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Accounting Policies of Archidply Industries Ltd. Company

Mar 31, 2015

1. BASIS OF ACCOUNTING:

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principle (GAAP), and in compliance with the Accounting Standards referred to in Section 133 and other requirements of the Companies Act, 2013.

2. USE OF ESTIMATES:

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of financial statements are correct. Examples of such estimates include the useful lives of fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates.

3. FIXED ASSETS: TANGIBLE & INTANGIBLE

a) Tangible Fixed Assets are stated at cost less accumulated Depreciation and impairment loss if any. Cost comprises of purchase price and any attributable cost of bringing the assets to its working conditions for its intended use. Revenue expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production are treated as preoperative expenses and will be written off over five years.

b) Intangible assets are stated at cost less accumulated amortization. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

4. DEPRECIATIoN & AMoRTIzATIoNS:

a) Depreciation on the fixed assets has been provided on Straight line Method at the rates and in the manner prescribed in schedule II to the Companies Act, 2013 over the useful life of the assets prescribed as per schedule II of the Companies Act, 2013.

b) As per Transitional provision under Schedule II when the remaining useful life of the asset is Nil, the residual value of those assets have been charged to statement of Profit & Loss Account under the head Depreciation.

c) Depreciation on additions/ deductions is calculated prorata from/to the date of additions/ deductions.

d) Intangible assets are amortized over their estimated useful life on straight line basis over a period of 20 years.

e) Preliminary and Demerger expenses are amortized over a period of five years.

5. IMPAIRMENT:

The carrying amounts of the assets are reviewed at each balance sheet date if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to Profit & Loss account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years is recorded when there is an indication that impairment losses recognized for the assets no longer exists or has decreased.

6. LEASES:

Lease payments under an operating lease recognized as an expense in the statement of profit and loss as per terms of lease agreement.

7. INVESTMENTS:

a) Long term Investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

b) Current investments are stated at lower of cost and fair value.

8. INVENToRIES:

a) Inventories related to raw materials, packing materials, stores & spares are valued at cost on weighted average basis or net realisable value which ever is lower.

b) Waste & scraps are valued at net realizable value.

c) Materials in transit and Semi Finished goods are valued at cost or market value which ever is lower.

d) Finished goods and process stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

e) Finished goods are valued at cost or net realizable value whichever is lower. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.

f) Obsolete, defective and unserviceable stocks are duly provided for.

9. foreign CURRENCY transactions:

Foreign currency transactions are accounted for at the rates prevailing on the dates of the transactions/ converted at contracted rate. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered are restated at year end rate. Premium in respect of forward contract is recognized over the life of contracts. Exchange differences relating to fixed assets acquired from a country outside India are adjusted to the cost of the asset. 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. Hedging Charges on foreign currency term loan obtained for the purchases of fixed assets is added to the cost of the asset. Any other exchange difference is dealt with in the Profit and Loss Account.

10. RETIREMENT BENEFITS:

Provisions for / contributions to retirement benefits schemes are made as follows:

a) Fixed Contribution to Provident fund and other benefits are recognized in the accounts on actual cost to the Company.

b) Liability for leave encashment & gratuity are provided based on the valuation done by the Actuarial appointed by the Company at the end of the year.

11. REVENUE RECOGNITION:

a) Sales revenue is recognized on the transfer of significant risk and rewards of the ownership of goods to the buyer.

b) Interest income and expenses and income incidental to it, are accounted for on an accrual basis.

12. BORROWING COST:

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are being capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

13. TAXATION:

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per the Income Tax Act, 1961. Deferred Tax resulting from "timing difference" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty except for carried forward losses and unabsorbed depreciation which is recognized on virtual certainty that the assets will be realized in future.

14. PROVIsION, CONTINGENT LIABILITIEs AND CONTINGENT AssETs:

Provision is recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. No provision is recognized or disclosure for contingent liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial statements.

15. REsEARCH AND DEVELOPMENT:

Expenditure incurred during research phase is charged to revenue when no intangible asset arises from such research. Assets procured on research and development activities are generally capitalized.


Mar 31, 2014

1. BASIS OF ACCOUNTING:

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principle (GAAP), and in compliance with the Accounting Standards referred to in section 211 (3C) and other requirements of the Companies Act, 1956.

2. USE OF ESTIMATES:

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of financial statements are correct. Examples of such estimates include the useful lives of fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates.

3. FIXED ASSETS: TANGIBLE & INTANGIBLE

a) Tangible Fixed Assets are stated at cost less accumulated Depreciation and impairment loss if any. Cost comprises of purchase price and any attributable cost of bringing the assets to its working conditions for its intended use. Revenue expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production are treated as preoperative expenses and will be written off over five years.

b) Intangible assets are stated at cost less accumulated amortization. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

4. DEPRECIATION & AMORTIZATIONS:

a) Depreciation on fixed assets has been provided for on straight line method at the rates and manner prescribed under schedule XIV to the Companies Act, 1956, of India.

b) Depreciation on additions/ deductions is calculated prorata from/to the date of additions/ deductions.

c) Intangible assets are amortized over their estimated useful life on straight line basis over a period of 20 years.

d) Prelimnary and Demerger expenses are amortized over a period of five years.

5. IMPAIRMENT:

The carrying amounts of the assets are reviewed at each balance sheet date if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to Profit & Loss account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years is recorded when there is an indication that impairment losses recognized for the assets no longer exists or has decreased.

6. LEASES:

Lease payments under an operating lease recognized as an expense in the statement of profit and loss as per terms of lease agreement.

7. INVESTMENTS:

a) Long term Investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

b) Current investments are stated at lower of cost and fair value.

8. INVENTORIES:

a) Inventories related to raw materials, packing materials, stores & spares are valued at cost on weighted average basis or net realisable value which ever is lower.

b) Waste & scraps are valued at net realizable value.

c) Materials in transit and Semi Finished goods are valued at cost or market value which ever is lower.

d) Finished goods and process stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

e) Finished goods are valued at cost or net realizable value whichever is lower. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.

f) Obsolete, defective and unserviceable stocks are duly provided for.

9. FOREIGN CURRENCY TRANSACTIONS:

Foreign currency transactions are accounted for at the rates prevailing on the dates of the transactions/ converted at contracted rate. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered are restated at year end rate.

Premium in respect of forward contract is recognized over the life of contracts. Exchange differences relating to fixed assets acquired from a country outside India are adjusted to the cost of the asset. 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. Hedging Charges on foreign currency term loan obtained for the purchases of fixed assets is added to the cost of the asset. Any other exchange difference is dealt with in the Profit and Loss Account.

10. RETIREMENT BENEFITS:

Provisions for / contributions to retirement benefits schemes are made as follows:

a) Fixed Contribution to Provident fund and other benefits are recognized in the accounts on actual cost to the Company.

b) Liability for leave encashment & gratuity are provided based on the valuation done by the Company at the end of the year.

11. REVENUE RECOGNITION:

a) Sales revenue is recognized on the transfer of significant risk and rewards of the ownership of goods to the buyer.

b) Interest income and expenses and income incidental to it, are accounted for on an accrual basis.

12. BORROWING COST:

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are being capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

13. TAXATION:

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per the Income Tax Act, 1961. Deferred Tax resulting from "timing difference" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty except for carried forward losses and unabsorbed depreciation which is recognized on virtual certainty that the assets will be realized in future.

14. provision, contingent liabilities and

CONTINGENT ASSETS:

Provision is recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. No provision is recognized or disclosure for contingent liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial statements.

15. RESEARCH AND DEVELOPMENT:

Expenditure incurred during research phase is charged to revenue when no intangible asset arises from such research. Assets procured on research and development activities are generally capitalized.


Mar 31, 2013

1. BAsIs OF ACCOUNTING :

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principle (GAAP), and in compliance with the Accounting Standards referred to in section 211 (3C) and other requirements of the Companies Act, 1956.

2. UsE OF EsTIMATEs :

The preparation of fnancial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of fnancial statements are correct. Examples of such estimates include the useful lives of fxed assets, provision for doubtful debts/advances, future obligations in respect of retirement beneft plans, etc. Actual results could difer from these estimates.

3. FIXED AssETs : TANGIBLE & INTANGIBLE

a) Tangible Fixed Assets are stated at cost less accumulated Depreciation and impairment loss if any. Cost comprises of purchase price and any attributable cost of bringing the assets to its working conditions for its intended use. Revenue expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production are treated as preoperative expenses and will be written of over fve years.

b) Intangible assets are stated at cost less accumulated amortization. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

4. DEPRECIATION & AMORTIzATIONs :

a) Depreciation on fxed assets has been provided for on straight line method at the rates and manner prescribed under schedule XIV to the Companies Act, 1956, of India.

b) Depreciation on additions/ deductions is calculated prorata from/to the date of additions/ deductions.

c) Intangible assets are amortized over their estimated useful life on straight line basis over a period of 20 years.

d) Prelimnary and Demerger expenses are amortized over a period of fve years.

5. IMPAIRMENT :

The carrying amounts of the assets are reviewed at each

balance sheet date if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to Proft & Loss account in the year in which the asset is identifed as impaired. Reversal of impairment loss recognized in prior years is recorded when there is an indication that impairment losses recognized for the assets no longer exists or has decreased.

6. LEAsEs :

Lease payments under an operating lease recognized as an expense in the statement of proft and loss as per terms of lease agreement.

7. INVEsTMENTs :

a) Long term Investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

b) Current investments are stated at lower of cost and fair value.

8. INVENTORIEs :

a) Inventories related to raw materials, packing materials, stores & spares are valued at cost on weighted average basis or net realisable value which ever is lower.

b) Waste & scraps are valued at net realizable value.

c) Materials in transit and Semi Finished goods are valued at cost or market value which ever is lower.

d) Finished goods and process stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

e) Finished goods are valued at cost or net realizable value whichever is lower. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.

f) Obsolete, defective and unserviceable stocks are duly provided for.

9. FOREIGN CURRENCY TRANsACTIONs :

Foreign currency transactions are accounted for at the rates prevailing on the dates of the transactions/ converted at contracted rate. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered are restated at year end rate. Premium in respect of forward contract is recognized over the life of contracts. Exchange diferences relating to fxed assets acquired from a country outside India are adjusted to the cost of the asset. Exchange diferences in case of borrowed funds and liabilities in foreign currency for the acquisition of fxed assets from a country outside India are adjusted to the cost of fxed assets. Hedging Charges on foreign currency term loan obtained for the purchases of fxed assets is added to the cost of the asset. Any other exchange diference is dealt with in the Proft and Loss Account.

10. RETIREMENT BENEFITs :

Provisions for / contributions to retirement benefts schemes are made as follows:

a) Fixed Contribution to Provident fund and other benefts are recognized in the accounts on actual cost to the Company.

b) Liability for leave encashment & gratuity are provided based on the valuation done by the Company at the end of the year.

11. REVENUE RECOGNITION :

a) Sales revenue is recognized on the transfer of signifcant risk and rewards of the ownership of goods to the buyer.

b) Interest income and expenses and income incidental to it, are accounted for on an accrual basis.

12. BORROWING COsT :

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are being capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

13. TAXATION :

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per the Income Tax Act, 1961. Deferred Tax resulting from "timing diference" between book and taxable proft for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty except for carried forward losses and unabsorbed depreciation which is recognized on virtual certainty that the assets will be realized in future.

14. PROVIsION, CONTINGENT LIABILITIEs AND CONTINGENT AssETs :

Provision is recognized when there is a present obligation as a result of a past event that probably requires an outfow of resources and a reliable estimate can be made of the amount of the obligation. Disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outfow of resources. No provision is recognized or disclosure for contingent liability is made when there is a possible obligation or a present obligation and the likelihood of outfow of resources is remote. Contingent Asset is neither recognized nor disclosed in the fnancial statements.

15. REsEARCH AND DEVELOPMENT :

Expenditure incurred during research phase is charged to revenue when no intangible asset arises from such research. Assets procured on research and development activities are generally capitalized.


Mar 31, 2012

1. BASIS OF ACCOUNTING :

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with Generally Accepted Accounting Principle (GAAP) and in compliance with the Accounting Standards referred to in Section 211 (3C) and other requirements of the Companies Act, 1956.

2. USE OF ESTIMATES :

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of financial statements are correct. Examples of such estimates include the useful lives of fixed assets, provision for doubtful debts / advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates.

3. FIXED ASSETS : TANGIBLE & INTANGIBLE

a) Tangible Fixed Assets are stated at cost less accumulated Depreciation and impairment loss if any. Cost comprises of purchase price and any attributable cost of bringing the assets to its working conditions for its intended use. Revenue expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production are treated as preoperative expenses and will be written off over five years.

b) Intangible assets are stated at cost less accumulated amortization. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

4. DEPRECIATION & AMORTIZATIONS :

a) Depreciation on fixed assets has been provided for on straight line method at the rates and manner prescribed under Schedule XIV to the Companies Act, 1956, of India.

b) Depreciation on additions / deductions is calculated prorata from / to the date of additions / deductions.

c) Intangible assets are amortized over their estimated useful life on straight line basis over a period of 20 years.

d) Preliminary and Demerger expenses are amortized over a period of five years.

5. IMPAIRMENT :

The carrying amounts of the assets are reviewed at each balance sheet date if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to Profit & Loss account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years is recorded when there is an indication that impairment losses recognized for the assets no longer exists or has decreased.

6. LEASES :

Lease payments under an operating lease recognized as an expense in the statement of profit and loss as per terms of lease agreement.

7. INVESTMENTS :

a) Long term Investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

b) Current investments are stated at lower of cost and fair value.

8. INVENTORIES :

a) Inventories related to raw materials, packing materials, stores & spares are valued at cost on weighted average basis or net realisable value which ever is lower.

b) Waste & scraps are valued at net realizable value.

c) Materials in transit and Semi Finished goods are valued at cost or market value which ever is lower.

d) Finished goods and process stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

e) Finished goods are valued at cost or net realizable value whichever is lower. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.

f) Obsolete, defective and unserviceable stocks are duly provided for.

9. FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are accounted for at the rates prevailing on the dates of the transactions / converted at contracted rate. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered are restated at year end rate. Premium in respect of forward contract is recognized over the life of contracts. Exchange differences relating to fixed assets acquired from a country outside India are adjusted to the cost of the asset. 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. Any other exchange difference is dealt with in the Profit and Loss Account.

10. RETIREMENT BENEFITS :

Provisions for / contributions to retirement benefits schemes are made as follows :

a) Fixed Contribution to Provident fund and other benefits are recognized in the accounts on actual cost to the Company.

b) Liability for leave encashment & gratuity are provided based on the valuation done by the Company at the end of the year.

11. REVENUE RECOGNITION :

a) Sales revenue is recognized on the transfer of significant risk and rewards of the ownership of goods to the buyer.

b) Interest income and expenses and income incidental to it, are accounted for on an accrual basis.

12. BORROWING COST :

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are being capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

13. TAXATION :

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per the Income Tax Act, 1961. Deferred Tax resulting from "timing difference" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty except for carried forward losses and unabsorbed depreciation which is recognized on virtual certainty that the assets will be realized in future.

14. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :

Provision is recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. No provision is recognized or disclosure for contingent liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial statements.

15. RESEARCH AND DEVELOPMENT :

Expenditure incurred during research phase is charged to revenue when no intangible asset arises from such research. Assets procured on research and development activities are generally capitalized.


Mar 31, 2011

1.Basis of Accounting:

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principle (GAAP), and in compliance with the Accounting Standards referred to in section 211 (3C) and other requirements of the Companies Act, 1956.

2.Use of Estimates:

The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of financial statements are correct. Examples of such estimates include the useful lives of fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates.

3.Fixed Assets: Tangible & Intangible

a)Tangible Fixed Assets are stated at cost less accumulated Depreciation and impairment loss if any. Cost comprises of purchase price and any attributable cost of bringing the assets to its working conditions for its intended use. Revenue expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production are treated as preoperative expenses and will be written off over five years.

b)Intangible assets are stated at cost less accumulated amortization. Cost includes any directly attributable expenditure on making the asset ready for its intended use.

4.Depreciation & Amortizations:

a)Depreciation on fixed assets has been provided for on straight line method at the rates and manner prescribed under schedule XIV to the Companies Act, 1956, of India.

b)Depreciation on additions/ deductions is calculated prorata from/to the month of additions/ deductions.

c)Intangible assets are amortized over their estimated useful life on straight line basis over a period of 20 years.

d)Prelimnary and Demerger expenses are amortized over a period of five years.

5.Impairment:

The carrying amounts of the assets are reviewed at each balance sheet date if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to Profit & Loss account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years is recorded when there is an indication that impairment losses recognized for the assets no longer exists or has decreased.

6.Leases:

Lease payments under an operating lease recognized as an expense in the statement of profit and loss as per terms of lease agreement.

7.Investments:

a)Long term Investments are carried at cost after deducting provision, if any, for diminution in value considered to be other than temporary in nature.

b)Current investments are stated at lower of cost and fair value.

8.Inventories:

a)Inventories related to raw materials, packing materials, stores & spares are valued at cost on weighted average basis or net realisable value which ever is lower.

b)Waste & scraps are valued at net realizable value.

c)Materials in transit and Semi Finished goods are valued at cost or market value which ever is lower.

d)Finished goods and process stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

e)Finished goods are valued at cost or net realizable value whichever is lower. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.

f)Obsolete, defective and unserviceable stocks are duly provided for.

9. Foreign Currency Transactions:

Foreign currency transactions are accounted for at the rates prevailing on the dates of the transactions / converted at contracted rate. Foreign currency assets and liabilities covered by forward contracts are stated at the forward contract rates while those not covered are restated at year end rate. Premium in respect of forward contract is recognized over the life of contracts. Exchange differences relating to fixed assets acquired from a country outside India are adjusted to the cost of the asset. 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. Any other exchange difference is dealt with in the Profit and Loss Account.

10. Retirement Benefits:

Provisions for / contributions to retirement benefits schemes are made as follows:

a)Fixed Contribution to Provident fund and other benefits are recognized in the accounts on actual cost to the Company.

b)Liability for leave encashment & gratuity are provided based on the valuation done by the Company at the end of the year.

11. Revenue Recognition:

a)Sales revenue is recognized on the transfer of significant risk and rewards of the ownership of goods to the buyer. b)Interest income and expenses and income incidental to it, are accounted for on an accrual basis.

12. Borrowing Cost:

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are being capitalized. Other borrowing costs are recognized as expenses in the period in which they are incurred. In determining the amount of borrowing costs eligible for capitalization during a period, any income earned on the temporary investment of those borrowings is deducted from the borrowing costs incurred.

13. Taxation:

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per the Income Tax Act, 1961. Deferred Tax resulting from "timing difference" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax a sset is recognized a nd carried forward only to the extent that there is a reasonable certainty except for carried forward losses and unabsorbed depreciation which is recognized on virtual certainty that the assets will be realized in future.

14. Provision, Contingent Liabilities and Contingent Assets:

Provision is recognized when there I s a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. No provision is recognized or disclosure for contingent liability is made when there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote. Contingent Asset is neither recognized nor disclosed in the financial statements.

15. Research and Development:

Expenditure incurred during research phase is charged to revenue when no intangible asset arises from such research. Assets procured on research and development activities are generally capitalized.





 
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