components, work-in-progress and fnished goods are valued at lower of cost and net realisable value.

Cost of inventory is ascertained on the ''weighted average'' basis. Further, in respect of manufactured inventories i.e. process stocks and fnished goods, an appropriate share of manufacturing expenses is included on absorption costing basis including excise duty.

g) Revenue recognition:

Sale of goods is recognised at the point of despatch of fnished goods to customers. Sales are inclusive of excise duty and exclusive of sales tax.

Income from Certifed Emission Reductions (CER) is recognized as income on sale of CER''s.

h) Research and development expenditure:

Revenue expenditure on research and development is expensed out under the respective heads of account in the period in which it is incurred.

i) Employee benefts:

Company''s contribution paid/payable during the fnancial year to provident fund, superannuation fund and employees'' state insurance corporation are recognised in the Statement of Proft and Loss. For the provident fund trusts administrated by the Company, it is liable to meet the shortfall, if any, in payment of interest at the rates prescribed by the Central Government and is recognised in the fnancial year of actual payment. Provision for gratuity and compensated absences are determined on an actuarial basis at the end of fnancial year and are charged to revenue.

j) Income-tax:

Provision for current taxation is ascertained on the basis of assessable profts computed in accordance with the provisions of the Income tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised on unabsorbed depreciation and carry forward of losses based on virtual certainty that suffcient future taxable income will be available against which such deferred asset can be realized.

k) Foreign exchange transactions:

Transactions in foreign currency are recorded on initial recognition at the exchange rates prevailing at the time of the transaction.

Monetary items (i.e. receivables, payables, loans etc) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date.

The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous fnancial statements are recognised as income/ expense in the fnancial year in which they arise.

In case of forward contracts, the premium or discount arising at the inception of such contracts is amortised as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting/settlement date and the exchange rate on the date of inception of contract / the last reporting date, is recognised as income/expense during the period.

l) Share/Debenture issue expenses and premium on redemption of debentures/ redeemable cumulative preference shares are written-off against share premium account.

m) Pre-operative expenses:

Pre-operative expenses, pending allocation represents indirect expenditure incurred during the construction period which are allocated to capital / revenue on commissioning of the project.

n) Operating Lease:

Operating Lease receipts and payments are recognized as income or expense in the Statement of Proft and Loss on a straight - line basis over the lease term.

o) Cash fow statement:

Cash fows are reported using the indirect method, whereby proft / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash fows from operating, investing and fnancing activities of the Company are segregated based on the available information.

p) Earnings per share:

Basic earnings per share are computed by dividing the proft / (loss) after tax by the weighted average number of equity shares outstanding during the fnancial year. Diluted earnings per share is computed by dividing the proft / (loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net proft per share.

q) 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 fows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized 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 Proft and Loss.

r) 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 outfow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefts) 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 refect the current best estimates. Contingent liabilities are disclosed in the Notes.

s) Operating cycle:

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classifcation of its assets and liabilities as current and non-current.


Mar 31, 2011

The financial statements have been prepared in accordance with applicable Accounting Standards and relevant presentational requirements of the Companies Act, 1956 and are based on the historical cost convention. The significant accounting policies followed are stated below:

(a) Fixed assets:

Fixed assets are stated at cost of acquisition/ construction less accumulated depreciation. The cost includes all pre-operative expenses relating to construction period in the case of new projects and expansion of existing factories.

(b) Depreciation:

i. The Company follows the straight-line method of depreciation (SLM).

ii. The rates of depreciation charged on all fixed assets are those specified in Schedule XIV to the Companies Act, 1956.

iii. On assets sold/discarded during the period/year, depreciation is provided up to the date of sale/ discard.

iv. Depreciation is calculated on a pro-rata basis from the date of acquisition/ installation of the asset and in case of assets costing up to Rs. 5,000 each such asset is fully depreciated in the period/year of purchase.

(c) Investments:

Long term investments valued at cost unless there is a decline in value other than temporary.

(d) Inventories:

Stores and spares are valued at cost or under.

Raw materials, components, work-in-progress and finished goods are valued at lower of cost and net realisable value.

Cost of inventory is ascertained on the 'weighted average' basis. Further, in respect of manufactured inventories i.e. process stocks and finished goods, an appropriate share of manufacturing expenses is included on absorption costing basis including excise duty.

(e) Revenue recognition:

Sale of goods is recognised at the point of despatch of finished goods to customers. Sales are inclusive of excise duty and exclusive of sales tax.

Income from Certified Emission Reductions (CER) is recognized as income on sale of CER's.

(f) Research and development expenditure:

Revenue expenditure on research and development is expensed out under the respective heads of account in the period/year in which it is incurred.

(g) Employee benefits:

Company's contribution paid/payable during the period/year to provident fund, superannuation fund and employees' state insurance corporation are recognised in the profit and loss. For the provident fund trusts administrated by the Company, the Company is liable to meet the shortfall, if any, in payment of interest at the rates prescribed by the Central Government, such shortfall is recognised in the year of actual payment. Provision for gratuity and compensated absences are determined on an actuarial basis at the end of period/ year and are charged to revenue each period/year.

(h) Income-tax:

Provision for current taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of being reversal in one or more subsequent periods. Deferred Tax assets are recognised on unabsorbed depreciation and-carry forward of losses based on virtual certainty that sufficient future taxable income will be available against which such deferred asset can be realized.

(i) Foreign exchange transactions:

Transactions in foreign currency are recorded on initial recognition at the exchange rates prevailing at the time of the transaction.

Monetary items (i.e. receivables, payables, loans etc) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date.

The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous financial statements are recognised as income/expense in the period/year in which they arise.

In case of forward contracts, the premium or discount arising at the inception of such contracts is amortised as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting/ settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognised as income/expense during the period/year. (j) Share/Debenture issue expenses and premium on redemption of debentures/ redeemable cumulative preference shares are written- off against share premium account.

(k) Pre-operative expenses:

Pre-operative expenses, pending allocation represents indirect expenditure incurred during the construction period which will be allocated to capital/ revenue on commissioning of the project.

(I) Operating Lease:

Operating Lease receipts and payments are recognized as income or expense in the profit and loss account on a straight - line basis over the lease term.

(m) Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balance of assets and liabilities, revenues and expenses and disclosures relating to contingent liabilities. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.


Sep 30, 2009

The financial statements have been prepared in accordance with applicable Accounting Standards and relevant presentational requirements of the Companies Act, 1956 and are based on the historical cost convention. The significant accounting policies followed are stated below:

(a) Fixed assets:

Fixed assets are stated at cost of acquisition/ construction less accumulated depreciation. The cost includes all pre-operative expenses relating to construction period in the case of new projects and expansion of existing factories.

(b) Depreciation:

(i) The Company follows the straight-line method of depreciation (SLM).

(ii) The rates of depreciation charged on all fixed assets are those specified in Schedule XIV to the Companies Act, 1956. (iii) On assets sold/discarded during the year/period, depreciation is provided up to the date of sale/ discard. (iv) Depreciation is calculated on a pro-rata basis from the date of acquisition/ installation of the asset and in case of assets costing up to Rs. 5,000 each such asset is fully depreciated in the year/period of purchase.

(c) Investments:

Investments are stated at cost less provision for permanent diminution in value of long-term investments, if any.

(d) Inventories:

Stores and spares are valued at cost or under.

Raw materials, components, work-in-progress and finished goods are valued at lower of cost and net realisable value.

Cost of inventory is ascertained on the weighted average basis. Further, in respect of manufactured inventories i.e. process stocks and finished goods, an appropriate share of manufacturing expenses is included on absorption costing basis including excise duty.

(e) Revenue recognition:

Sale of goods is recognised at the point of despatch of finished goods to customers. Sales are inclusive of excise duty and exclusive of sales tax.

Income from Certified Emission Reductions (CER) is recognized as income on sale of CERs.

(f) Research and development expenditure:

Revenue expenditure on research and development is expensed out under the respective heads of account in the year/period in which it is incurred.

(g) Employee benefits:

Companys contribution paid/payable during the year/period to provident fund, superannuation fund and employees state insurance corporation are recognised in the profit and loss. For the provident fund trusts administrated by the Company, the Company is liable to meet the shortfall, if any, in payment of interest at the rates prescribed by the Central Government, such shortfall is recognised in the year of actual payment. Provision for gratuity and compensated absences are determined on an actuarial basis at the end of year/ period and are charged to revenue each year/period.

(h) Income-tax:

Provision for current taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of being reversal in one or more subsequent periods. Deferred Tax assets are recognised on unabsorbed depreciation and carry forward of losses based on virtual certainty that sufficient future taxable income will be available against which such deferred asset can be realized.

(i) Foreign exchange transactions:

Transactions in foreign currency are recorded on initial recognition at the exchange rates prevailing at the time of the transaction.

Monetary items (i.e. receivables, payables, loans etc) denominated in foreign currency are reported using the closing exchange rate on each balance sheet date.

The exchange differences arising on the settlement of monetary items or on reporting these items at rates different from rates at which these were initially recorded/reported in previous financial statements are recognised as income/expense in the year/period in which they arise.

In case of forward contracts, the premium or discount arising at the inception of such contracts is amortised as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting/ settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognised as income/expense during the year/period.

(j) Share/Debenture issue expenses and premium on redemption of debentures/ redeemable cumulative preference shares are written- off against share premium account.

(k) Pre-operative expenses:

Pre-operative expenses, pending allocation represents indirect expenditure incurred during the construction period which will be allocated to capital/ revenue on commissioning of the project.

(l) Operating Lease:

Operating Lease receipts and payments are recognized as income or expense in the profit and loss account on a straight - line basis over the lease term.

 
Subscribe now to get personal finance updates in your inbox!