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Accounting Policies of Purity Flex Pack Ltd. Company

Mar 31, 2015

A Basis of Preparation of Financial Statements

The financial statemants are prepared in accordance with indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprise mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014 and the provision of the Act (to the extent notified).Accounting policies have been consistently applied except where a newly issued Accounting Standard is intially adopted or a revision to an existing accounting standards requires a change in the accounting policy hitherto in use.

B Use of Estimates

The preparation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements, the reported amount of revenues and expenses during the reporting period and the disclousers relating to contingent liabilities as of the date of the financial statements. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes difference from the estimates. Difference between the actual results and estimates are recognised in the period in which the results are known or materialised.

Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

C Revenue Recognition

a) Sales

Sales and job work are recognized on shipment or dispatch to customer and are net of excise duty, VAT, trade discounts and returns if any.

b) Other Income

Other Income is recognized on accrual basis except when realisation of such income is uncertain.

Export incentives, insurance and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

D Fixed Assets

Fixed Assets are stated at cost, net of CENVAT credit, if any, after reducing accumulated depreciation until the date of the Balance Sheet. Direct cost are capitalized until the assets are ready for use and include financing costs relating to any borrowing attributable to acquisition. Capital work - in- progress includes the cost of fixed assets that are not yet ready for the intended use, advances paid to acquire fixed assets and the cost of assets not put to use before the balance sheet date.

E Method of Depreciation

a) Depreciation on fixed assets has been provided on Straight Line method over the useful life of the Asset.

b) Effective 1st April, 2014, the Company depreciates its fixed assets over the useful life in the manner prescribed in Schedule II of the Act, as against the earlier practise of depreciating at the retes prescribed in Schedule XIV of the Companies Act 1956.

c) Depreciation on additions to assets or on sale/discardment of assets, is calculated pro rata from the date of such addition / put to use or upto the date of such sale/discardment, as the case may be.

F Intangible Assets

Intangible assets are recognized as per the criteria specified in Accounting Standard (AS) 26 "Intangible Assets" issued by the Institute of Chartered Accountants of India and are amortized over their respective individual estimated useful lives on a straight line basis, commencing from the date the asset is available to the company for its use.

G Investments

Long Term Investments are stated at cost of acquisition, but in case of permanent diminution in value of long term investment, provision is made to recognise the decline.

H Foreign Exchange Transaction

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transactions. Foreign currency assets and liabilities are translated into Rupees at the rate of exchange prevailing on the date of the Balance Sheet. All exchange differences are dealt with in the statement of profit and loss, except those relating to the acquisition of fixed assets which are adjusted in the cost of the assets till it is ready for the intended use.

Exchange differences arising on account of rollover / cancellation of forward contracts are recognized as income / expense of the period in line with the movement in the underlying exposures.

I Inventories

All the items of Inventories are valued Lower of cost or net realisable value. The basis of determining cost for various categories of inventories is stated hereunder: -

a) Raw materials Lower of Cost / Net realisable value (FIFO)

b) Packing Materials . Lower of Cost / Net realisable value (FIFO)

c) Material in Transit Actual cost

d) Work in process Material cost plus appropriate share of Labor, Mfg overheads

e) Finished Goods Material cost plus appropriate share of Labor, Mfg overheads

f) Scrap At realisable value

g) Stores & others At cost

h) Cylinders At cost less amortization in case of old cylinders

J Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expense in the period in which they are incurred.

K Retiring Benefits

a) Provident Fund

Contribution to Provident Fund is made to Government / Recognized provident fund as required by the statutes / rules.

b) Gratuity

The Company has instituted a Group - cum - Life Insurance Scheme with the Life Insurance Corporation of India, so far as gratuity is concerned.

c) Leave Encashment

The benefit of encashment of the leave is given to the employees of the company during the year.

L Provision, Contingent Liabilities and Contingent Assets

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

M Taxes On Income

The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

N Prior Period Adjustments

All identifiable items of income and expenditure pertaining to prior period are accounted through "Prior Period Adjustments Account"

O Impairment Of Assets

The company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit & Loss Account. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

P Earnings per share

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

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

Q Cash and cash equivalent

Cash and cash equivalents for the purposes of financial statement includes cash in hand, Balances with Banks and Fixed deposits with banks.

R Government Grants and Subsidies

a) Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached thereto and that the grants will be received.

b) Capital Government Grants or Subsidies relating to specific fixed assets are deducted from the gross value of the respective fixed assets and other capital grants are credited to Capital Reserve.

c) Other Government Grants or Subsidies relating to an expense item are recognised as income over the period to match them on a systematic basis to the costs or deducted from related expenses.

S Current / Non-Current

All assets and liabilities are presented as Current or Non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation, the Company has ascertained its operating cycle as 12 months for the purpose of Current / Non current classification of assets and liabilities.


Mar 31, 2014

A. Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on accrual basis of accounting and in accordance with applicable Accounting Standards and relevant presentational requirement of the Companies Act, 1956 read with the General Circular 8/2014 dated 4th April, 2014 issued by Ministry of Companies Affairs regarding various Provisions/Schedules/Rules.

B. Use of Estimates

The preparation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements, the reported amount of revenues and expenses during the reporting period and the disclosures relating to contingent liabilities as of the date of the financial statements. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes difference from the estimates. Difference between the actual results and estimates are recognised in the period in which the results are known or materialised.

Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

C. Revenue Recognition

a) Sales

Sales and job work are recognized on shipment or dispatch to customer and are net of excise duty, VAT, trade discounts and returns if any.

b) Other Income

Other Income is recognized on accrual basis except when realisation of such income is uncertain.

Export incentives, insurance and other claims, where quantum of accruals cannot be ascertained with reasonable certainty, are accounted on acceptance basis.

D. Fixed Assets

Fixed Assets are stated at cost, net of CENVAT credit, if any, after reducing accumulated depreciation until the date of the Balance Sheet. Direct cost are capitalized until the assets are ready for use and include financing costs relating to any borrowing attributable to acquisition. Capital work-in-progress includes the cost of fixed assets that are not yet ready for the intended use, advances paid to acquire fixed assets and the cost of assets not put to use before the balance sheet date.

Depreciation on fixed assets has been provided on Straight Line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on additions to the Fixed Assets are provided on pro-rata basis from the date of put to use.

E. Intangible Assets

Intangible assets are recognized as per the criteria specified in Accounting Standard (AS) 26 "Intangible Assets" issued by the Institute of Chartered Accountants of India and are amortized over their respective individual estimated useful lives on a straight line basis, commencing from the date the asset is available to the company for its use.

F. Investments

Long Term Investments are stated at cost of acquisition, but in case of permanent diminution in value of long term investment, provision is made to recognise the decline.

G. Foreign Exchange Transaction

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transactions. Foreign currency assets and liabilities are translated into Rupees at the rate of exchange prevailing on the date of the Balance Sheet. All exchange differences are dealt with in the statement of profit and loss, except those relating to the acquisition of fixed assets which are adjusted in the cost of the assets till it is ready for the intended use.

Exchange differences arising on account of rollover/cancellation of forward contracts are recognized as income/expense of the period in line with the movement in the underlying exposures.

H. Inventories

All the items of Inventories are valued Lower of cost or net realisable value. The basis of determining cost for various categories of inventories is stated hereunder:-

a) Raw materials : Lower of Cost/Net realisable value (FIFO)

b) Packing Materials : Lower of Cost/Net realisable value (FIFO)

c) Material in Transit : Actual cost

d) Work in process : Material cost plus appropriate share of Labor, Mfg overheads

e) Finished Goods : Material cost plus appropriate share of Labor, Mfg overheads

f) Scrap : At realisable value

g) Stores & others : At cost

h) Cylinders : At cost less amortization in case of old cylinders

I. Borrowing Costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expense in the period in which they are incurred.

J. Retiring Benefits

a) Provident Fund

Contribution to Provident Fund is made to Government/Recognized provident fund as required by the statutes/rules.

b) Gratuity

The Company has instituted a Group-cum-Life Insurance Scheme with the Life Insurance Corporation of India, so far as gratuity is concerned.

c) Leave Encashment

The benefit of encashment of the leave is given to the employees of the company during the year.

K. Provision, Contingent Liabilities and Contingent Assets

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

L. Taxes On Income

The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

M. Prior Period Adjustments

All identifiable items of income and expenditure pertaining to prior period are accounted through "Prior Period Adjustments Account".

N. Impairment Of Assets

The company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit & Loss Account. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

O. Earnings per share

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

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

P. Cash and cash equivalent

Cash and cash equivalents for the purposes of financial statement includes cash in hand, Balances with Banks and Fixed deposits with banks.

Q. Government Grants and Subsidies

a) Government grants and subsidies are recognised when there is reasonable assurance that the Company will comply with the conditions attached thereto and that the grants will be received.

b) Capital Government Grants or Subsidies relating to specific fixed assets are deducted from the gross value of the respective fixed assets and other capital grants are credited to Capital Reserve.

c) Other Government Grants or Subsidies relating to an expense item are recognised as income over the period to match them on a systematic basis to the costs or deducted from related expenses.

R. Current/Non-Current

All assets and liabilities are presented as Current or Non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation, the Company has ascertained its operating cycle as 12 months for the purpose of Current/Non current classification of assets and liabilities.


Mar 31, 2011

BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost convention on accrual basis of accounting and in accordance with applicable Accounting Standards and relevant presentational requirement of the Companies Act, 1956.

2 REVENUE RECOGNITION

a) Sales

Sales are recongnised on shipment or dispatch to customer and are inclusive of income from job work, excise duty and VAT, net of trade discounts and returns

b) Other Income

Other Income is recongnised on accrual basis except when realisation of such income is uncertain.

Claims lodged with the Insurance Company in respect of risks covered are accounted for as and when admitted by the Insurance Company

3 FIXED ASSETS

Fixed Assets are stated at cost, net of CENVAT credit, if any, after reducing accumulated depreciation until the date of the Balance Sheet. Direct cost are capitalized until the assets are ready for use and include financing costs relating to any borrowing attributable to acquisition. Capital work - in- progress includes the cost of fixed assets that are not yet ready for the intended use, advances paid to acquire fixed assets and the cost of assets not put to use before the balance sheet date

Depreciation on fixed assets has been provided on Straight Line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on additions to the Fixed Assets are provided on pro-rata basis from the succeeding month in which put to use.

4 INVESTMENTS

Long Term Investments are stated at cost of acquisition, but in case of permanent diminution in value of long term

investment, provision is made to recognise the decline.

5 INVENTORIES

All the items of Inventories are valued Lower of cost or net realizable value. The basis of determining cost for various categories of inventories is stated here under:-

a) Raw materials Lower of Cost / Net realisable value First in First out basis

b) Packing Materials Lower of Cost / Net realisable value First in First out basis

c) Material in Transit Actual cost

d) Work in process Material cost plus appropriate share of Labour, Mfg overheads

e) Finished Goods Material cost plus appropriate share of Labour, Mfg overheads

f) Scrap At realisable value

g) Stores & others At cost

h) Cylinders At cost less amortization in case of old cylinders

6 BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expense in the period in which they are incurred,

7 INTANGIBLE ASSETS

Intangible assets are recognized as per the criteria specified in Accounting Standard (AS) 26 "Intangible Assets" issued by the Institute of Chartered Accountants of India and are amortized over their respective individual estimated useful lives on a straight line basis, commencing from the date the asset is available to the company for its use.

8 RETIRING BENEFITS

a) Provident Fund

Contribution to Provident Fund is made to Government / Recognized provident fund as required by the statutes / rules.

b) Gratuity

Liability with regard to gratuity has been determined by actuarial valuation as at the balance sheet date. The company contributes to the group gratuity plan of LIC of India. The same Is accounted on cash basis.

c) Leave Encashment

The company extends the benefit of encashment of leave to it's' employees while in service as well as on retirement basis. The encashment of leave while in service, being at the option of employees Is being accounted on cash basis.

9 FOREIGN EXCHANGE TRANSACTION

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transactions. Foreign currency essets and liabilities are translated into Rupees at the rate of exchange prevailing on the date of the Balance Sheet. All exchange differences are dealt with in the statement of profit and loss, except those relating to the acquisition of fixed assets which are adjusted in the cost of the assets.

10 CONTINGENT LIABILITIES

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

11 TAXES ON INCOME

The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

12 PRIOR PERIOD ADJUSTMENTS

All identifiable items of income and expenditure pertaining to prior period are accounted through "Prior Period Adjustments Account"

13 IMPAIRMENT OF ASSETS

The company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit & Loss Account. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.


Mar 31, 2010

1 BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost convention on accrual basis of accounting and in accordance with applicable Accounting Standards and relevant presentational requirement of the Companies Act, 1956.

2 REVENUE RECOGNITION

a) Sales

Sales are recongnised on shipment or dispatch to customer and are inclusive of income from job work, excise duty and VAT, net of trade discounts and returns

b) Other Income

Other income is recongnised on accrual basis except when realisation of such income 8s uncertain.Claims lodged with the Insurance Company in respect of risks covered are accounted for as and when admitted by the Insurance Company

3 FiXED ASSETS

Fixed Assets are stated at cost, net of GENVAT credit, if any, after reducing accumulated depreciation until the date of the Balance Sheet. Direct cost are capitalized until the assets are ready for use and include financing costs relating to any borrowing attributable to acquisition. Capital work - in- progress includes the cost of fixed assets that are not yet ready for the intended use, advances paid to acquire fixed assets and the cost of assets not put to use before the balance sheet date.

Depreciation on fixed assets has been provided on Straight Line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on additions to the Fixed Assets are provided on pro-rata basis from the succeeding month in which put to use.

4 INVESTMENTS

Long Term Investments are stated at cost of acquisition, but in case of permanent diminution In value of long term investment, provision is made to recognise the decline.

5 INVENTORIES

All the items of Inventories are valued Lower of cost or net realizable value. The basis of determining cost for various categories of inventories is stated hereunder:-

a) Raw materials Lower of Cost / Net realisable value First in First out basis

b) Packing Materials Lower of Cost / Net realisable value First in First out basis

c) Material in Transit Actual cost

d) Work in process Material cost plus appropriate share of Labour, Mfg overheads

e) Finished Goods Material cost plus appropriate share of Labour, Mfg overheads

f) Scrap At realisable value

g) Stores & others At cost

h) Cylinders At cost less amortization in case of old cylinders

6 BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as expense in the period In which they are incurred.

7 INTANGIBLE ASSETS

Intangible assets are recognized as per the criteria specified in Accounting Standard (AS) 26 Intangible Assets" issued by the Institute of Chartered Accountants of India and are amortized over their respective individual estimated useful lives on a straight line basis, commencing from the date the asset is available to the company for its use.

8 RETIRING BENEFITS

a) Provident Fund

Contribution to Provident Fund is made to Government / Recognized provident fund as required by the statutes / rules.

b) Gratuity

Liability with regard to gratuity has been determined by actuarial valuation as at the balance sheet date. The company contributes to the group gratuity plan of LIC of India. The same is accounted on cash basis.

c) Leave Encashment

The company extends the benefit of encashment of leave to its employees while in service as well as on retirement basis. The encashment of leave while in service, being at the option of employees is being accounted on cash basis.

9 FOREIGN EXCHANGE TRANSACTION

Foreign currency transactions during the year are recorded at rates of exchange prevailing on the date of transactions. Foreign currency assets and liabilities are translated into Rupees at the rate of exchange prevailing on the date of the Balance Sheet. All exchange differences are dealt with in the statement of profit and loss, except those relating to the acquisition of fixed assets which are adjusted in the cost of the assets.

10 CONTINGENT LIABILITIES

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

11 TAXES ON INCOME

The provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income-tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

12 PRIOR PERIOD ADJUSTMENTS

All identifiable items of income and expenditure pertaining to prior period are accounted through "Prior Period Adjustments Account"

13 IMPAIRMENT OF ASSETS

The company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit & Loss Account. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

 
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