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Accounting Policies of Jai Mata Glass Ltd. Company

Mar 31, 2014


Mar 31, 2010

1. Basis of Accounting :

Financial Statements are prepared under the historical cost convention on the basis of a going concern in accordance with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.

2. Income & Expenditure :

Accounting of Income & Expenditure is done on accrual basis. Sales are recognized when goods are dispatched to customers. Sales are recorded at invoice value and exclude Sales Tax.

3. Fixed Assets & Depreciation :

a) Fixed Assets are stated at their original cost of acquisition inclusive of freight, duties levies and any directly attributable cost of bringing the assets to the working condition for intended use.

b) Depreciation on fixed assets has been provided on Straight Line Method and at the rates and the manner specified in Schedule XIV to the Companies Act, 1956.

c) Depreciation on the acquisition/purchase of assets during the year has been provided on pro- rata basis according to period each asset was put to use during the year.

d) Expenditure on renovation/ modernization relating to existing fixed assets is added to the cost of such assets where it increases its performance / life significantly.

4. Inventories:

Inventories are valued at cost or market value which ever is lower. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost is computed on weighted average/ FIFO basis. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company. Goods in transit are valued at cost, which represents the costs incurred up to the stage at which the goods are in transit.

5. Governments Grants:

Capital grants related to specific assets are reduced from the gross value of the Fixed Assets.

6. Borrowing Cost:

Interest Cost relating to (i) funds borrowed for acquisition of fixed assets are capitalized and (ii) funds borrowed for other purposes are charged to Profit and Loss Account.

7. Taxes on Income :

Provision for current tax is made considering the provisions of Income Tax Act, 1961. Deferred tax is recognized subject to the consideration of prudence, on timing difference, being the differences between Book profit and tax profit that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized only if there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

8. Foreign Currency Transactions :

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities in foreign currency existing at balance sheet date are translated at the exchange rate prevailing on that date. Exchange differences in case of borrowed funds and liabilities in foreign currency for the acquisition of fixed assets from a country outside India are adjusted to the cost of fixed assets. All other exchanges differences are recognized in Profit and Loss Account.

9. Retirement Benefits:

a) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contribution is charged to the Profit & Loss Account. There are no other obligations other then the contribution payable to the said fund.

b) Gratuity liability is defined benefit obligations and are provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year and in conformity with Accounting Standard -15.

c) Liability for leave encashment is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

d) Actuarial gains/ losses are immediately taken to the Profit & Loss Account and are not deferred.

10. Impairment of Assets:

An asset is treated as impaired, when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is charged to profit and loss account, in the year in which an asset is identified as impaired.

11. Provisions /Contingencies:

Provision 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 an outflow of resource. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statement.