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Accounting Policies of Prag Bosimi Synthetics Ltd. Company

Mar 31, 2015

(i) Basis of Preparation

The Financial Statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 2013.

The Company follows the accrual system of accounting and recognizes income and expenditure on accrual basis.

Accounting policies not referred to otherwise are consistent with the Generally Accepted Accounting Principles.

(ii) Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction and includes amounts added/ reduced on revaluation less accumulated depreciation. Impairment losses have been accounted as per the mandatory Accounting Standards issued by The Institute of Chartered Accountants of India as applicable and the relevant provisions of The Companies Act, 2013.

Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred (including expenses on test runs and experimental production) for the period prior to the commencement of commercial production are capitalized proportionately as part of the asset cost in respect of machineries put to use.

(iii) Depreciation:

(a) Depreciation on fixed assets other than lease-hold land is provided on straight- line method at the rates and in the manner specified in Schedule II of Companies Act, 2013.

(b) Depreciation on additions/deductions during the year has been provided on pro- rata basis with reference to the month of addition/deduction.

(iv) Expenditure during construction period:

As per the consistent accounting policy all expenditure related to the project construction/ implementation and income arising out of project activities and funds related to the project are capitalized and allocated to the respective fixed assets.

(v) Investments:

Long-term investments are valued at cost subject to reduction made for diminution in value that is other than temporary in nature.

(vi) Inventories:

In accordance with the revised Accounting Standard (AS-2), Inventories are valued at lower of cost or net realizable value after providing for obsolescence, if any.

(a) Raw materials, stores, spares, consumables and construction materials: At lower of cost or net realizable value

(b) Materials in process: At lower of cost or net realizable value.

(c) Finished Goods: At lower of cost or net realizable value.

(vii) Retirement Benefits:

(a) Defined Contribution Plan

The Company's liability towards Employee's Provident Fund scheme administered by the Employees Provident Fund Scheme, Govt. of India is considered as Defined Contribution Plan. The Company's contributions paid towards these defined contribution plans is recognized as expense in the Profit and Loss Account during the period in which the employees rendered the related service.

(b) Defined Benefit Plan

Company's liabilities towards gratuity and leave encashment if any are considered as Defined Benefit Plans. The present value of the obligations towards gratuity is determined based on actuarial valuation using the projected unit credit method. As regards the Leave encashment, it is calculated on the actual balance leave of each employee on the year-end. This is done on the same basis as in the last accounting period.

(viii) Transactions of foreign currency items:

Transactions in foreign currency are recorded at the rate of exchange in force at the date of transaction. Foreign currency assets and other liabilities other than for financing fixed assets are stated at the rate of exchange prevailing at the year-end and resultant gains/losses are recognized in the capital work in progress. Foreign currency loans for financing fixed assets (other than those where the company is protected against exchange fluctuations) are accounted for at the rate of exchange prevailing at the year end and the resultant exchange difference is adjusted to the cost of assets.

(ix) Government Grants:

(a) Revenue grants are recognized in the Profit & Loss account.

(b) Capital Grants relating to specific fixed assets are shown under capital reserve.

(x) Taxes on Income:

No provision for taxation is made as the company has incurred losses during the period.

No provision for deferred taxation is made in accounts as the company has been incurring losses year after year.

(xi) Provisions:

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.

(xii) There were no events occurring after the Balance Sheet date which require reporting.

(xiii) Revenue Recognition:

(a) Sales are recognized on dispatch to customers and are net of returns, discounts and sales tax.

(b) Other Income and Expenditure are recognized and accounted on accrual basis.


Sep 30, 2013

(i) Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction and includes amounts added/reduced on revaluation less accumulated depreciation. Impairment losses have been accounted as per the mandatory Accounting Standards issued by The Institute of Chartered Accountants of India as applicable and the relevant provisions of The Companies Act, 1956.

Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred (including expenses on test runs and experimental production) for the period prior to the commencement of commercial production are capitalized proportionately as part of the asset cost in respect of machineries put to use.

(ii) Depreciation :

(a) Depreciation on fixed assets other than lease-hold land is provided on straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

(b) Depreciation on additions/ deductions during the period has been provided on pro-rata basis with reference to the month of addition/deduction.

(c) Effective from 15'' October, 2003 , the Leasehold land is amortized over the balance period of unexpired lease period in equal installments. The leasehold land was acquired on 1st August, 1989 for 30 years period at a premium of Rs.. 599,678/-. Accordingly, the premium paid for acquiring the lease hold rights on the said leasehold land are being written off over the balance unexpired life of the lease.

(d) The Company has not provided any depreciation on major part of its Plant & Machineries which are not put to use during the accounting period under review as per the accounting policy followed by the company.

(iii) Expenditure during construction period :

As per the consistent accounting policy all expenditure related to the project construction/implementation and income arising out of project activities and funds related to the project are capitalized and allocated to the respective fixed assets.

(iv) Investments :

Long-term investments are valued at cost subject to reduction made for diminution in value that is other than temporary in nature.

(v) Inventories :

In accordance with the revised Accounting Standard (AS-2), Inventories are valued at lower of cost or net realizable value after providing for obsolescence, if any.

(a) Raw materials, stores, spares, consumables and construction materials: At lower of cost or net realizable value.

(b) Materials in process : At lower of cost or net realizable value.

(c) Finished Goods : At lower of cost or net realizable value.

(vi) Retirement Benefits :

(a) Defined Contribution Plan

The Company''s liability towards Employee''s Provident Fund scheme administered by the Employees Provident Fund Scheme, Government of India is considered as Defined Contribution Plan. The Company''s contributions paid towards these defined contribution plan amounting to Rs. 20,45,389 /- is recognized as expense in the statement of Profit and Loss during the period in which the employees rendered the related service.

(b) Defined Benefit Plan

Company''s liabilities towards gratuity and leave encashment if any are considered as Defined Benefit Plans. The present value of the obligations towards gratuity is determined based on actuarial valuation using the projected unit credit method. As regards the Leave encashment, it is calculated on the actual balance leave of each employee on the period end. Provision of Rs. 36,61,913/- is accordingly made for leave encashment during the current period. This is done on the same basis as in the last accounting period.

(vil) Transactions of foreign currency items :

Transactions in foreign currency are recorded at the rate of exchange in force at the date of transaction. Foreign currency assets and other liabilities other than for financing fixed assets are stated at the rate of exchange prevailing at the period end and resultant gains/losses are recognized in the capital work in progress. Foreign currency loans for financing fixed assets (other than those where the company is protected against exchange fluctuations) are accounted for at the rate of exchange prevailing at the period end and the resultant exchange difference is adjusted to the cost of assets.

(viii) Government Grants :

(a) Revenue grants are recognized in the Profit & Loss account.

(b) Capital Grants relating to specific fixed assets are shown under capital reserve.

(ix) Taxes on Income :

No provision for taxation is made as the profits and gains of units set up in North Eastern State are tax free under the Income Tax Act, 1961 and the company has also incurred losses during the period.

No provision for deferred taxation is made in accounts as the company has been incurring losses period after period and Company''s business income is also exempt u/s 80IC of Income Tax Act, 1961.

(x) Provisions:

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.

(xi) There were no events occurring after the Balance Sheet date which are reportable.

(xii) Revenue Recognition:

(a) Sales are recognized on dispatch to customers and are net of returns, discounts and sales tax.

(b) Other Income and Expenditure are recognized and accounted on accrual basis.


Mar 31, 2012

(1) Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction and includes amounts added/ reduced on revaluation less accumulated depreciation. Impairment losses have been accounted as per the mandatory Accounting Standards issued by The Institute of Chartered Accountants of India as applicable and the relevant provisions of The Companies Act, 1956.

Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred (including expenses on test runs and experimental production) for the period prior to the commencement of commercial production are capitalized proportionately as part of the asset cost in respect of machineries put to use.

(2) Depreciation:

(a) Depreciation on fixed assets other than lease-hold land is provided on straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

(b) Depreciation on additions/deductions during the year has been provided on pro-rata basis with reference to the month of addition/ deduction.

(c) Effective from 01.10.2003, the Leasehold land is amortized over the balance period of unexpired lease period in equal installments. The leasehold land was acquired on 1.8.1989 for 30 years period at a premium of Rs. 599,678/-. Accordingly, the premium paid for acquiring the lease hold rights on the said leasehold land are being written off over the balance unexpired life of the lease.

(d) The Company has not provided any depreciation on major part of its Plant & Machinery which is not used during the accounting period under review for practical difficulties. Such depreciation not provided is computed to be Rs. 21,86,52,089/- Similarly, on the same reasoning, the Company has written bs ck and credited to profit & Loss Account an amount of Rs.11,62,80,208/-by way of depreciation provided in the accounting period 01.10.2009 to 30.09.2010 and Rs.2,49,000/-provided in the accounting period 01.04.2008 to 30.09.2009.

(3) Expenditure during construct on period:

As per the consistent accounting policy all expenditure related to the p oject construction/ implementation and income arising out of project activities and funds related to the project are capitalized and allocated to the respective fixed assets.

(4) Investments:

Long-term investments are valued at cost subject to reduction made for diminution in value that is other than temporary in natuife.

(5) Inventories:

In accordance with the revised Accounting Standard (AS-2), Inventories are valued at lower of cost or net realizable value; after providing for obsolescence, if any.

(a) Raw materials, stores, sriares, consumables and construction materials: At lower of cost or net realizable value

(b) Materials in process: At lower of cost or net realizable value

(c) Finished Goods: At lovjver of cost or net realizable value. j

(6) Retirement Benefits:

Defined Contribution Plan

The Company's liability towards Employee's Provident Fund scheme administered by the Employees Provident Fund Scheme, Govt, of India is considered as Defined Contribution Plan. The Company's contributions paid towards these defined contribution plan amounting to Rs.1,394,468/-is recognized as expense in the Profit and Loss Account during the period in which the employees rendered the related service.

Defined Benefit Plan

Company's liabilities towards gratuity and leave encashment if any are considered as Defined Benefit Plans. The present value of the obligations towards gratuity is determined based on actuarial valuation using the projected unit credit method. As regards the Leave encashment, it is calculated on the actual balance leave of each employee on the year-end. Provision of Rs.28,05,932/- is accordingly made for leave encashment during the current year. This is done on the same basis as in the last accounting period.

(7) Transactions of foreign currency items:

Transactions in foreign currency are recorded at the rate of exchange in force at the date of transaction. Foreign currency assets and other liabilities other than for financing fixed assets are stated at the rate of exchange prevailing at the year-end and resultant gains/losses are recognized in the capital work in progress. Foreign currency loans for financing fixed assets (other than those where the company is protected against exchange fluctuations) are accounted for at the rate of exchange prevailing at the year end and the resultant exchange difference is adjusted to the cost of assets.

(8) Government Grants:

(a) Revenue grants are recognized in the Profit

& Loss account.

(b) Capital Grants relating to specific fixed assets are shown under capital reserve.

(9) Taxes on Income:

No provision for taxation is made as the profits and gains of units set up in North Eastern State are tax free under the Income Tax Act 1961 and the company has also incurred losses during the year.

No provision for deferred taxation is made in accounts as the company has been incurring losses year after year and Company's business income is also exempt u/s 80IC of Income Tax Act of 1961.

(10) Provisions:

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.

(11) There were no such events occurring after the Balance Sheet date which are reportable.

(12) Revenue Recognition:

(a) Sales are recognized on dispatch to customers and are net of returns, discounts and sales tax.

(b) Other Income and Expenditure are recognized and accounted on accrual basis.


Sep 30, 2010

(1) Basis of preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956.

The Company follows the accrual system of accounting and recognises Income and expenditure on accrual basis.

Accounting policies not referred to otherwise are consistent with the Generally Accepted Accounting Principles.

(2) Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction and includes amounts added/ reduced on revaluation less accumulated depreciation. Impairment losses have been accounted as per the mandatory Accounting Standards issued by The Institute of Chartered Accountants of India as applicable and the relevant provisions of The Companies Act, 1956.

Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred (including expenses on test runs and experimental production) for the period prior to the commencement of commercial production are capitalised proportionately as part of the asset cost in respect of machineries put to use.

(3) Depreciation:

(a) Depreciation on fixed assets other than lease-hold land is provided on straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

(b) Depreciation on additions/deductions during the year has been provided on pro-rata basis with reference to the month of addition/ deduction.

(c) Effective from 01.10.2003, the Leasehold land is amortized over the balance period of unexpired lease period in equal installments.

The leasehold land was acquired on 1.8.1989 for 30 years period at a premium of Rs. 599,678/-. Accordingly, the premium paid for acquiring the lease hold rights on the said leasehold land are being written off over the balance unexpired life of the lease.

(4) Expenditure during construction period:

As per the consistent accounting policy all expenditure related to the project construction/ implementation and income arising out of project activities and funds related to the project are capitalized and allocated to the respective fixed assets.

(5) Investments:

Long-term investments are valued at cost subject to reduction made for diminution in value-that is other than temporary in nature.

(6) Inventories:

In accordance with the revised Accounting Standard (AS-2), Inventories are valued at lower of cost or net realizable value after providing for obsolescence, if any.

(a) Raw materials, stores, spares, consumables and construction materials: At lower of cost or net realizable value

(b) Materials in process: At lower of cost or net realizable value

(c) Finished Goods: At lower of cost or net realizable value.

(7) Retirement Benefits:

Defined Contribution Plan

The Companys liability towards Employees Provident Fund scheme administered by the Employees Provident Fund Scheme, Govt, of India is considered as Defined Contribution Plan. The Companys contributions paid/payable towards these defined contribution plan is recognized as expense in the Profit and Loss Account during the period in which the employees rendered the related service.

Defined Benefit Plan

Companys liabilities towards gratuity and leave encashment if any are considered as Defined

Benefit Plans. The present value of the obligations towards gratuity is determined based on actuarial valuation using the projected unit credit method. As regards the Leave encashment, it is calculated on the actual balance leave of each employee on the year-end. Provision of Rs. 6,34,424 is accordingly made for leave encashment during the current year. This is done on the same basis as in the last accounting period.

(8) Transactions of foreign currency items:

Transactions in foreign currency are recorded at the rate of exchange in force at the date of transaction. Foreign currency assets and other liabilities other than for financing fixed assets are stated at the rate of exchange prevailing at the year-end and resultant gains/losses are recognized in the capital work in progress. Foreign currency loans for financing fixed assets (other than those where the company is protected against exchange fluctuations) are accounted for at the rate of exchange prevailing at the year end and the resultant exchange difference is adjusted to the cost of assets.

(9) Government Grants:

(a) Revenue grants are recognized in the Profit & Loss account.

(b) Capital Grants relating to specific fixed assets are shown under capital reserve.

(10) Provision for taxation:

No provision for taxation is made as the profits and gains of units set up in North Eastern State are tax free under the Income Tax Act 1961 and the company has also incurred losses during the year.

(11) Events occurring after the Balance Sheet Date:

In term of Corporate Debt Restructuring Scheme, the Company has issued 8% Optionally Cumulative Convertible Debentures amounting to Rs. 57.52 Crore to the Financial Institution, Banks and Insurance Companies on 23rd March, 2011.

(12) Revenue Recognition:

(a) Sales are recognized on dispatch to customers and are net of returns, discounts and sales tax.

(b) Other Income and Expenditure are recognized and accounted on accrual basis.


Sep 30, 2009

(1) Basis of preparation of Financial Statements:

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956.

The Company follows the accrual system of accounting and recognises income and expenditure on accrual basis.

Accounting policies not referred to otherwise are consistent with the Generally Accepted Accounting Principles.

(2) Fixed Assets:

Fixed Assets are stated at cost of acquisition or construction and includes amounts added/reduced on revaluation less accumulated depreciation. Impairment losses have been accounted as per the mandatory Accounting Standards issued by The Institute of Chartered Accountants of India as applicable and the relevant provisions of The Companies Act, 1956.

Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred (including expenses on test runs and experimental production) for the period prior to the commencement of commercial production are capitalised proportionately as part of the asset cost in respect of machineries put to use.

(3) Depreciation:

(a) Depreciation on fixed assets other than leasehold land is provided on straight-line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

(b) Depreciation on additions/deductions during the year has been provided on pro-rata basis with reference to the month of addition/deduction.

(c) Effective from 01.10.2003, the leasehold land is amortized over the balance period of unexpired lease period in equal installments. The leasehold land was acquired on 1.8.1989 for 30 years period at a premium of Rs. 599,678/-. Accordingly, the premium paid for acquiring the lease hold rights on the said leasehold land are being written off over the balance unexpired life of the lease of 15 years @ Rs. 40,000 per annum. This does not result in any change during the current period and hence there is no effect on Loss for the period.

(4) Expenditure during construction period:

As per the consistent accounting policy all expenditure related to the project construction/implementation and income arising out of project activities and funds related to the project are capitalized and allocated to the respective fixed assets.

(5) Investments:

Long-term investments are valued at cost subject to reduction made for diminution in value that is other than temporary in nature.

(6) Inventories:

In accordance with the revised Accounting Standard (AS- 2), Inventories are valued at lower of cost or net realizable value after providing for obsolescence, if any.

(a) Raw materials, stores, spares, consumables and construction materials: At lower of cost or net realizable value

(b) Materials in process: At lower of cost or net realizable value

(c) Finished Goods: At lower of cost or net realizable value.

(7) Retirement Benefits:

Defined Contribution Plan

The Companys liability towards Employees Provident Fund scheme administered by the Employees Provident Fund Scheme, Govt, of India is considered as Defined Contribution Plan. The Companys contributions paid/ payable towards these defined contribution plan is recognized as expense in the Profit and Loss Account during the period in which the employees rendered the related service.

Defined Benefit Plan

Companys liabilities towards gratuity and leave encashment if any are considered as Defined Benefit Plans. The present value of the obligations towards gratuity is determined based on actuarial valuation using the projected unit credit method. As regards the leave encashment, it is calculated on the actual balance leave of each employee on the year-end. Provision of Rs.7,23,670 is accordingly made for leave encashment during the current period. This is done on the same basis as in the last accounting period.

(8) Transactions of foreign currency items:

Transactions in foreign currency are recorded at the rate of exchange in force at the date of transaction. Foreign currency assets and other liabilities other than for financing fixed assets are stated at the rate of exchange prevailing at the year-end and resultant gains/losses are recognized in the capital wo* in progress. Foreign currency loans for financing fixed assets (other than those where the company is protected against exchange fluctuations) are accounted for at the rate of exchange prevailing at the year end and the resultant exchange difference is adjusted to the cost of assets.

(9) Government Grants:

(a) Revenue grants are recognized in the Profit & Loss account.

(b) Capital Grants relating to specific fixed assets are shown under capital reserve.

(10) Provision for taxation:

No provision for taxation is made as the profits and gains of units set up in North Eastern State are tax free under the Income Tax Act 1961 and the company has also incurred losses during the period.

(11) Events occurring after the Balance Sheet Date:

In accordance with the Accounting Standard 4, the company has given effects in accounts to the Corporate Debt Restructuring (CDR) Package approved on 17/03/2009 by the CDR Empowered Group. The same has been accepted by the Company and the Consortium of Financial Institutions and Banks who have provided the finance to the company.

(12) Revenue Recognition:

(a) Sales are recognized on dispatch to customers and are net of returns, discounts and sales tax.

(b) Other Income and Expenditure are recognized and accounted on accrual basis.

 
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