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Accounting Policies of Prima Plastics Ltd. Company

Mar 31, 2015

1) Basis of Preparation of Financial Statements:

The financial statements of the Company are prepared in accordance with Section 129 of Companies Act, 2013 and accounting principles generally accepted, the Accounting Standards specified under Section 133 of the Companies Act, 2013 and Rule 7 of the Companies (Accounts) Rules, 2014.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure regarding contingent liabilities as at the date of the financial statements and the reported amounts of income and expenses during the year. Examples of such estimates include provision for doubtful debts and advances, obligation under employee's retirement benefits and Income Tax.

The financial statements are prepared on accrual basis under the historical cost convention.

2) Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.

3) Revenue Recognition:

Revenue on sales is recognized when risk and rewards of ownership of products are passed on to customers, which are generally on dispatch of goods. Incomes from services are recognized when services are rendered. Sales are net of discounts, sales tax and returns; excise duty collected on sales is shown by way of deduction from sales. Dividend income is recognized when right to receive dividend is established and there is no uncertainty as to its reliability. Revenue in respect of other income is recognized when a reasonable certainty as to its realization exists.

4) Fixed Assets:

Fixed assets (other than "Freehold land” where no depreciation is charged) are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of purchase price and any directly attributable cost of bringing the assets to working condition for the intended use. Cenvat Receivable and Value added tax, if any on plant & machinery and moulds have been reduced from the cost of acquisition of the said assets.

Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Projects under which assets are not ready for their intended use are shown as Capital Work-in-Progress.

5) Depreciation:

Depreciation on Fixed Assets is provided on life assigned to each asset in accordance with the Schedule - II of the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation.

The carrying amount of the assets as on April 1, 2014 is depreciated over the remaining useful life. Where the useful life of asset has expired, the carrying amount as on April 1,2014 has been charged to the retained earnings as on April 1,2014.

Depreciation for additions to/deductions from, owned assets is calculated pro rata.

6) Impairment of Assets:

As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine the provision for impairment loss and the reversal of impairment loss recognized in previous periods if any.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years are recorded when there is an indication that impairment loss recognized for the asset no longer exists or has been decreased.

7) Investments:

Long term investments are stated at cost of acquisition. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary. Investments in foreign currency are stated at cost by converting at exchange rate prevailing at the time of acquisition / remittance.

Investment in Joint Ventures are held for long term and valued at cost reduced by diminution of permanent nature therein, if any.

8) Inventories:

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them

NOTE TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31,2015

to their respective present location and condition. Cost of raw materials, stores and spares, packing materials, trading and other products are determined on First-In-First-Out (FIFO) basis. The excise duty in respect of the closing inventory of finished goods is included as part of the finished goods. Cost formula used is 'Weighted Average Cost'.

9) Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and in respect of which reliable estimate can be made. At each Balance Sheet date, the carrying value of provisions is reviewed and adjusted to reflect the best current estimate.

Contingent liabilities are not recognized but disclosed in the financial statements.

Contingent assets are neither recognized nor disclosed in the financial statements.

10) Taxes on Income:

I. Current Tax Provision

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) eligible for set-off in subsequent years (as per tax laws) is recognized as on asset by way of credit to the Profit and Loss Account only if, there is convincing evidence of its realization. At each Balance Sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realization.

II. Deferred Tax Provision

Deferred tax asset or liability is recognized for timing differences between the profit as per financial statements and the profit offered for income tax, based on tax rates that have been enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only if, there is virtual certainty that sufficient future taxable income will be available, against which they can be realized.

11) Foreign Currency Transactions:

a) Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis reporting currency between the date of transaction and that of payment / receipts is charged to Profit & Loss Account.

b) Receivables / payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss is accounted for in the Profit & Loss Account.

c) Increase / Decrease in foreign currency loan on account of exchange fluctuation are debited / credited to profit and loss account.

12) Employee Benefits:

Defined Contribution Plan

Defined Benefit Plan:

Gratuity liability is covered under the Gratuity-cum-Insurance Policy of Life Insurance Corporation of India (LIC). The present value of the obligation is determined based on an actuarial valuation. Actuarial gains and losses arising on such valuation are recognized immediately in the Statement of Profit and Loss Account. The amount funded by the Trust administered by the Company under the aforesaid Policy is reduced from the gross obligation under the defined benefit plan to recognize the obligation on a net basis. Contribution to provident fund etc. is accounted on accrual basis.

A defined contribution plan is a post employment benefit plan under which the Company and employee make monthly contribution to the Provident Fund Plan equal to a specified percentage of the covered employee's salary. The Company's contribution is recognized as an expense in the Statement of Profit and Loss during the period in which employee renders the related service.

13) Earning per Share:

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also weighted average number of shares that could have been issued upon conversion of all dilutive potential Equity shares.

14) Borrowing Cost:

Borrowing Cost directly attributable to the acquisition & construction of an asset, which take a substantial period of time to get ready for its intended use are capitalized as part of the cost of such asset, until such time assets is substantially ready for its intended use. All other borrowing costs are recognized in the Profit and Loss Accounts in the period in which they are incurred.

15) Current/ Non Current Items:

All Assets and Liabilities are presented as Current or Non Current as per the Company's normal operating cycle and the other criteria set out in Schedule - III to the Companies Act, 2013.






Mar 31, 2014

1) Basis of preparation of Financial Statements:

These financial statements have been prepared to comply with Accounting Principles Generally accepted in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

The financial statements are prepared on accrual basis under the historical cost convention. The financial statements are presented in Indian rupees rounded off to the neared rupees.

2) Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.

3) Revenue Recognition:

Revenue on sales is recognized when risk and rewards of ownership of products are passed on to customers, which are generally on dispatch of goods. Incomes from services are recognized when services are rendered. Sales are net of discounts, sales tax and returns; excise duty collected on sales is shown by way of deduction from sales. Dividend income is recognized when right to receive dividend is established and there is no uncertainty as to its reliability. Revenue in respect of other income is recognized when a reasonable certainty as to its realization exists.

4) Fixed Assets:

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates. The cost of tangible assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Projects under which assets are not ready for their intended use are shown as Capital Work-in-Progress.

5) Impairment of Assets:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years are recorded when there is an indication that impairment loss recognized for the asset no longer exists or has been decreased.

6) Depreciation:

i) Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act,1956.

ii) Premium on leasehold land and improvement to leasehold premises are being written off over the period of lease.

7) Investments:

Long term investments are stated at cost of acquisition. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary. Investments in foreign currency are stated at cost by converting at exchange rate prevailing at the time of acquisition / remittance.

Investment in Joint Ventures are held for long term and valued at cost reduced by diminution of permanent nature therein, if any.

8) Inventories:

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw materials, stores and spares, packing materials, trading and other products are determined on First-In-First-Out (FIFO) basis. The excise duty in respect of the closing inventory of finished goods is included as part of the finished goods. Cost formula used are ''Weighted Average Cost''.

9) Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and in respect of which reliable estimate can be made. At each Balance Sheet date, the carrying value of provisions is reviewed and adjusted to reflect the best current estimate. Contingent liabilities are not recognized but disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

10) Taxes on Income:

I. Current Tax Provision

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) eligible for set-off in subsequent years (as per tax laws) is recognized as on asset by way of credit to the Statement of Profit and Loss only, if there is convincing evidence of its realization. At each Balance Sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realization.

II. Deferred Tax Provision

Deferred tax asset or liability is recognized for timing differences between the profit as per financial statements and the profit offered for income tax, based on tax rates that have been enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only if, there is virtual certainty that sufficient future taxable income will be available, against which they can be realized.

11) Foreign Currency Transactions:

a) Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-`-vis reporting currency between the date of transaction and that of payment is charged to Statement of Profit & Loss.

b) Receivables / payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss is accounted for in the Statement of Profit & Loss.

c) Increase / Decrease in foreign currency loan on account of exchange fluctuation are debited / credited to Statement of Profit & Loss.

12) Employee Benefits:

Defined Contribution Plan

Defined Benefit Plan:

Gratuity liability is covered under the Gratuity-cum-Insurance Policy of Life Insurance Corporation of India (LIC). The present value of the obligation is determined based on an actuarial valuation. Actuarial gains and losses arising on such valuation are recognized immediately in the Statement of Profit & Loss. The amount funded by the Trust administered by the Company under the aforesaid policy is reduced from the gross obligation under the defined benefit plan to recognize the obligation on a net basis.

Contribution to provident fund etc. is accounted on accrual basis.

A defined contribution plan is a post employment benefit plan under which the Company and employee make monthly contribution to the Provident Fund Plan equal to a specified percentage of the covered employee''s salary. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which employee renders the related service.

13) Earning Per Share:

Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also weighted average number of shares that could have been issued upon conversion of all dilutive potential equity shares.


Mar 31, 2013

1) Accounting Convention:

The accounts have been prepared in accordance with the historical cost convention (except for specifically excluded treatment of accounts referred to in B 16(a) under accrual basis of accounting as per Indian GAAP. Accounts and disclosures thereon comply with the Accounting Standards specified in Companies (Accounting Standard) Rules, other pronouncements of ICAI, provisions of the Companies Act, 1956 and guidelines issued by SEBI as applicable.

Preparation of financial statements in conformity with generally accepted accounting principles, requires estimates and assumption to be made, that affect reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reported period. Actual results could differ from these estimates and differences between the actual results and estimates are recognized in the period in which results are known / materialized.

2) Revenue Recognition:

Revenue on sales is recognized when risk and rewards of ownership of products are passed on to customers, which are generally on dispatch of goods. Incomes from services are recognised when services are rendered. Sales are net of discounts, sales tax and returns; excise duty collected on sales is shown by way of deduction from sales. Dividend income is recognized when right to receive dividend is established and there is no uncertainty as to its reliability. Revenue in respect of other income is recognised when a reasonable certainty as to its realization exists.

3) Fixed Assets:

Fixed assets are recorded at cost of acquisition or construction net of cenvat credit wherever eligible. Cost includes all expenses related to acquisition or construction, including attributable borrowing cost on qualifying assets.

Fixed assets, which are not in use or are held for disposal, are stated at cost less accumulated depreciation or at net realizable value, whichever is lower.

The cost of fixed assets not ready for their intended used before such days are disclosed under Capital Work-in-Progress.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed under Long-Term Loans and Advances.

4) Impairment of Assets:

The carrying amounts of assets are reviewed at each balance sheet date, if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years are recorded when there is an indication that impairment loss recognized for the asset no longer exists or has been decreased.

5) Depreciation:

i) Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956. ii) Premium on leasehold land and improvement to leasehold premises are being written off over the period of lease.

6) Investments:

Long term investments are stated at cost of acquisition. Provision for diminution in value is made only if, in the opinion of management such a decline is other than temporary. Investments in foreign currency are stated at cost by converting at exchange rate prevailing at the time of acquisition / remittance.

Investment in Subsidiaries and Joint Ventures are held for long term and valued at cost reduced by diminution of permanent nature therein, if any.

7) Inventories:

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw materials, stores and spares, packing materials, trading and other products are determined on First In First Out (FIFO) basis. The excise duty in respect of the closing inventory of finished goods is included as part of the finished goods. Cost formula used are ''Weighted Average Cost''.

8) Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and in respect of which reliable estimate can be made. At each Balance Sheet date, the carrying value of provisions is reviewed and adjusted to reflect the best current estimate. Contingent liabilities are not recognized but disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

9) Taxes on Income:

I. Current Tax Provision

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) eligible for set-off in subsequent years (as per tax laws) is recognized as on asset by way of credit to the Profit and Loss Account only if, there is convincing evidence of its realization. At each Balance Sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realization.

II. Deferred Tax Provision

Deferred tax asset or liability is recognized for timing differences between the profit as per financial statements and the profit offered for income tax, based on tax rates that have been enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only if, there is virtual certainty that sufficient future taxable income will be available, against which they can be realized.

10) Foreign Currency Transactions:

a) Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-à-vis reporting currency between the date of transaction and that of payment is charged to Profit & Loss Account.

b) Receivables / payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss is accounted for in the Profit & Loss Account.

c) Increase / Decrease in foreign currency loan on account of exchange fluctuation are debited / credited to profit and loss account.

11) Employee Benefits: Defined Contribution Plan

Contribution to provident fund etc. is accounted on accrual basis.

Defined Benefit Plan:

Gratuity liability is covered under the Gratuity-cum-Insurance Policy of Life Insurance Corporation of India (LIC). The present value of the obligation is determined based on an actuarial valuation. Actuarial gains and losses arising on such valuation are recognized immediately in the Profit and Loss Account. The amount funded by the Trust administered by the Company under the aforesaid Policy is reduced from the gross obligation under the defined benefit plan to recognize the obligation on a net basis.


Mar 31, 2012

1) Accounting Convention:

The accounts have been prepared in accordance with the historical cost convention (except for specifically excluded treatment of accounts referred to in B 16(a) under accrual basis of accounting as per Indian GAAP Accounts and disclosures thereon comply with the Accounting Standards specified in Companies (Accounting Standard) Rules, other pronouncements of ICA!. provisions of the Companies Act, 1956 and guidelines issued by SEBI as applicable.

Preparation of financial statements in conformity with generally accepted accounting principles, requires estimates and assumption to be made, that affect reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reported period. Actual results could differ from these estimates and differences between the actual results and estimates are recognized in the period in which results are known / materialized.

2) Revenue Recognition:

Revenue on sales is recognized when risk and rewards of ownership of products are passed on to customers, which are generally on dispatch of goods. Incomes from services are recognised when services are rendered. Sales are net of discounts, sales tax and returns; excise duty collected on sales is shown by way of deduction from sales. Dividend income is recognized when right to receive dividend is established and there is no uncertainty as to its reliability. Revenue in respect of other income is recognised when a reasonable certainty as to its realization exists.

3) Fixed Assets:

Fixed assets are recorded at cost of acquisition or construction net of Cenvat credit wherever eligible. Cost includes all expenses related to acquisition or construction, including attributable borrowing cost on qualifying assets.

Fixed assets, which are not in use or are held for disposal, are stated at cost less accumulated depreciation or at net realizable value, whichever is lower.

The cost of fixed assets not ready for their intended used before such days are disclosed under Capital Work-in-Progress.

Advances paid towards the acquisition of Fixed Assets outstanding at each Balance Cheet date are disclosed under Long-Term Loans and Advances.

4) Impairment of Assets:

The carrying amounts of assets are reviewed at each balance sheet date, if there is an indication of impairment based on the internal and external factors.

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable amount. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years in recorded when there is an indication that impairment loss recognized for the asset no longer exists or has been decreased.

5) Expenditure during Construction and Expenditure on New Projects:

In case of new Projects and in case of substantial modernization / Expansion at existing units of the Company, all pre-operating expenditure specifically for the project, incurred up to the date of installation, is capitalized and added pro-rata to the cost of fixed assets.

6) Depreciation:

i) Depreciation is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956.

ii) Premium on leasehold land and improvement to leasehold premises are being written off over the period of lease.

7) Investments:

Long term investments are stated at cost of acquisition. Provision for diminution in value, is made only if, in the opinion of management such a decline is other than temporary. Investments in foreign currency are stated at cost by converting at exchange rate prevailing at the time of acquisition / remittance.

Investment in Subsidiaries and Joint Ventures are held for long term and valued at cost reduced by diminution of permanent nature therein, if any.

No profit or losses of subsidiaries are accounted for.

8) Inventories:

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in brining them to their respective present location and condition. Cost of raw materials, stores and spares, packing materials, trading and other products are determined on First In First Out basis (FIFO).

Scraps are valued at net realizable value.

9) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

10) Taxes on Income:

I. Current Tax Provision

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) eligible for set-off in subsequent years (as per tax laws), is recognized as on asset by way of credit to the Profit and Loss Account only if there is convincing evidence of its realization. At each Balance Sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realization.

II. Deferred Tax Provision

Deferred tax asset or liability is recognized for timing differences between the profit as per financial statements and the profit offered for income tax, based on tax rates that have been enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available, against which they can be realized.

11) Foreign Currency Transactions:

a) Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis reporting currency between the date of transaction and that of payment is charged to Profit & Loss Account.

b) Receivables / payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss, is accounted for in the Profit & Loss Account.

c) Increase / decrease in foreign currency loan on account of exchange fluctuation are debited / credited to Profit and Loss Account.

d) Impact of exchange fluctuation is separately disclosed in notes to accounts.

12) Employee Benefits:

Defined Contribution Plan

Contribution to provident fund and ESIC is accounted on accrual basis.

Defined Benefit Plan:

Gratuity liability is covered under the Gratuity-cum-lnsurance Policy of Life Insurance Corporation of India (LIC). The present value of the obligation is determined based on an actuarial valuation. Actuarial gains and losses arising on such valuation are recognized immediately in the Profit and Loss Account. The amount funded by the Trust administered by the Company under the aforesaid Policy, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.


Mar 31, 2010

1. Basis of Accounting

The financial statements are prepared under the historical cost convention on an accrual basis and in accordance with the applicable accounting standards and other relevant provisions of the Company Act, 1956.

2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principle (GAAP) requires estimates and assumptions that affect the reported amounts of income and expenses during the reported period and the reported amount of assets and liabilities on the date of the financial statements. Differences, if any, between actual results and estimates is recognized in the period in which the results are known.

3. Revenue Recognition

i) Revenue from sale of products is recognized when all the significant risks and rewards of ownership of the products are passed on to the customers, which is generally on dispatch of goods. The sales(Net) for the year are net of inter-unit transactions, excise duty and Value Added Tax. Accordingly, the purchases are also given net of inter-unit transactions.

ii) Revenue/Income and Cost/Expenditure are generally accounted on accruals, as they are earned or incurred, except in case of significant uncertainties.

iii) Liability for Excise duty and Custom duty payable on stock in bonded warehouse at the year-end is provided for.

iv) Dividend income is recognized when the right to receive the same is established.

v) Interest income is accrued over the period of loan/deposit/investment.

4. Fixed Assets

Fixed Assets are stated at cost (including other expenses related to acquisition and installation) less accumulated depreciation / amortization.

5. Impairment of Assets

The carrying amount of assets is reviewed at each Balance Sheet date if there is any indication of impairment based on internal and external factors.

An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss, if any, is charged to the Profit and Loss Account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior years, is recorded when there is an indication that impairment losses recognized for the asset no longer exists or has decreased.

6. Investments

Long -term investments are stated at cost. Provision is made for diminution, which are other than temporary, in the value of Investments.

7. Depreciation

i) Depreciation on Fixed Assets has been provided on straight-line method at the rates and in the manner specified in schedule XIV to the Companies Act, 1956, except in the case of leasehold land, which is amortised our the remaining period of lease.

ii) Assets like mobile phones, telephone instruments, etc. are fully write off in the year of purchase / acquisition.

8. Valuation of Inventories

Inventories are valued at lower of cost and estimated net realizable value except stores and spares which are valued at cost. The excise duty in respect of the closing inventory of finished goods is included as part of the finished goods. The cost formula used for determination cost is on the basis of First in First out.

9. Taxes on Income

I. Current Tax Provision

Provision for Current Tax is made on the basis of estimated taxable income for the current accounting year and in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) eligible for set-off in subsequent years (as per tax laws), is recognized as on asset by way ot credit to the Profit and Loss Account only if there is convincing evidence of its realization. At each Balance Sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realization.

II. Deferred Tax Provision

Deferred tax asset or liability is recognized for timing differences between the profit as per financial statements and the profit offered for income tax, based on tax rates that have been enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only if there is virtual certainty that sufficient future taxable income will be available, against which they can be realized.

10. Foreign Currency Transactions

The reporting currency of the Company is Indian Rupee.

(i) Foreign currency transactions during the year are recorded at the rates of exchange prevailing at the date of transaction-. Exchange gains or losses realized and arising due to translation of the foreign currency monetary items outstanding at the year end are accounted in the profit and loss account.

(ii) Forward Exchange Contracts: In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation purposes, premium or discounts are amortized as expense or income over the life of the contract. Exchange difference on such contracts is recognized in the profit and loss account in the year in which the exchange rate changes. Profit or loss arising on cancellation or renewal of such forward exchange contracts are recognized as income or as expense for the year.

11. Employee Benefits

Short Term Employee Benefits: All employee benefits payable within twelve months of rendering the service are recognized in the period in which the employee renders the related service.

Post Employment / Retirement Benefits: Contribution to Defined Contribution Plans such as Provident Fund etc., are charged to the Profit and Loss Account as incurred.

Defined Benefit Plan:

Gratuity: Gratuity liability is covered under the Gratuity-cum-lnsurance Policy of Life Insurance Corporation of India (LIC). The present value of the obligation is determined based on an actuarial valuation. Actuarial gains and losses arising on such valuation are recognized immediately in the Profit and Loss Account. The amount funded by the Trust administered by the Company under the aforesaid Policy, is reduced from the gross obligation under the defined benefit plan, to recognize the obligation on a net basis.

12. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed, while Contingent Assets are neither recognized nor disclosed, in the financial statements.

13. Segment Reporting

The company operates in two segments namely: I- Moulded Furniture II - Aluminium Composite Sheet. Segments have been identified and reported taking into account the nature of the product, the differential risk and return of the segment, the organizational structure and the internal financial reporting system.

 
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