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Accounting Policies of Kingfa Science & Technology (India) Ltd. Company

Mar 31, 2013

(i) Accounting Convention:

The financial statements are prepared under historical cost convention on Accrual basis of accounting to comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules'' 2006 and with the relevant provisions of the Companies Act'' 1956. All the assets and liabilities have been classified as current and non current as per company''s normal operating cycle and other criteria set out in schedule VI to the companies act''1956.

(ii) Use of Estimates:

a) In the preparation of financial statements'' certain estimates and assumptions are made by the management to conform with the generally accepted accounting principles. The actual results could differ from these estimates.

b) In case of Trade Receivables'' Provision for Bad & Doubtful Debts has been made for receivables outstanding more than one year after considering the present status and probability of collection.

c) In case of Inventories'' Provision has been made for non moving inventories more than one year.

(iii) Revenue Recognition :

Revenue is recognised as under:

a) Sales of products: On despatch of the product to the customers which generally coincides with transfer of ownership. Sales are inclusive of excise duty and net of discounts.

b) Sale of services represents commission accrued on orders booked with principals and executed.

c) Interest: On a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Dividends: When the Company''s right to receive payment is established.

(iv) Fixed Assets :

a) Fixed assets are capitalised at the acquisition cost (viz.) purchase price'' import duties'' levies and expenses and costs directly attributable for bringing the assets to their working condition for intended use.

b) Capital work-in-progress represents expenditure incurred for new projects/capex under implementation. Resultant expenditure (including borrowing costs'' if any) incurred for these projects up to the date of commencement of commercial production have been considered as part of the project cost.

(v) Depreciation and amortisation expenses:

Depreciation is charged under straight line method on buildings'' plant and machinery'' electrical installations and intangible assets and under W.D.V. method on other assets at the rates and in the manner prescribed under Schedule XIV to the Companies Act'' 1956. Premium on leasehold land is amortised over the period of lease.

(vi) Borrowing Costs :

The borrowing costs incurred on loans taken for acquisition of qualifying assets are capitalised up to the date of commencement of commercial production/till the asset is ready for its intended use.

(vii) Investments :

Non current Investments are stated at cost and current investments are stated at Net Asset Value.

(viii)Inventories :

1. Inventories as taken and certified by the Management are valued at "lower of cost and estimated net realisable value" using the following cost formulae:

a) Raw materials and : Weighted Average Cost

packing materials

b) Store and Spares parts : At cost

c) Materials in Bond : At cost (exclusive of

customs duty)

d) Finished goods and : Material cost plus Work-In-Progress appropriate share of

production overheads

e) Finished goods are inclusive of applicable excise duty.

2. The items of inventories remaining dormant for more than one year are considered as ''non-moving inventories'' and due allowance is made for the same against the closing inventories.

(ix) Trade Receivables :

Trade Receivables outstanding for more than one year are reviewed as to their prevailing status and probability of recovery and necessary provision is made for the receivables which are doubtful of recovery.

(x) Research and Development :

Revenue expenditure pertaining to Research and Development is expensed. Capital expenditure is treated as forming part of fixed assets.

(xi) Foreign Currency Transactions :

Foreign currency transactions are recorded at the rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currency are translated at year - end rates. Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense. In respect of liability relating to acquistion of fixed assets loss/gain'' if any'' arising out of such conversion'' is adjusted to the cost of the fixed assets. Depreciation on the revised unamortised depreciable amount is provided prospectively in accordance with Schedule XIV of the Companies Act''1956.

(xii) Accounting for Taxes :

Tax expense charged to the profit and loss account comprises current tax and deferred tax. Provision for current tax is made on a yearly basis'' under the tax payable method after taking into consideration credit for allowances'' deductions and exemptions and considering Minimum Alternate Tax as applicable. The deferred tax is recognised for all temporary differences at currently available tax rates. Deferred tax assets are recognised subject to the consideration of prudence.

(xiii)Segment Reporting :

The company has identified Reinforced Polypropylene as the only reportable business segment.

(xiv)Employee Benefit : As per AS 15 (Revised)

The Company has adopted "Employee Benefits" as per AS 15 (Revised).

(xv) Related party disclosures :

The related party relationships and / or transactions with them have been identified in accordance with Accounting Standard (AS 18)

(xvi)Impairment of Assets :

The company determines whether there is any indication of impairment of the carrying amount of its assets. The recoverable amount of such assets are estimated'' if any indication exist and impairment loss is recognized wherever the carrying amount of the assets exceeds it recoverable amount.

(xvii) Earnings per share :

The Paid up share capital of the company consists only of equity shares. The basic and diluted earnings per equity share are disclosed.


Mar 31, 2012

(i) Accounting Convention:

The financial statements are prepared under historical cost convention on accrual basis of accounting to comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 and with the relevant provisions of the Companies Act, 1956.

All the assets and liabilities have been classified as current and non current as per company's normal operating cycle and other criteria set out in schedule VI to the companies act,1956.

(ii) Use of Estimates:

In the preparation of financial statements, certain estimates and assumptions are made by the management to conform with the generally accepted accounting principles. The actual results could differ from these estimates.

(iii) Revenue Recognition :

Revenue is recognized as under:

a) Sales of products: On dispatch of the product to the customers which generally coincides with transfer of ownership. Sales are inclusive of excise duty and net of discounts.

b) Sale of services represents commission accrued on orders booked with principals and executed.

c) Interest: On a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Dividends: When the Company's right to receive payment is established.

(iv) Fixed Assets :

a) Fixed assets are capitalized at the acquisition cost (viz.) purchase price, import duties, levies and expenses and costs directly attributable for bringing the assets to its working condition for intended use.

b) Capital work-in-progress represents expenditure incurred for new projects/capex under implementation. Resultant expenditure (including borrowing costs, if any) incurred for these projects up to the date of commencement of commercial production have been considered as part of the project cost.

(v) Depreciation and amortization expenses: Depreciation is charged under straight line method on buildings, plant and machinery and electrical installations and under W.D.V. method on other assets at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956. Premium on leasehold land is amortized over the period of lease.

(vi) Borrowing Costs :

The borrowing costs incurred on loans taken for acquisition of qualifying assets are capitalized up to the date of commencement of commercial production/till the asset is ready for its intended use.

(vii) Investments :

Noncurrent Investments are stated at cost and current investments are stated at Net Asset Value (NAV).

(viii)Inventories :

Inventories as taken and certified by the Management are valued at "lower of cost and estimated net realizable value" using the following cost formulae:

a) Raw materials and : Weighted Average packing materials Cost

b) Store and Spares : At cost parts

c) Materials in Bond : At cost (exclusive of customs duty)

d) Finished goods and : Material cost plus Work-In-Progress appropriate share of production overheads

e) Finished goods are inclusive of applicable excise duty.

(ix) Research and Development :

Revenue expenditure pertaining to Research and Development is expensed. Capital expenditure is treated as forming part of fixed assets.

(x) Foreign Currency Transactions :

Foreign currency transactions are recorded at the rates prevailing on the date of the transaction. Monetary assets and liabilities in foreign currency are translated at year - end rates. Exchange differences arising on settlement of transactions and translation of monetary items are recognized as income or expense. In respect of liability relating to acquisition of fixed assets loss/gain, if any, arising out of such conversion, is adjusted to the cost of the fixed assets. Depreciation on the revised unamortized depreciable amount is provided prospectively in accordance with Schedule XIV of the Companies Act,1956.

(xi) Accounting for Taxes :

Tax expense charged to the profit and loss account comprises current tax and deferred tax. Provision for current tax is made on a yearly basis, under the tax payable method after taking into consideration credit for allowances, deductions and exemptions and considering Minimum Alternate Tax as applicable.

The deferred tax is recognized for all temporary differences at currently available tax rates. Deferred tax assets are recognized subject to the consideration of prudence.

(xii) Segment Reporting :

The company has identified Reinforced Polypropylene as the only reportable business segment.

(xiii)Employee Benefit : As per AS 15 (Revised)

The Company has adopted "Employee Benefits" as per AS 15 (Revised).

(xiv)Related party disclosures :

The related party relationships and / or transactions with them have been identified in accordance with Accounting Standard (AS 18)

(xv) Earnings per share :

The paid up share capital of the company consists only of equity shares. The basic and diluted earnings per equity share are disclosed.

i) The company is authorized to issue Equity and 16% Cumulative Redeemable Preference shares. However the company has one class of equity having a par value of Rs. 10 each . Each share holder is eligible for one vote per share. The dividend proposed by the Board of directors is subject to approval of share holders, except in case of interim dividend. In the event of liquidation, the equity share holders are eligible to receive remaining assets of the company after distribution of all preferential amounts, in proportion of their share holding.

iii) The company bought back in aggregate 118425 number of equity shares during the financial years 2008-2009 and 2009-2010.

iv) Pursuant to the Board resolution, 4900 partly paid up equity shares,which were forfeited in the past have been cancelled during the year

 
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