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Accounting Policies of Greenply Industries Ltd. Company

Mar 31, 2015

1.01 Disclosure of Accounting Policies (AS - 1):

1.01.01 Nature of Operation

Company is engaged in the business of manufacturing plywood and allied products, medium density fibre boards and allied products through its factories at various locations and branches and dealers'' network spread all over the country. It has two wholly owned subsidiary companies in overseas countries. The Company imports raw materials for manufacturing and also finished goods for trading. Manufactured goods are sold both in domestic and overseas markets.

Greenply Industries (Myanmar) Pvt. Ltd., subsidiary of the Company is engaged in manufacturing of products which constitutes raw materials to the Company and providing the same to Company and others. Greenply Trading Pte. Ltd., subsidiary of the Company operates as an investment vehicle and has invested into a Joint Venture Company viz. Greenply Alkemal (Singapore) Pte. Ltd., based out of Singapore.

1.01.02 Accounting Concepts & Basis of Presentation

The financialStatements are prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as specified in the Company (Accounting Standards) Rules 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014 and the provisions of the Companies Act, 2013. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The Company''s management evaluates all recently issued or revised accounting standards on an on-going basis.

The Normal Operating Cycle for the Company has been assumed to be of twelve months for classification of its various assets and liabilities into "Current" and "Non-current".

Where changes are made in presentation, the comparative figures of the previous year are regrouped and re-arranged accordingly.

1.01.03 Use of Estimates:

The preparation of financialstatements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actualresults could differ from these estimates.

1.02 Valuation of Inventories (AS - 2):

1.02.01 Stock of Raw Materials, Stores and spare parts are valued at lower of cost or net realisable value; and of those in transit and at port related to these items are valued at lower of cost to date or net realisable value.

1.02.02 Goods-in-process is valued at lower of cost or net realisable value.

1.02.03 Stock of Finished goods is valued at lower of cost or net realisable value.

1.02.04 Stock-in-trade is valued at lower of cost or net realisable value.

1.02.05 Waste and scraps are accounted at estimated realisable value.

1.02.06 Cost of inventories is ascertained on the ''weighted average'' basis. Goods-in-process and finished goods are valued on absorption cost basis.

1.02.07 Growing Crops and ClonalPlants are valued at lower of cost or net realisable value.

1.03 Cash Flow Statement (AS - 3):

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated. Cash and cash equivalents in the balance sheet comprise cash at bank, cash/cheques in hand and short term investments (excluding pledged term deposits) with an original maturity of three months or less.

1.04 Contingencies and Events Occurring After Balance Sheet Date (AS - 4):

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

1.05 Net Profit Or Loss For The Period,

Prior Period Items And Changes In Accounting Policies (AS - 5):

Net Profit or loss for the period and prior period items are shown separately in the Statement of Profit & Loss.

1.06 Depreciation (AS - 6):

1.06.01 Tangible assets including continuous process plants are depreciated and/or amortised on the basis of their useful lives as notified in Schedule II to the Companies Act, 2013. Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period when the assets are ready for use. The provision for depreciation for multiple shifts has been made in respect of eligible assets on the basis of operation of respective units. Where the historical cost of a depreciable asset undergoes a change due to increase or decrease in long term liability on account of exchange fluctuations, the depreciation on the revised unamortised depreciable amount is provided prospectively over the residual useful life of the asset.

1.06.02 Leasehold lands are amortised over the period of lease.

1.07 Revenue Recognition (AS - 9):

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

1.07.01 Sale of Goods: Revenue from sales of goods is recognised on transfer of significant risks and rewards of ownership to the customers. Gross sales shown in the Statement of Profit & Loss are inclusive of Excise Duty and the value of self-consumption and inter-transfers but excludes Trade discounts, CST and VAT. Net sales are shown after deducting Excise duty which is disclosed at appropriate places.

1.07.02 Services: Revenue from Services are recognized as and when the services are rendered. The Company collects service tax on behalf of the government and therefore, it is not an economic benefit flowing to the Company and hence excluded from Revenue.

1.07.03 Interest: Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

1.07.04 Dividends: Dividend from investment is recognized when the Company in which they are held declares the dividend and when the right to receive the same is established.

1.07.05 Insurance Claims: Insurance Claims are accounted for on acceptance and when there is a reasonable certainty of receiving the same, on grounds of prudence.

1.08 Accounting for Tangible and Intangible Assets (AS - 10):

1.08.01 Tangible assets are stated at original cost (net of tax/duty credit availed) less accumulated depreciation, amortisation and impairment losses except freehold land which is carried at cost. Cost includes cost of acquisition, construction and installation, taxes, duties, freight, other incidental expenses related to the acquisition, trialrun expenses (net of revenue) and pre-operative expenses including attributable borrowing costs incurred during pre-operational period.

1.08.02 Tangible assets which are not ready for their intended use on reporting date are carried as capital work-in-progress at cost, comprising direct cost and related incidental expenses.

1.08.03 The Company has exercised the option available to it under Rule 46A of the Companies (Accounting Standards) (Second Amendment) Rules, 2011 in respect of accounting for fluctuations in foreign exchange relating to "Long Term Foreign Currency Monetary Items".

1.08.04 Intangible assets are carried at cost, net of accumulated amortization and impairment loss, if any.

1.09 Accounting for the Effects in Foreign Exchange Rates (AS - 11):

1.09.01 Initial Recognition: Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions.

1.09.02 Conversion: Foreign currency monetary items are reported using the closing rate. Non- monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

1.09.03 Exchange Differences: Exchange differences arising on the settlement of monetary items or on reporting company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or expenses in the year in which they arise.

1.09.04 Forward exchange contracts

entered into to hedge foreign currency risk of an existing asset/liability: The premium or discount arising at the inception of forward exchange contract is recognized as an expense/ income on the date of transaction. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or expense for the period. However, in case of long term liabilities, where they relate to acquisition of fixed assets, the income or expense on account of exchange difference is adjusted to the carrying cost of such assets.

1.10 accounting for investments (as - 13):

Investments that are readily realisable and intended to be held for not more than a year are classified as Current investments. All other investments are classified as Non-Current/

Long-term Investments. Current investments are carried at lower of cost and market value on individualinvestment basis. Non-Current/Long term Investments are considered at cost, unless there is an "other than temporary" decline in value, in which case adequate provision is made for the diminution in the value of Investments.

1.11 Employee Benefits (AS - 15):

1.11.01 Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

1.11.02 Post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarialgains and losses in respect of past employment and other long term benefits are charged to the Statement of Profit and Loss.

1.12 Borrowing Costs (AS - 16):

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

1.13 Segment Reporting (AS - 17):

1.13.01 Identification of Segments:

Primary Segment Business Segment:

The Company''s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The identified segments are Manufacturing and Sale of (a) Plywood & Allied products; and (b) Medium Density Fibre Boards & Allied products.

Secondary Segment Geographical Segment:

The analysis of geographical segment is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows:

Sales within India include sales to customers located within India.

Sales outside India include sales to customers located outside India.

1.13.02 Allocation of Common costs:

Common allocable costs are allocated to each segment according to the ratio of their respective turnover to the total turnover.

1.13.03 Unallocated items:

The Unallocated Segment includes general corporate income and expense items, which are not allocated to any business segment.

1.14 Related Party Disclosures (AS - 18):

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

1.15 Leases (AS - 19):

In accordance with Accounting Standard 19 "Accounting for leases", lease arrangements, where the risks and rewards incidental to ownership of an asset substantially vests with the lessor, are recognized as operating leases. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss.

1.16 Earnings Per Share (AS - 20):

Basic earnings (loss) per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.17 Accounting for Taxes On Income (AS - 22):

1.17.01 Tax expenses comprise of current tax and deferred tax including applicable surcharge and cess.

1.17.02 Current Income tax is computed using the tax effect accounting method, where taxes are accrued in the same period in which the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

1.17.03 The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred Tax Assets and Deferred Tax Liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the Deferred Tax Assets and Deferred Tax Liabilities relate to taxes on income levied by same governing taxation laws. Deferred Tax Assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

1.17.04 MAT (Minimum Alternate Tax) credit is recognised as an asset only when and to the extent there 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 guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and 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.

1.18 Discontinuing Operations (AS - 24):

Pursuant to the approvalof the High Court, effect has been given in the Financial Statements to the "Composite Scheme of Arrangement" approved by the Board of Directors. The assets & liabilities of the Demerged Undertaking have been transferred to and vested in Greenlam Industries Limited and are disclosed by way of Notes on Accounts.

1.19 Intangible Assets (AS - 26):

1.19.01 Internally generated intangible asset under development stage is recognized when it is demonstrated that it is technically feasible to use the same and the cost incurred for developing the same is ascertained. Technical Know-how so developed internally is amortised on a straight- line basis over its estimated useful life.

1.19.02 Intangible assets acquired by payment e.g., Goodwill, Trademarks, Computer Software and Technical Know-how are disclosed at cost less amortization on a straight-line basis over its estimated useful life.

1.20 Impairment of Tangible and Intangible Assets (AS - 28)

At each balance sheet date, the Company reviews the carrying amount of tangible and intangible assets to determine whether there is any indication of impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. The recoverable amount is higher of the net selling price and the value in use, determined by discounting the estimated future cash flows expected from the continuing use of the asset to their present value.

1.21 Provisions, Contingent Liabilities and Contingent Assets (AS - 29):

1.21.01 Provisions are made when (a) the Company has a present obligation as a result of past events; (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate is made of the amount of the obligation.

1.21.02 Contingent liabilities are not provided for but are disclosed by way of Notes on Accounts.

1.21.03 Contingent assets are neither accounted for nor disclosed by way of Notes on Accounts.

1.22 Excise Duty and Custom Duty:

Excise Duty on finished goods stock lying at the factories is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods lying in the factories as on the Balance Sheet date. Similarly, Custom Duty on imported material in transit/lying in bonded warehouse is accounted for at the time of import/bonding of materials.

1.23 Consumption of Raw Materials, Stores & Spare Parts Etc.:

The costs of Raw Materials, Stores and spare parts etc., consumed consist of purchase price including duties and taxes (other than those subsequently recoverable by the enterprise from the taxing authorities), freight inwards and other expenditure directly attributable to the procurement.

1.24 Service Tax & Cess:

Various expenses are accounted for after deducting the input tax credit available in respect of Service Tax, Education Cess and Secondary & Higher Education Cess.

1.25 Expenses for Corporate Social Responsibility:

In case of CSR activities undertaken by the Company, if any expenditure of revenue nature is incurred on any of the activities mentioned in Schedule VII to the Companies Act, 2013, the same is charged as an expense to its Statement of Profit and Loss. In case, the expenditure incurred by the Company is of such a nature which gives rise to an asset, such an asset is recognised where the Company retains the control of the asset and any future economic benefit accrues to it. A liability incurred by entering into a contractual obligation is recognised to the extent to which CSR activity is completed during the year.

1.26 Miscellaneous Expenditure Written Off:

The share issue expenses and expenses related to Scheme of Arrangement are written off in five equal annual installments in accordance with the provisions of Section 35DD of the Income Tax Act, 1961.


Mar 31, 2014

1.01 DISCLOSURE OF ACCOUNTING POLICIES (AS-1):

1.01.01 Nature of Operation

Company is an interior infrastructure company engaged in the business of manufacturing plywood and allied products, laminates, particle boards, medium density fibre boards, etc. through its factories at various locations and branches and dealers'' network spread all over the country. It has four wholly owned subsidiary companies operating in overseas countries and two in India. It imports raw materials for manufacturing and also finished goods for trading. Manufactured goods are sold both in domestic and overseas markets. The Overseas subsidiaries of the Company are engaged in similar lines of business.

1.01.02 Accounting Concepts & Basis of Presentation

The financial Statements are prepared in accordance with the Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the Companies Act, 1956, read with the General Circular number 15/2013 dated 13th September, 2013 in respect of Section 133 of the Companies Act, 2013 and General Circular number 08/2014 dated 04th April 2014 of the Ministry of Corporate Affairs and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The Company''s management evaluates all recently issued or revised accounting standards on an on-going basis. Where changes are made in presentation, the comparative figures of the previous year are regrouped and re-arranged accordingly.

1.01.03 Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

1.02 VALUATION OF INVENTORIES (AS-2):

1.02.01 Stock of Raw Materials, Stores and spare parts are valued at cost; and of those in transit, at port and at Bonded Warehouse related to these items are valued at cost to date.

1.02.02 Goods-in-process is valued at cost.

1.02.03 Stock of Finished goods are valued at cost or net realisable value whichever is lower.

1.02.04 Waste and scraps are accounted at estimated realisable value.

1.02.05 Cost of inventories is generally ascertained on the ''weighted average'' basis. Goods-in-process and finished goods are valued on absorption cost basis.

1.02.06 The self-generated Certified Emission Reductions (CERs) are recognized as asset on certification by UNFCCC and are valued at cost or net realizable value, whichever is lower.

1.03 CASH FLOW STATEMENT (AS - 3):

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated. Cash and cash equivalents in the balance sheet comprise cash at bank (excluding pledged term deposits), cash/cheques in hand and short term investments with an original maturity of three months or less.

1.04 CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE (AS -4):

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

1.05 NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES (AS -5):

Net Profit or loss for the period and prior period items are shown separately in the Statement of Profit & Loss.

1.06 DEPRECIATION (AS - 6):

1.06.01 Depreciation on Fixed Assets is provided for on straight-line method in accordance with and generally at the rates specified in Schedule XIV to the Companies Act, 1956.

1.06.02 Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period of use of such assets. The provision for depreciation for multiple shifts has been made in respect of eligible assets on the basis of operation of respective units. In respect of continuous process plant, depreciation has been provided as per rates prescribed in Schedule XIV of the Companies Act, 1956.

1.06.03 Leasehold lands are amortised over the period of lease.

1.06.04 Intangible assets are amortised on straight-line method as follows : Computer Software 5 years

Technical Know-how - 2 years

Trademarks 10 years

Goodwill 5 years

1.07 REVENUE RECOGNITION (AS -9):

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

1.07.01 Sale of Goods: Sales are accounted for on despatch of products to customers. Gross sales shown in the Statement of Profit & Loss are inclusive of Excise Duty and the value of self-consumption, inter-transfers and export incentives but excludes discounts, CST and VAT. Net sales are shown after deducting Excise duty which is disclosed at appropriate places.

1.07.02 Interest: Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable.

1.07.03 Dividends: Dividend from investment is recognized when the Company in which they are held declares the dividend and when the right to receive the same is established.

1.07.04 Export incentives: Benefit on account of entitlement to import goods free of duty under the Advance License Scheme, "Duty Entitlement Pass Book under Duty Exemption Scheme (DEPB)", Duty Free Replenishment Certificate (DFRC), Duty Free Import Authorisation (DFIA) Scheme, Status Holder Incentive Scrip (SHIS) Scheme and Focus Market Scheme (FMS), to the extent of their face value, are accounted for as and when exports are made i.e., in the year of export. Profit or loss arising on utilisation of the same and/or sale thereof are accounted for in the year in which either the imports are made against the said Advance License, DEPB, DFRC, DFIA, SHIS or FMS and/or the same are sold.

1.08 ACCOUNTING FOR FIXED ASSETS (AS - 10):

1.08.01 Fixed Assets are stated at cost less accumulated depreciation. Cost includes borrowing costs and all incidental expenditure net of CENVAT, Service Tax Input Credit and VAT Input Credit, wherever applicable.

1.08.02 Revenue expenses incurred in connection with project implementation insofar as such expenses relate to the period prior to the commencement of commercial production are treated as part of project cost and capitalized.

1.09ACCOUNTING FOR THE EFFECTS IN FOREIGN EXCHANGE RATES (AS- 11):

1.09.01 Initial Recognition: Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions.

1.09.02 Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

1.09.03 Exchange Differences: Exchange differences arising on the settlement of monetary items or on reporting company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or expenses in the year in which they arise.

1.09.04 Integral Foreign Operation: In respect of a branch, which is integral foreign operation, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transaction. Branch monetary assets and liabilities are restated at the year-end rates.

1.09.05 Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/liability:

The premium or discount arising at the inception of forward exchange contract is recognized as an expense/income on the date of transaction. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or expense for the period. However, in case of long term liabilities, where they relate to acquisition of fixed assets, the income or expense on account of exchange difference is adjusted to the carrying cost of such assets.

1.10 ACCOUNTING FOR INVESTMENTS (AS - 13):

Investments, being long term in nature, are valued at cost of acquisition. Adjustment for increase/decrease in the value of investments, if any, will be accounted for on realisation of the investments. A provision for diminution is made to recognise a decline, other than temporary, in the value of long term investments.

1.11 EMPLOYEE BENEFITS (AS - 15):

1.11.01 Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

1.11.02 Post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of past employment and other long term benefits are charged to the Statement of Profit and Loss.

1.12 BORROWING COSTS (AS - 16):

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

1.13 SEGMENT REPORTING (AS - 17):

1.13.01 Identification of Segments: Primary Segment

Business Segment:

The Company''s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The identified segments are Manufacturing and Sale of (a) Plywood & Allied products; (b) Laminates & Allied products, and (c) Medium Density Fibre Boards.

Secondary Segment

Geographical Segment:

The analysis of geographical segment is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows:

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

1.13.02 Allocation of Common costs:

Common allocable costs are allocated to each segment according to the ratio of their respective turnover to the total turnover.

1.13.03 Unallocated items:

The Unallocated Segment includes general corporate income and expense items, which are not allocated to any business segment.

1.14 RELATED PARTY DISCLOSURES (AS - 18):

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

1.15 LEASES (AS-19):

In accordance with Accounting Standard 19 "Accounting for leases", lease arrangements, where the risks and rewards incidental to ownership of an asset substantially vests with the lessor, are recognized as operating leases. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss.

1.16 EARNINGS PER SHARE (AS - 20):

Basic earnings (loss) per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.17 ACCOUNTING FOR TAXES ON INCOME (AS - 22):

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred Tax Assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full fiscal year.

1.18 DISCONTINUING OPERATIONS (AS - 24):

During the pendency of the approval of the High Court and other regulatory compliances, no effect is given in the Financial Statements to the "Composite Scheme of Arrangement" approved by the Board of Directors except that profit/ (loss) or tax attributable thereon in respect of the discontinuing operations are disclosed in the Statement of Profit and Loss. The assets, liabilities, revenue and cash flow of the proposed Demerged Undertaking are disclosed by way of Notes on Accounts.

1.19 INTANGIBLE ASSETS (AS - 26):

1.19.01 Internally generated intangible asset under development stage is recognized when it is demonstrated that it is technically feasible to use the same and the cost incurred for developing the same is ascertained. Technical Know-how so developed internally is amortised on a straight- line basis over its estimated useful life.

1.19.02 Intangible assets acquired by payment e.g., Trade marks, Goodwill and Technical Know-how are disclosed at cost less amortization on a straight-line basis over its estimated useful life.

1.20 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS - 29):

1.20.01 Provisions are made for present obligations arising as a result of past events

1.20.02 Contingent liabilities are not provided for but are disclosed by way of Notes on Accounts.

1.20.03 Contingent assets are neither accounted for nor disclosed by way of Notes on Accounts.

1.21 EXCISE DUTY AND CUSTOM DUTY:

Excise Duty on finished goods stock lying at the factories is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods lying in the factories as on the Balance Sheet date. Similarly, Custom Duty on imported material in transit/lying in bonded warehouse is accounted for at the time of import/bonding of materials.

1.22 CONSUMPTION OF RAW MATERIALS, STORES & SPARE PARTS ETC. :

Raw Materials, Stores and spare parts etc., consumed are exclusive of (a) Excise Duty on inputs under Cenvat Scheme, (b) Service tax input credits, (c) Insurance Claims received (d) Entry Tax under Rajasthan Local Sales Tax Act and (e) VAT Input Credit under State laws, wherever applicable.

1.23 SERVICE TAX & CESS:

Various expenses are accounted for after deducting the input tax credit available in respect of Service Tax, Education Cess and Secondary & Higher Education Cess.

1.24 TAXATION:

1.24.01 Tax expenses comprise of income tax and deferred tax including applicable surcharge and cess.

1.24.02 Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period in which the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

1.24.03 MAT (Minimum Alternate Tax) credit is recognised as an asset only when and to the extent there 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 guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and 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.

1.24.04 Provision for deferred tax or credit for release thereof is accounted for as ascertained in accordance with principles stated in para 1.17 hereinabove.

1.24.05 Tax on distributed profits payable in accordance with the provisions of section 1150 of the Income Tax Act, 1961 is in accordance with the Guidance Note on "Accounting for Corporate Dividend Tax" regarded as a tax on distribution of profits and is not considered in determination of profits for the period.


Mar 31, 2013

1. 01.01 Nature of Operation

Company is an interior infrastructure company engaged in the business of manufacturing plywood and allied products, laminates, particle boards, medium density fibre boards, etc. through its factories at various locations and branches and dealers'' network spread all over the country. It has three wholly owned subsidiary companies operating in Singapore, America and Europe. It imports raw materials for manufacturing and also finished goods for trading. Manufactured goods are sold both in domestic and overseas markets. The Overseas subsidiaries of the Company are engaged in the business of trading in similar products.

1.01.02 Accounting Concepts & Basis of Presentation

The financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis, except for certain fixed assets which are revalued. GAAP comprises mandatory accounting standards as specified in the Company (Accounting Standards) Rules 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The management evaluates all recently issued or revised accounting standards on an on-going basis. Where changes are made in presentation, the comparative figures of the previous year are regrouped and re- arranged accordingly.

1.01.03 Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

1.02 VALUATION OF INVENTORIES (AS-2):

1.02.01 Stock of Raw Materials, Stores and spare parts are valued at cost; and of those in transit, at port and at Bonded Warehouse related to these items are valued at cost to date.

1.02.02 Goods-in-process is valued at cost.

1.02.03 Stock of Finished goods and semi-finished goods are valued at cost or net realisable value whichever is lower.

1.02.04 Waste and scraps are accounted at estimated realisable value.

1.02.05 Cost of inventories is generally ascertained on the ''weighted average'' basis. Goods-in-process, finished and semi-finished goods are valued on absorption cost basis.

1.02.06 The self-generated Certified Emission Reductions (CERs) are recognized as asset on certification by UNFCCC and are valued at cost or net realizable value, whichever is lower.

1.03 CASH FLOW STATEMENT (AS - 3):

Cash flows are reported using indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from regular revenue generating, financing and investing activities of the Company is segregated. Cash and cash equivalents in the balance sheet comprise cash at bank (excluding pledged term deposits), cash/ cheques in hand and short term investments with an original maturity of three months or less.

1.04 CONTINGENCIES AND EVENTS OCCURRING AFTER BALANCE SHEET DATE (AS -4):

Disclosure of contingencies as required by the accounting standard is furnished in the Notes on accounts.

1.05 NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES (AS -5):

Net Profit or loss for the period and prior period items are shown separately in the Profit & Loss Account.

1.06 DEPRECIATION (AS - 6):

1.06.01 Depreciation on Fixed Assets is provided for on straight-line method in accordance with and generally at the rates specified in Schedule XIV to the Companies Act, 1956. Leasehold lands at Kriparampur, Rudrapur and Rajkot units are amortised over the period of lease. Other leasehold lands are not amortised.

1.06.02 Depreciation in respect of additions to assets has been charged on pro rata basis with reference to the period of use of such assets. The provision for depreciation for multiple shifts has been made in respect of eligible assets on the basis of operation of respective units. In respect of continuous process plant, depreciation has been provided as per rates prescribed in Schedule XIV of the Companies Act, 1956.

1.07 REVENUE RECOGNITION (AS -9):

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

1.07.01 Sale of Goods: Sales are accounted for on despatch of products to customers. Gross sales shown in the Statement of Profit & Loss are inclusive of Excise Duty and the value of self-consumption, inter-transfers and export incentives but excludes discounts, CST and VAT. Net sales are shown after deducting Excise duty which is disclosed at appropriate places.

1.07.02 Interest: Interest income is recognized on a time proportion basis taking into account the amount outstanding and rate applicable

1.07.03 Dividends: Dividend from investment is recognized when the Company in which they are held declares the dividend and when the right to receive the same is established.

1.07.04 Export incentives: Benefit on account of entitlement to import goods free of duty under the "Duty Entitlement Pass Book under Duty Exemption Scheme (DEPB)", Duty Free Replenishment Certificate (DFRC), Duty Free Import Authorisation (DFIA) Scheme to the extent of their face value are accounted for as and when exports are made i.e., in the year of export. Profit or loss arising on utilisation of the same and/or sale thereof are accounted for in the year in which either the imports are made against the said DEPB, DFRC or DFIA and/or the same are sold.

1.07.05 In case of manufacturing units exempt from payment of VAT/Sales tax under State laws, VAT input credit receivable is carried forward as an asset to the extent it is eligible for set-off in subsequent years.

1.08 ACCOUNTING FOR FIXED ASSETS (AS - 10):

1.08.01 Fixed assets, which are revalued, are stated at revalued amounts as a result of their revaluation.

1.08.02 Other Fixed Assets are stated at cost less accumulated depreciation. Cost includes borrowing costs and all incidental expenditure net of CENVAT, Service Tax Input Credit and VAT Input Credit, wherever applicable.

1.08.03 Revenue expenses incurred in connection with project implementation insofar as such expenses relate to the period prior to the commencement of commercial production are treated as part of project cost and capitalized.

1.09 ACCOUNTING FOR THE EFFECTS IN FOREIGN EXCHANGE RATES (AS - 11):

1.09.01 Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions.

1.09.02 In conformity with revised Accounting Standard (AS - 11), issued by the Institute of Chartered Accountants of India (ICAI), monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the difference between the forward rate and exchange rate on the date of transaction, such difference having been amortised over the life of the contract.

1.09.03 Non-monerary items carried at historical cost are reported using the rate at the date of transaction.

1.09.04 In respect of branches, which are integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transaction. Branch monetary assets and liabilities are restated at the year end rates.

1.09.05 Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss account. However, in case of long term liabilities, where they relate to acquisition of fixed assets, the income or expense on account of exchange difference is adjusted to the carrying cost of such assets.

1.10 ACCOUNTING FOR INVESTMENTS (AS - 13):

Investments, being long term in nature, are valued at cost of acquisition. Adjustment for increase/decrease in the value of investments, if any, will be accounted for on realisation of the investments. A provision for diminution is made to recognise a decline, other than temporary, in the value of long term investments.

1.11 EMPLOYEE BENEFITS (AS - 15):

1.11.01 Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

1.11.02 Post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged off is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of past employment and other long term benefits are charged to the profit and loss account.

1.12 BORROWING COSTS (AS - 16):

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

1.13 SEGMENT REPORTING (AS - 17):

1.13.01 Identification of Segments:

Piimaiy Segment Business Segment:

The Company''s operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The identified segments are Manufacturing & Sale of (a) Plywood & Allied products; (b) Laminates & Allied products, and (c) Medium Density Fibre Boards.

Secondary Segment Geographical Segment:

The analysis of geographical segment is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows:

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

1.13.02 Allocation of Common costs:

Common allocable costs are allocated to each segment according to the ratio of their respective turnover to the total turnover.

1.13.03 Unallocated items:

The Unallocated Segment includes general corporate income and expense items, which are not allocated to any business segment.

1.14 RELATED PARTY DISCLOSURES (AS - 18):

Disclosure of related parties as required by the accounting standard is furnished in the Notes on accounts.

1.15 LEASES (AS - 19):

In accordance with Accounting Standard 19 "Accounting for leases", lease arrangements, where the risks and rewards incidental to ownership of an asset substantially vests with the lessor, are recognized as operating leases. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss.

1.16 EARNINGS PER SHARE (AS - 20):

Basic earnings (loss) per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.17 CONSOLIDATED FINANCIAL STATEMENTS (AS - 21):

1.17.01 The consolidated financial statements of the parent and its subsidiaries are combined on a line by line basis by adding together like items of assets, liabilities, income and expenses. Intragroup balances and intragroup transactions and resulting unrealised profits (losses) are eliminated in full. Consolidated financial statements are prepared using uniform accounting policies for the like transactions and other events in similar circumstances to the extent practicable and in case of difference, the same is disclosed.

1.17.02 Investments in subsidiaries are accounted for in accordance with Accounting Standard (AS) 13 - Accounting for Investments.

1.17.03 As all the subsidiary companies of the group are wholly owned, minority interests in the income of the group are not presented

1.18 ACCOUNTING FOR TAXES ON INCOME (AS - 22):

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially enacted regulations. Deferred Tax Assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. The income tax provision for the interim period is made based on the best estimate of the annual average tax rate expected to be applicable for the full fiscal year.

1.19 INTERIM FINANCIAL REPORTING (AS - 25):

The quarterly financial results are published in accordance with the requirements of listing agreements with stock exchanges.

1.20 INTANGIBLE ASSETS (AS - 26):

1.20.01 Internally generated intangible asset under development stage is recognized when it is demonstrated that it is technically feasible to use the same and the cost incurred for developing the same is ascertained. Technical Know-how so developed internally is amortised on a straight- line basis over its estimated useful life.

1.20.02 Intangible assets acquired by payment e.g., Trade marks, Goodwill and Technical Know-how are disclosed at cost less amortization on a straight-line basis over its estimated useful life.

1.21 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS (AS - 29):

1.21.01 Provisions are made for present obligations arising as a result of past events.

1.21.02 Contingent liabilities are not provided for but are disclosed by way of Notes on Accounts.

1.21.03 Contingent assets are neither accounted for nor disclosed by way of Notes on Accounts.

1.22 CENTRAL EXCISE DUTY:

Excise Duty liability accruing on manufacture is accounted for as and when the liability for payment arises under the Central Excise Act, 1944. Duty on finished goods lying at stock at factory at the close of the year has not been provided for in the accounts and hence not included in the valuation of inventory of such goods. However the said liability if accounted would have no impact on the financial results for the accounting period.

1.23 CONSUMPTION OF RAW MATERIALS, STORES & SPARE PARTS ETC. :

Raw Materials, Stores and spare parts etc., consumed are exclusive of (a) Excise Duty on inputs under Cenvat Scheme, (b) Service tax input credits, (c) Insurance Claims received (d) Entry Tax under Rajasthan Local Sales Tax Act and (f) VAT Input Credit under State laws, wherever applicable.

1.24 SERVICE TAX & CESS:

Various expenses are accounted for after deducting the input tax credit available in respect of Service Tax,

Education Cess and Secondary & Higher Education Cess. 1.25 TAXATION:

1.25.01 Tax expenses comprise of income tax, corporate dividend tax, deferred tax including applicable surcharge and cess.

1.25.02 Income tax are computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

1.25.03 MAT (Minimum Alternate Tax) credit is recognised as an asset only when and to the extent there 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 guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and 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.

1.25.04 Provision for deferred tax or credit for release thereof is accounted for as ascertained in accordance with principles stated in para 1.18 hereinabove.

1.25.05 Tax on distributed profits payable in accordance with the provisions of section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on "Accounting for Corporate Dividend Tax" regarded as a tax on distribution of profits and is not considered in determination of profits for the period.

 
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