Notes to financial statements. 1. Corporate Information: Diligent Industries Limited is a public company engaged primarily in the business of processing of Oil seeds and refining of Bran Oil and Coconut oil. 2. Basis of brparation of financial Statements: The Financial statements have been brpared under the historical cost convention on accrual basis. The mandatory applicable accounting standards in India and the provisions of the companies Act, 2013 have been followed in brparation of these financial statements. All assets and liabilities have been classified as current or non-current as per the operating cycle criteria set out in the Revised Schedule III to the Companies Act, 2013. 3. Summary of significant accounting policies a. Use of Estimates: The brparation 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 recognized in the period in which the results are known/ materialized. b. Fixed Assets: Fixed assets are recognized at cost of acquisition and installation less accumulated debrciation. The cost comprises purchase price, fright, duties, levies, borrowing cost and directly attributable cost of bringing the assets to their working condition for intended use. Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its brviously assessed standard of performance or extend its estimated useful life. c. Debrciation and Amortization: Debrciation on fixed assets is provided on straight-line method using the lives of assets given in Schedule II of the Companies Act, 2013. d. Inventories: Raw materials are valued at lower of cost and net realizable value. Finished goods are valued at lower of cost and realizable value. Net realizable value is estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs necessary to make the sale Fixed assets are recognized at cost of acquisition and installation less accumulated debrciation. The cost comprises purchase price, fright, duties, levies, borrowing cost and directly attributable cost of bringing the assets to their working condition for intended use. Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its brviously assessed standard of performance or extend its estimated useful life. e. Revenue recognition: Sale of Products: Revenue is recognized only when it can be reliably measured and it is reasonable Revenue from operations includes sale of goods, services, sales tax, and excise duty. Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rates f. Taxation: i) Current Tax: provision for current income tax is made on the taxable income using the applicable tax rates and tax laws. ii) Deferred Tax: Deferred tax arising on account of timing differences and which are capable of reversal in one or more subsequent period(s) is recognized using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are not recognized unless there is virtual certainty with respect to the reversal of the same in future years. iii) Minimum Alternative Tax (MAT) credit: MAT is recognized as an asset only when and to the extent is convincing evidence that the company will pay normal income tax during the specified period in the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the guidance note issued by the ICAI. The said asset is created by way of a credit to the Statement of profit and loss and is shown as MAT credit entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of mat credit entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal income tax during the specified period. g. Retirement Benefits: Retirement benefits in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. h. Provisions and Contingent Liabilities: Provisions: Provisions are recognized when there is a brsent obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the brsent obligation at the Balance Sheet date and are not discounted to its brsent value. For Ramasamy Koteswara Rao & Co. Chartered Accountants irm Registration Number :010396S For and on behalf of the Board of Directors Diligent Industries Limited Sd/- Murali Krishna Reddy.Telluri Partner Membership No. 223022 Sd/- V.Bhanu Prakash Managing Director Sd/- V.Phani Anupama Director Sd/- V Kiran Kumar Director Date: 13th May, 2015 Place: Hyderabad |