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Accounting Policies of Genus Paper & Boards Ltd. Company

Mar 31, 2015

1. Basis of Preparation of Financial Statements

(i) The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (accounts) Rules, 2014.

(ii) The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2. Use of Estimates

The preparation of financial statement 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 results and estimates are recognized in the period in which the results are known / materialized.

3. Revenue Recognition

(i) Revenue from sale of products is recognized when the risk and reward of ownership of the product is passed on to the customers, which is generally on dispatch of goods. Sales are stated exclusive of Sale/Trade tax

(ii) Dividend income is recognized when the unconditional right to receive the income is established.

(iii) Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists.

4. Fixed Assets

Fixed Assets are stated at cost net of CENVAT, less accumulated depreciation. Cost of acquisition is inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. To adjust the original cost of Fixed Assets acquired through foreign currency loans at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

5. Depreciation

In accordance with the provisions of Schedule II of the Companies Act, 2013, the Company has estimated the useful lives of fixed assets. Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use. The Management estimates the useful lives for the fixed assets. The consequential impact (after considering the provision specified in Schedule II) on the depreciation charged and on the results for the year is not material.

6. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period as reversed if there has been a change in the estimate of recoverable amount.

7. Foreign Currency Transactions

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction or at the rates covered by the forward contracts. The exchange differences on conversion are adjusted to:

a. Cost of Fixed Assets, if the foreign currency liability relates to the fixed assets.

b. Cost of Raw Material & Chemicals, if the foreign currency liability relates to these items.

c. Bank charges, if the foreign currency liability relates to conversion of bank's credit facility into foreign currency.

8. Investments

Long term Investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary in opinion of the management.

9. Inventories

Cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.

Raw materials, Stores & Spares are valued at cost, determined on the basis of the weighted average method.

Work-in-progress is valued at the lower of cost and net realizable value.

Finished goods are valued at the lower of cost and net realizable value. Excise duty is included in the value of finished goods inventory.

10. Preliminary Expenses

Preliminary expenses (including the expenses for enhancement of Authorised capital) have been amortized over a period of five years.

11. Retirement benefits

Company's contributions to Provident Fund are charged to Profit & Loss Account on accrual basis. Liability for payment of Gratuity and Leave Encashment is charged to Profit & Loss Account on the basis of Actuarial valuation as at year end.

12. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

13. Provision for Current Tax & Deferred Tax

Provision for current tax is made, which is likely to arise on the results for the year at the current rate of tax in accordance with the provisions of the Income Tax Act,1961, Deferred tax is computed in accordance with Accounting Standard 22- “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India,

14. Accounting of CENVAT Credit

Cenvat credit available on raw material, chemicals, stores & spares is accounted for by booking respective material purchases, net of excise duty, similarly Cenvat Credit entitlement on Capital goods, net of excise. Both these Cenvat Credits are accumulated and shown as receivable under “Loans and Advances” for adjustments in due course against duty payable on dispatch of finished goods.

15. Provision, Contingent Liabilities and Contingent Assets

Provisions 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 resources Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

16. Corporate Social Responsibility (CSR) Expenditure

The Company has opted to charge its CSR expenditure incurred during the year to the statement of profit and loss.

17. In view of giving full attention to main business activities of the Company, the Board had on 23.6.2014 approved the transaction of disposal of entire shareholding in the Subsidiary of the Company viz. Genus Prime Infra Limited (formerly Gulshan Chemfill Limited) in terms of the Share Purchase Agreement dated 01.7.2014 and subject to the provisions of SEBI Takeover Regulations 2011. Pursuant to the approval of members of the company in the 3rd annual general meeting held on 30.9.2014 and SEBI' letter no. CFD/DCR/AT/sKd/PA/4585/2015 dated February 11, 2015, Genus Prime Infra Limited and it's three subsidiaries i.e. Sansar Infrastructure Pvt. Ltd., Sunima Trading Pvt. Ltd. and Star Vanijya Pvt. Ltd. (wholly owned subsidiaries of Genus Prime Infra Limited) has ceased to be subsidiaries of the Company w.e.f. 21st April, 2015.




Mar 31, 2014

1. Basis of preparation of financiai statements

The financial statements have been prepared on accrual basis following the historical cost convention in accordance 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 statement 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 results and estimates are recognized in the period in which the results are known / materialized.

3. Revenue Recognition

(i) Revenue from sale of products is recognized when the risk and reward of ownership of the product is passed on to the customers, which is generally on dispatch of goods. Sales are stated exclusive of Sale/Trade tax

(ii) Dividend income is recognized when the unconditional right to receive the income is established.

(iii) Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists.

4. Fixed Assets

Fixed Assets are stated at cost net of CENVAT, less accumulated depreciation. Cost of acquisition is inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. To adjust the original cost of Fixed Assets acquired through foreign currency loans at the end of each financial year by any change in liability arising out of expressing the outstanding foreign loan at the rate of exchange prevailing at the date of Balance Sheet.

5. Depreciation

Depreciation on the assets has been provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act, 1956 as amended. Depreciation on revalued assets has been charged from revaluation reserve.

6. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period as reversed if there has been a change in the estimate of recoverable amount.

7. Foreign Currency Transactions ''

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction or at the rates covered by the forward contracts. The exchange differences on conversion are adjusted to:

a. Cost of Fixed Assets, if the foreign currency liability relates to the fixed assets.

a. Cost of Raw Material & Chemicals, if the foreign currency liability relates to these items.

b. Bank charges, if the foreign currency liability relates to conversion of bank''s credit facility into foreign currency.

8. Investments

Long term Investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary in opinion of the management.

9. Inventories

Cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition.

Raw materials. Stores & Spares are valued at cost, determined on the basis of the weighted average method.

Work-in-progress is valued at the lower of cost and net realizable value.

Finished goods are valued at the lower of cost and net realizable value. Excise duty is included in the value of finished goods inventory.

10. Preliminary Expenses

Preliminary expenses (including the expenses for enhancement of Authorised capital) have been amortized over a period of five years.

11. Retirement benefits

Company''s contributions to Provident Fund are charged to Profit & Loss Account on accrual basis. Liability for payment of Gratuity and Leave Encashment is charged to Profit & Loss Account on the basis of Actuarial valuation as at year end.

12. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue. ,

13. Provision for Current Tax & Deferred Tax

Provision for current tax is made, which is likely to arise on the results for the year at the current rate of tax in accordance with the provisions of the Income Tax Act,1961, Deferred tax is computed in accordance with Accounting Standard 22- "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India,

14. Accounting of CENVAT Credit

Cenvat credit available on raw material, chemicals, stores & spares is accounted for by booking respective material purchases, net of excise duty, similarly Cenvat Credit entitlement on Capital goods, net of excise. Both these Cenvat Credits are accumulated and shown as receivable under "Loans and Advances" for adjustments in due course against duty payable on dispatch of finished goods.

15. Provision, Contingent Liabilities and Contingent Assets

Provisions 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 resources Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

 
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