Home  »  Company  »  Axel Polymers Li  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Axel Polymers Ltd. Company

Mar 31, 2015

1.1. Basis of preparation of financial statements

The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the generally accepted accounting principles, Accounting Standards referred to in section 133 the Act, read with rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions thereof.

1.2. Use of estimates

The preparation of financial statement requires management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and reported

1.3. Inventories

Inventories are Valued at lower of cost or net realizable value. Valuation is ascertained on following basis.

a. Raw materials, stores, spares and consumables on FIFO basis.

b. Semi-finished goods and finished goods, cost includes direct material and labour and proportion of manufacturing overheads on FIFO basis. Cost of finished goods includes excise duty.

1.4. Cash and Cash Equivalents:

The cash flow statements is prepared by the "Indirect Method" set out in Accounting Standard 3 on "Cash Row Statement' and presents the cash flow by Operating, Investing & Financing activities of the company. Cash and Cash Equivalents for the purpose of Cash Row Statement comprise cash at bank and in hand and shortterm Investment with the Original Maturity of 3 months or less.

1.5. Fixed assets and depreciation

Fixed assets are stated at cost less accumulated depreciation and impairment, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises of the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment

The depreciation during the year has been provided on straight line basis as per Schedule II of the Companies act 2013 since the acquisition of respective fixed assets. ln earlier years depreciation was provided as per the Schedule XIV of Companies Act 1956. The depreciation on fixed assets is provided on the straight line method considering the useful life and residual value of respective fixed asset.

The useful life of assets as adopted by the company as per Old Schedule XVI and New schedule II of the Companies act is listed as under.

Particulars Previous Useful Revised Useful Life Life

Leasehold Land 20 20

Building (Factory) 30 30

Building (Residential) 20 60

Plant and Machinery 19 8

Plant and Machinery (Twin Screw 19 20* Extruder)

Electrical Installations 20 10

Laboratory Equipment 20 10

Computers, Server & Networking 6 3 Device

Furniture 15 10

Office equipment 20 5

Vehicles - Four Wheeler 10 8

'Based on an independent technical evaluation carried out by external valuer, the management believes that the useful life of Plant and machinery estimated best represent the period over which the management expects to use these assets However the useful lives for these asset is different from that prescribed in schedule II of the Act.

1.6. Revenue recognition:

a) Revenue from sale of goods is recognised when significant risks and rewards of ownership have been passed to the buyer and when the effective control of the seller as the owner is lost. Revenues are recorded at invoice value, net of value added tax and excise.

b) Interest income is recognized on time proportion basis.

c) Dividend income is recognised when the right to receive payment is established.

d) Job work income is recognised on completion of job.

1.7 Foreign currency transactions

Exchange differences

Transactions inforeign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates.

a) Exchange differences arising on settlement of transactions and translation of monetary items other than those covered by (2) below are recognized as income or expense in the year in which they arise. Exchange differences considered as borrowing cost are capitalized to the extent these relate to the acquisition / construction of qualifying assets and the balance amount is recognized in the Profit and Loss Statement.

b) Exchange differences relating to long term foreign currency monetary assets / liabilities are accounted for with effect from April 1,2007 in the following manner:

-Differences relating to borrowings attributable to the acquisition of the depreciable Capital Asset are added to / deducted from the cost of such capital Assets

1.8. Employee Benefits

a) The Company's contribution in respect of provident fund is charged to Profit and Loss Account each year

b) With respect to gratuity liability, Company contributes to Life Insurance Corporation of India (LIC) under LIC's Group Gratuity policy. Gratuity liability as determined on actuarial basis by the independent valuer is charged to Profit and Loss Account.

1.9. Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset should be capitalised as part of the cost of that-asset. The amount of borrowing costs eligible for capitalisation should be determined in accordance with this Standard. Other borrowing costs should be recognised as an expense in the period in which they are incurred

To the extent that funds are borrowed specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation on that asset should be determined as the actual borrowing costs incurred on that Borrowing during the period less any income on the temporary investment of those borrowings.

1.10. Segment disclosures:

The company operates in a single business segment, i.e. of manufacturing of compounds, blends & alloys of Engineering Polymers; and also no geographical segments as company operates only in India. Accordingly, no separate disclosures required by AS-17 for primary business segment and geographical segment

1.11. Lease:- Finance Leases

Assets acquired under lease where the company has substantially all the risk and rewards of ownership are classified as finance lease. Such leases are capitalised at the inception of lease at lower of the fair value and present value of minimum lease payments. Each lease rental paid is allocated between the liability and the interest cost so as to obtain constant periodic rate of interest on the outstanding liability for each period.

Operating Leases

Assets acquired as leases where a significant portion of risks and rewards of ownership are retained by the lessor are classified as operating lease. Operating lease charges are recognised in the Profit and Loss account on a straight line basis over the lease term.

1.12. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with the Accounting Standard - 20- ' Earning per Share' prescribed by the Companies (Accounting Standard) Rules 2006.Basic Earning per Share is computed by dividing the net profit or loss for the year by the weighted average number of Equity Share outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss for the year by the weighted number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity share.

1.13. Taxes on Income

Provision for taxation comprises of Current Tax and Deferred Tax Current tax has provision has been made the basis of reliefs and deduction available under Income Tax Act 1961 Deferred tax resulting from "timing differences* between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent the assets can be realized in future. However, where there is unabsorbed depreciation or carry forward losses under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each Balance sheet date.

1.14. Impairment of Assets:-

The Company tests for impairments at the close of the accounting period if and only if there are indications that suggest a possible reduction in the recoverable value of an asset. If the recoverable value amount of an Asset, i.e. the net realisable value or the economic value in use of a cash generating unit, is lower than the carrying amount of the Asset the difference is provided for as impairment However, if subsequently the position reverses and the recoverable amount become higher than the then carrying value the provision to the extent of the then difference is reversed, but not higher than the amount provided for.

1.15. Provisions, Contingent Liabilities and Contingent Assets:-

Provision is recognized only when there is a present obligation as a result of past events and when reliable estimates of the amount of the obligation can be made. Contingent liability is disclosed for:-

a) Possible Obligations which will be confirmed only by future events not wholly within the control of the company or

b) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or reliable estimates of the amount of the obligation cannot be made. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.


Mar 31, 2012

1. ACCOUNTING CONVENTIONS

These Financial statements are prepared under historical cost conventions on accrual basis in accordance with the Generally Accepted Accounting principles in India and Accounting Standard (AS) as notified under (Accounting Standard) Rules, 2006 except accounting of Bonus which is accounted as cash basis.

2. FIXED ASSETS & DEPRECIATION / AMORTISATION

a Fixed Assets are stated at historical cost (net of Cenvat credit) less accumulated depreciation / amortization thereon and impairment losses if any. Depreciation is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956.

b Capital Assets under erection / install-tien (including advances) are reflected in Balance Sheet under "Capital Work in progress". - '

3. INVENTORIES

Cost of Inventories have been computed to include all cost of Purchases, Cost of Conversion and other costs incurred in bringing the inventories to their present location and condition.

I. Raw materials and components, stores and spares are valued at Cost The costs are ascertained using the First in First out (FIFO).

ii. Work-in-progress and finished goods are valued at the lower of Cost or Net Realizable Value.

iii. Scrap is valued at Net Realizable Value.

4. REVENUE RECOGNITION:

a) Sales of products and services are recognized when risk and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods. Sales are inclusive of Excise Duty but excluding sales tax / Value Added Tax. Revenue from job charges is recognized on dispatch of material and in accordance with terms of job work.

b) Interest incomes are recognised on time proportion basis.

c) Where material received for processing from customers under arrangement to dispatch the end product, its invoice value to be treated as sales and the equivalent amount to be treated as purchases

5. FOREIGN CURRENCY TRANSACTIONS:

All the foreign currency transactions are recorded at the rates prevailing on the date of transaction. Exchange differences other than related to fixed assets are recognised in the profit and loss account. Current assets and liabilities as on Balance sheet date are converted at the exchange rates prevailing on that date. Exchange difference relating to Fixed assets are adjusted to carrying cost of fixed assets..

6. BENEFITS TO EMPLOYEE

The Company's contribution in respect of provident fund is charged to Profit and Loss Account each year.

With respect to gratuity liability, Company contributes to Life Insurance Corporation of India (LIC) under Group Gratuity policy. Provision for the year in respect of Gratuity is made on the basis of actuarial valuation as at the end of the year. Gratuity liability so determined is charged to Profit and Loss Account..

Retirement benefits are expensed to revenue as incurred.

Contribution to Providend Fund is made in accordance with the Rules of the Fund.

Leave encashment is provided in the year in which it has accrued.

7. TAXES ON INCOME

a. Provision for taxation comprises of Current Tax and Deferred Tax Current tax has provision has been made the basis of reliefs and deduction available under Income Tax Act, 1961 .Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent the assets can be realized in future. However, where there is unabsorbed depreciation or carry forward losses under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each Balance sheet date.

b. Minimum Alternative Tax (MAT) paid iiyiccordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to company& the asset can be measured reliably.

8. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS -

Provision is recognized only when there is a present obligation as a result of past events and when reliable estimates of the amount of the obligation can be made. Contingent liability is disclosed for:-

(I) Possible Obligations which will be confirmed only by future events not wholly within the control of the company or

(II) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or reliable estimates of the amount of the obligation cannot be made. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

9. USE OF ESTIMATES

The presentation of Financial Statements in conformity with the generally accepted principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the period. Difference between the actual result and estimates are recognized in the period in which reason are known/ materialized.

The preparation of financial statements requires management of the Company to make estimates & assumptions that affect the reported balances of Assets & Liabilities and disclosure of contingent liabilities at the date of financial statements and reported amounts of revenues and expenses during the period.

10. SEGMENT DISCLOSURES

The company operates in a single business segment, i.e. of manufacturing of compounds, blends & alloys of Engineering Polymers. Further, the company currently operates only India and does not have operations outside India. Accordingly, no separate disclosures for primary business segment and geographical segment are required to be given.

11. IMPAIRMENT OF ASSETS

The company assesses at each Balance Sheet date, whether there is any indication that asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset

belongs, is less than its carrying amount, the carrying amount is adjusted to the amount of recoverable amount.

12. BORROWING COSTS

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

13. LEASES

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lesser are charged against profits as perthe terms sf the lease agreement over the lease period.

 
Subscribe now to get personal finance updates in your inbox!