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Accounting Policies of Polylink Polymers (India) Ltd. Company

Mar 31, 2015

1 Corporate Information

Polylink Polymers (India) Limited (the Company) is a public company domiciled in India and incorporated under the provisions of Companies Act 2013. It's shares are listed on Bombay Stock Exchange Limited.

The Company is leading manufacturer of various compounds for Power cable, Telephone cable and Engineering Plastics.

1.1 BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

These accounts are prepared on the historical cost basis and on the Accounting principles of going concern,Accounting policies not specifically referred to are in accordance with the Accounting standards issued by the Institute of Chartered Accountants of India. The Company has adopted the Mercantile system of accounting. If not stated otherwise,claims are accounted for as receivable if the management is of the opinion that the chance of recovery is higher than not.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current -noncurrent classification of assets and liabilities.

1.2 FIXED ASSETS : DEPRECIATION

i) Fixed assets are recorded on historical cost inclusive of capitalised portion of Pre-operative Expenses and net of recoverable taxes.

ii) Depreciation is provided on Straight Line Method ( on shift basis) in the manner and at the rates mentioned in Schedule II to the Companies Act, 2013 (as amended) on the cost of assets as referred to above.

1.3 INVENTORIES

i) Finished Products : at lower of cost or net realisable value

ii) Stock in process : at cost arrived by estimating percentage of completion.

iii) Raw Materials : at lower of cost or estimated net realisable value (FIFO Basis)

iv) waste and scrap : at net realisable value

v) Stores,Packing : at cost or below cost (FIFO Basis) Materials & Spares and Chemicals

Costs have been calculated with reference to Conversion cost and the expenses incurred to bring the inventory to its present condition and location.

1.4 FOREIGN CURRENCY TRANSACTIONS

i) All transactions in foreign currency, are recorded at the rate of exchange prevailing on the dates when the relevant transactions take place.

ii) Balance in form of Current Assets and Current Liabilities in foreign currency outstanding at the close of the year,are converted in Indian currency at the appropriate rates of exchange prevalling on the date of the Balance sheet, and Resultant gain or loss is accounted for in the statement Profit and loss.

1.5 RESEARCH & DEVELOPMENT (R & D)

Revenue expenses on Research and Development are charged to Profit and Loss Account and capital expenditure on R & D is added to Fixed Assets.

1.6 CONTINGENT LIABILITIES

Contingent liabilities are generally not provided for in the accounts and are shown separately in notes to the Accounts.

1.7 REVENUE RECOGNITION

Domestic Sales are accounted for at the time of despatch. Export sales are accounted with reference to the date of bill of lading. Sales figures are after deduction of usual Trade / Quantity Discounts, Returns, exciseduty and taxes.

1.8 EXPORT BENEFITS:

Export benefits are accounted for on accrual basis based upon estimated benefits which accrue to the company as per DGFT scheme.

1.9 GOVERNMENT GRANTS

Government grants/subsidy in relation to the project and not related to any fixed assets are credited to Capital Reserve.

1.10 EMPLOYEE BENEFIT

(i) Gratuity liability as per Gratuity Act.has been provided for all the eligible employees on the basis of actuarial valuation are funded with LIC under Group Gratuity Scheme.Leave encashment benefit is accounted for on basis of estimated liability at the year end and not on the actuarial valuation basis in view of the fact that it will not materialy affect in terms of total amount.

(ii) Employer's contribution to Employee's provident fund is accounted for on accrual basis and charged to the Profit and Loss Account.

1.11 EXCISE DUTY

Excise Duty payable on the closing stock,awaiting removal,has been accounted for and added to the value of closing stock.

1.12 TAXATION Current Tax

Current tax expense is based on the provisions of Income Tax Act, 1961 and judicial interpretations thereof as at the Balance Sheet date and takes into consideration various deductions and exemptions to which the Company is entitled to as well as the reliance placed by the Company on the legal advices received by it. Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.

DEFERRED TAX:

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the current year and reversal of timing differences for earlier years. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date and are written-down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax

Minimum Alternate Tax

Minimum Alternate Tax (MAT) 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 MAT credit becomes eligible to be recognised as an asset in accordance with the recommendation contained in the Guidance Note on "Accounting for Credit Available in respect of Minimum Alternative Tax under The Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Prout 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.

1.13 IMPAIRMENT OF ASSETS

The Company,in accordance with the Accounting Standard 28 (AS-28) in respect of impairment of Assets, issued by the Institute of Chartered Accountants of India,has adopted the practice of assessing at each Balance Sheet date whether there is any indication that an asset may be impaired and if any such exists, then the company provides for the loss for impairment of Assets after estimating the recoverable amount of the assets.

1.14 PROVISIONS AND CONTINGENT LIABILITY

The Company recognizes a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligations.A disclosure of the contingent liability,if determinable ,is made when there is a possible obligation or a present obligation that may,but probably will not,require an outflow of resources.But where is a possible obligation but the likelihood of outflow of resources is remote,no provision / disclosure is made.

1.15 i) FINANCE LEASES

In respect of assets acquired on or after 1st April,2001,under finance lease the same are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term.Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.Interest component is charged to the Profit and Loss Account.

ii) OPERATING LEASE

The revenue for operating lease is recognised in terms of the agreement.


Mar 31, 2014

1 Corporate Information

Polylink Polymers (India) Limited (the Company) is a public company domiciled in India and incorporated under the provisions of Companies Act 1956. It''s shares are listed on Bombay Stock Exchange Limited.

The Company is leading manufacturer of various compounds for Power cable, Telephone cable and Engineering Plastics.

1.1 BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

These accounts are prepared on the historical cost basis and on the Accounting principles of going concern,Accounting policies not specifically referred to are in accordance with the Accounting standards issued by the Institute of Chartered Accountants of India. The Company has adopted the Mercantile system of accounting. If not stated otherwise,claims are accounted for as receivable if the management is of the opinion that the chance of recovery is higher than not.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current -noncurrent classification of assets and liabilities.

1.2 FIXED ASSETS : DEPRECIATION

i) Fixed assets are recorded on historical cost inclusive of capitalised portion of Pre-operative Expenses and net of recoverable taxes.

ii) Depreciation is provided on Straight Line Method in the manner and at the rates mentioned in Schedule XIV to the Companies Act, 1956 (as amended) on the cost of assets as referred to above.

1.3 INVENTORIES

i) Finished Products : at lower of cost or net realisable value

ii) Stock in process : at cost arrived by estimating percentage of completion.

iii) Raw Materials : at lower of cost or estimated net realisable value (FIFO Basis)

iv) waste and scrap : at net realisable value

v) Stores,Packing : at cost or below cost (FIFO Basis) Materials & Spares and Chemicals

Costs have been calculated with reference to Conversion cost and the expenses incurred to bring the inventory to its present condition and location.

1.4 FOREIGN CURRENCY TRANSACTIONS

i) All transactions in foreign currency, are recorded at the rate of exchange prevailing on the dates when the relevant transactions take place.

ii) Balance in form of Current Assets and Current Liabilities in foreign currency outstanding at the close of the year,are converted in Indian currency at the appropriate rates of exchange prevalling on the date of the Balance sheet, and Resultant gain or loss is accounted for in the statement Profit and loss.

1.5 RESEARCH & DEVELOPMENT (R & D)

Revenue expenses on Research and Development are charged to Profit and Loss Account and capital expenditure on R & D is added to Fixed Assets.

1.6 CONTINGENT LIABILITIES

Contingent liabilities are generally not provided for in the accounts and are shown separately in notes to the Accounts.

1.7 REVENUE RECOGNITION

Domestic Sales are accounted for at the time of despatch. Export sales are accounted with reference to the date of bill of lading. Sales figures are after deduction of usual Trade / Quantity Discounts, Returns, exciseduty and taxes.

1.8 EXPORT BENEFITS:

Export benefits are accounted for on accrual basis based upon estimated benefits which accrue to the company as per DGFT scheme.

1.9 GOVERNMENT GRANTS

Government grants/subsidy in relation to the project and not related to any fixed assets are credited to Capital Reserve.

1.10 EMPLOYEE BENEFIT

(i) Gratuity liability as per Gratuity Act.has been provided for all the eligible employees on the basis of actuarial valuation are funded with LIC under Group Gratuity Scheme.Leave encashment benefit is accounted for on basis of estimated liability at the year end and not on the actuarial valuation basis in view of the fact that it will not materialy affect in terms of total amount.

(ii) Employer''s contribution to Employee''s provident fund is accounted for on accrual basis and charged to the Profit and Loss Account.

1.11 EXCISE DUTY

Excise Duty payable on the closing stock,awaiting removal,has been accounted for and added to the value of closing stock.

1.12 TAXATION Current Tax

Current tax expense is based on the provisions of Income Tax Act, 1961 and judicial interpretations thereof as at the Balance Sheet date and takes into consideration various deductions and exemptions to which the Company is entitled to as well as the reliance placed by the Company on the legal advices received by it. Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.

DEFERRED TAX:

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the current year and reversal of timing differences for earlier years. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date and are written-down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax

Minimum Alternate Tax

Minimum Alternate Tax (MAT) 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 MAT credit becomes eligible to be recognised as an asset in accordance with the recommendation contained in the Guidance Note on "Accounting for Credit Available in respect of Minimum Alternative Tax under The Income Tax Act, 1961" 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.

1.13 IMPAIRMENT OF ASSETS

The Company,in accordance with the Accounting Standard 28 (AS-28) in respect of impairment of Assets, issued by the Institute of Chartered Accountants of India,has adopted the practice of assessing at each Balance Sheet date whether there is any indication that an asset may be impaired and if any such exists, then the company provides for the loss for impairment of Assets after estimating the recoverable amount of the assets.

1.14 PROVISIONS AND CONTINGENT LIABILITY

The Company recognizes a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligations. A disclosure of the contingent liability,if determinable ,is made when there is a possible obligation or a present obligation that may,but probably will not,require an outflow of resources.But where is a possible obligation but the likelihood of outflow of resources is remote,no provision / disclosure is made.

1.15 i) FINANCE LEASES

In respect of assets acquired on or after 1st April,2001,under finance lease the same are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term.Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Interest component is charged to the Profit and Loss Account.

ii) OPERATING LEASE

The revenue for operating lease is recognised in terms of the agreement.


Mar 31, 2013

1.1 BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

These accounts are prepared on the historical cost basis and on the Accounting principles of goin concern, Accounting policies not specifically referred to are in accordance with the Accounting standards issued by the Institute of Chartered Accountants of India. The Company has adopted the Mercantile system of accounting. If not stated otherwise, claims are accounted for as receivable if the management is of the opinion that the chance of recovery is higher than not.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current -noncurrent classification of assets and liabilities.

1.2 FIXED ASSETS : DEPRECIATION

(i) Fixed assets are recorded on historical cost inclusive of capitalised portion of Pre-operative Expenses and net of recoverable taxes.

(ii) Depreciation is provided on Straight Line Method in the manner and at the rates mentioned in Schedule XIV to the Companies Act, 1956 (as amended) on the cost of assets as referred to above.

1.3 INVENTORIES

(i) Finished Products : at lower of cost or net realisable value

(ii) Stock in process : at cost arrived by estimating percentage of completion.

(iii) Raw Materials : at lower of cost or estimated net realisable value (FIFO Basis)

(iv) waste and scrap : at net realisable value

(v) Stores,Packing Materials & Spares at cost or below cost (FIFO Basis) and Chemicals :

Costs have been calculated with reference to Conversion cost and the expenses incurred to bring the inventory to its present condition and location.

1.4 FOREIGN CURRENCY TRANSACTIONS

(i) All transactions in foreign currency, are recorded at the rate of exchange prevailing on the dates when the relevant transactions take place.

(ii) Balance in form of Current Assets and Current Liabilities in foreign currency outstanding at the close of the year, are converted in Indian currency at the appropriate rates of exchange prevalling on the date of the Balance sheet, and Resultant gain or loss is accounted for in the statement Profit and loss.

1.5 RESEARCH & DEVELOPMENT (R & D)

Revenue expenses on Research and Development are charged to Profit and Loss Account and capital expenditure on R & D is added to Fixed Assets.

1.6 CONTINGENT LIABILITIES

Contingent liabilities are generally not provided for in the accounts and are shown separately in notes to the Accounts.

1.7 REVENUE RECOGNITION

Domestic Sales are accounted for at the time of despatch. Export sales are accounted with reference to the date of bill of lading. Sales figures are after deduction of usual Trade / Quantity Discounts, Returns, Exciseduty and taxes.

1.8 EXPORT BENEFITS

Export benefits are accounted for on accrual basis based upon estimated benefits which accrue to the company as per DGFT scheme.

1.9 GOVERNMENT GRANTS

Government grants/subsidy in relation to the project and not related to any fixed assets are credited to Capital Reserve.

1.10 EMPLOYEE BENEFIT

(I) Gratuity liability as per Gratuity Act.has been provided for all the eligible employees on the basis of actuarial valuation are funded with LIC under Group Gratuity Scheme.Leave encashment benefit is accounted for on basis of estimated liability at the year end and not on the actuarial valuation basis in view of the fact that it will not materialy affect in terms of total amount.

(ii) Employer''s contribution to Employee''s provident fund is accounted for on accrual basis and charged to the Profit and Loss Account.

1.11 EXCISE DUTY

Excise Duty payable on the closing stock,awaiting removal,has been accounted for and added to the value of closing stock.

1.12 TAXATION

DEFERRED TAX:

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the current year and reversal of timing differences for earlier years. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date and are written-down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax

1.13 IMPAIRMENT OF ASSETS

The Company, in accordance with the Accounting Standard 28 (AS-28) in respect of impairment of Assets, issued by the Institute of Chartered Accountants of India, has adopted the practice of assessing at each Balance Sheet date whether there is any indication that an asset may be impaired and if any such exists ,then the company provides for the loss for impairment of Assets after estimating the recoverable amount of the assets.

1.14 PROVISIONS AND CONTINGENT LIABILITY

The Company recognizes a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligations. A disclosure of the contingent liability, if determinable, is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. But where is a possible obligation but the likelihood of outflow of resources is remote, no provision / disclosure is made.

1.15 (I) FINANCE LEASES

In respect of assets acquired on or after 1st April,2001,under finance lease the same are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term. Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Interest component is charged to the Profit and Loss Account.

(ii) OPERATING LEASE

The revenue for operating lease is recognised in terms of the agreement.


Mar 31, 2012

1.1 BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

These accounts are prepared on the historical cost basis and on the Accounting principles of going concern,Accounting policies not specifically referred to are in accordance with the Accounting standards , ~ issued by the Institute of Chartered Accountants of India. The Company has adopted the Mercantile system of accounting. If not stated otherwise,claims are accounted for as receivable if the management is of the opinion that the chance of recovery is higher than not.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current -noncurrent classification of assets and liabilities.

1.2 FIXED ASSETS : DEPRECIATION

i) Fixed assets are recorded on historical cost inclusive of capitalised portion of Pre-operative Expenses and net of recoverable taxes.

ii) Depreciation is provided on Straight Line Method in the manner and at the rates mentioned in Schedule XIV to the Companies Act, 1956 (as amended) on the cost of assets as referred to above.

1.3 INVENTORIES

i) Finished Products : at lower of cost or net realisable value

ii) Stock in process : at cost arrived by estimating percentage of completion.

iii) Raw Materials : at lower of cost or estimated net realisable value (FIFO Basis)

iv) waste and scrap : at net realisable value

v) Stores,Packing Materials & Spares: at cost or below cost (FIFO Basis) and Chemicals

Costs have been calculated with reference to Conversion cost and the expenses incurred to bring the inventory to its present condition and location.

1.4 FOREIGN CURRENCY TRANSACTIONS

i) All transactions in foreign currency, are recorded at the rate of exchange prevailing on the dates when the relevant transactions take place.

ii) Balance in form of Current Assets and Current Liabilities in foreign currency outstanding at the close of the year,are converted in Indian currency at the appropriate rates of exchange prevailing on the date of the Balance sheet, and Resultant gain or loss is accounted for in Profit and loss Account.

iii) In respect of Forward Contracts for Foreign Exchange, the cost / premium is amortised over the life of the contract.

1.5 RESEARCH & DEVELOPMENT (R & D)

Revenue expenses on Research and Development are charged to Profit and Loss Account and capital expenditure on R & D is added to Fixed Assets.

1.6 CONTINGENT LIABILITIES

Contingent liabilities are generally not provided for in the accounts and are shown separately in notes to the Accounts.

1.7 REVENUE RECOGNITION

Domestic Sales are accounted for at the time of despatch. Export sales are accounted with reference to the date of bill of lading. Sales figures are after deduction of usual Trade / Quantity Discounts,Returns, exciseduty and taxes.

1.8 EXPORT BENEFITS:

Export benefits are accounted for on accrual basis based upon estimated benefits to accrue.

1.9 GOVERNMENT GRANTS

Government grants/subsidy in relation to the project and not related to any fixed assets are credited to Capital Reserve.

1.10 EMPLOYEE BENEFIT

(i) Gratuity liability as per Gratuity Act.has been provided for all the eligible employees on the basis of actuarial valuation are funded with LIC under Group Gratuity Scheme.Leave encashment benefit is accounted for on basis of estimated liability at the year end and not on the actuarial valuation basis in view of the fact that it will not materialy affect in terms of total amount.

(ii) Employer's contribution to Employee's provident fund is accounted for on accrual basis and charged to the Profit and Loss Account.

1.11 EXCISE DUTY

Excise Duty payable on the closing stock,awaiting removal,has been accounted for and added to the value of closing stock.

1.12 DEFERRED TAXATION:

The company has adopted Accounting standard-22 (AS-22) as to 'Accounting for Taxation of income' issued by the Institute of Chartered Accountants of India.

1.13 IMPAIRMENT OF ASSETS

The Company,in accordance with the Accounting Standard 28 (AS-28) in respect of impairment of Assets, issued by the Institute of Chartered Accountants of India,has adopted the practice of assessing at each Balance Sheet date whether there is any indication that an asset may be impaired and if any such exists, then the company provides for the loss for impairment of Assets after estimating the recoverable amount of the assets.

1.14 PROVISIONS AND CONTINGENT LIABILITY

The Company recognizes a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligations.A disclosure of the contingent liability,if determinable ,is made when there is a possible obligation or a present obligation that may,but probably will not,require an outflow of resources.But where is a possible obligation but the likelihood of outflow of resources is remote,no provision / disclosure is made.

1.15 i) FINANCE LEASES

In respect of assets acquired on or after 1st April,2001,under finance lease the same are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term. Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Interest component is charged to the Profit and Loss Account.

ii) OPERATING LEASE

The revenue for operating lease is recognised in terms of the agreement.


Mar 31, 2010

A. RECOGNITION OF INCOME & EXPENDITURE

i) These accounts are prepared on the historical cost basis and on the Accounting principles of going

concern.Accounting policies not specifically referred to are in accordance with the Accounting standards issued by the Institute of Chartered Accountants of India. The Company has adopted the Mercantile system of accounting. If not stated otherwise,claims are accounted for as receivable if the management is of the opinion that the chance of recovery is hire than not.

B. FIXED ASSETS : DEPRECIATION

i) Fixed assets are recorded on historical cost inclusive of capitalised portion of Pre-operative Expenses and net of recoverable taxes.

ii) Depreciation is provided on Straight Line Method in the manner and at the rates mentioned in Schedule XIV to the Companies Act, 1956 (as amended) on the cost of assets as referred to above.

C. INVENTORIES

i) Finished Products : at lower of cost or net realisable value

ii) Stock in process : at cost arrived by estimating percentage of completion.

iii) Raw Materials : at lower of cost or estimated net realisable value (FIFO Basis)

iv) waste and scrap : at net realisable value

v) Stores,Packing Materials & Spares : at cost or below cost (FIFO Basis) and Chemicals:

Costs have been calculated with reference to Conversion cost and the expenses incurred to bring the inventory to its present condition and location.

D. FOREIGN CURRENCY TRANSACTIONS

i) All transactions in foreign currency, are recorded at the rate of exchange prevailing on the dates when the relevant transactions take place.

ii) Balance in form of Current Assets and Current Liabilities in foreign currency outstanding at the close of the year.are converted in Indian currency at the appropriate rates of exchange prevailing on the date of the Balance sheet, and Resultant gain or loss is accounted for in Profit and loss Account.

iii) In respect of Forward Contracts for Foreign Exchange.the cost / premium is spred over the life of the contract.

E. RESEARCH & DEVELOPMENT (R & D)

Revenue expenses on Research and Development are charged to Profit and Loss Account and capital expenditure on R & D is added to Fixed Assets.

F. CONTINGENT LIABILITIES

Contingent liabilities are generally not provided for in the accounts and are shown separately in notes to the Accounts.(Refer note 1(0) and 2(A) of schedule K).

G. REVENUE RECOGNITION

Domestic Sales are accounted for at the time of despatch. Export sales are accounted with reference to the date of bill of lading. Sales figures are after deduction of usual Trade / Quantity Discounts.Returns, exciseduty and taxes.

H. EXPORT BENEFITS:

Export benefits are accounted for on accrual basis based upon estimated benefits to accrue.

I. GOVERNMENT GRANTS

Government grants/subsidy in relation to the project and not related to any fixed assets are credited to Capital Reserve.

J. EMPLOYEE BENEFIT (i) Gratuity liability as per Gratuity Act.has been provided for all the eligible employees on the basis of actuarial valuation are funded with LIC under Group Gratuity Scheme.Leave encashment benefit is accounted for on basis of estimated liability at the year end and not on the actuarial valuation basis in view of the fact that it will not materialy affect in terms of total amount.

(ii) Employers contribution to Employees provident fund is accounted for on accrual basis and charged to the Profit and Loss Account.

K. EXCISE DUTY

Excise Duty payable on the closing stock,awaiting removal,has been accounted for and added to the value of closing stock.

L. DEFERRED TAXATION:

The company has adopted Accounting standard-22 (AS-22) as to Accounting for Taxation of income issued by the Institute of Chartered Accountants of India.

M. IMPAIRMENT OF ASSETS

The Company.in accordance with the Accounting Standard 28 (AS-28) in respect of impairment of Assets, issued by the Institute of Chartered Accountants of India.has adopted the practice of assessing at each Balance Sheet date whether there is any indication that an asset may be impaired and if any such exists ,then the company provides for the loss for impairment of Assets after estimating the recoverable amount of the assets.

N. PROVISIONS AND CONTINGENT LIABILITY

The Company recognizes a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligations. A disclosure of the contingent liability, if determinable, is made when there is a possible obligation or a present obligation that may.but probably will not.require and outflow of resources.But where is a possible obligation but the likelihood of outflow of resources is remote,no provision / disclosure is made.

0. i) FINANCE LEASES

In respect of assets acquired on or after 1st April,2001 .under finance lease the same are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term.Lease payments are apportioned between the interest charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.lnterest component is charged to the Profit and Loss Account.

ii) OPERATING LEASE

The revenue for operating lease is recognised in terms of the agreement.

 
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