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Accounting Policies of Sanco Industries Ltd. Company

Mar 31, 2015

I. Corporate Information: Sanco Industries Limited (the 'Company') is engaged in manufacturing & Trading of PVC Resin, PVC Compound, PVC Pipe & Profiles and Wire & Cables, Chemicals etc. Registered office of the Company is in the state of Delhi. The Company has manufacturing facilities in the State of Himachal Pradesh. The products of the Company are mainly sold in India.

II. Summary of Significant Accounting Policies

IIA. Basis of Accounting and Preparation of Financial Statements:

The financial statements are prepared under the historical cost convention on accrual basis and in accordance with the applicable mandatory Accounting Standards.

Accrual method of accounting is followed with regard to Income & Expenses except ROC Fees on Payment basis.

IIB. Fixed Assets:

Tangible Fixed Assets:

Fixed assets are stated at cost (Including other expenses related to acquisition and installation and other directly attributable cost of bringing the assets to their working condition for intended use) less accumulated depreciation till the end of the Financial Year.

Intangible Fixed Assets:

Internally generated intangible asset arising from development activity are recognized only on demonstration of its technical feasibility, the intention and ability of the company to complete, use or sell it. The intangible assets are recorded at cost and are carried at cost less accumulated amortization.

Capital Work in Progress:

Capital work in progress includes cost of equipments and other expenses incidental to its acquisition which are not ready for use.

IIC Depreciation:

Depreciation on Fixed Assets is provided at the Straight Line Method rates prescribed in Schedule II to the companies Act, 2013.

IID Investments:

Long term investments are carried at cost after providing for any diminution in value, if such diminution is of a permanent nature.

Current investments are carried at lower of cost and market value.

IIE Inventories:

Inventories are valued as follows:

Raw Materials, components, stores and spares: At cost, cost is determined on FIFO basis.

Finished goods : Lower of cost and net realizable value.

IIF Revenue Recognition Sale of Goods:

Revenue from sales of goods is recognized when risk and rewards in respect of the ownership of the goods are transferred to the customers.

Interest:

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

IIG Borrowing Cost:

Borrowing cost includes Interest, ancillary costs incurred in connection with the arrangements of borrowings and exchange difference arising from foreign currency borrowings to the extent they are regarded as adjustment to the Interest Cost.

Interest and other financing costs relating to borrowed funds attributable to the construction or acquisition of fixed assets have been capitalized to the extent if they relate to the period up to which the asset was ready to use (As per AS-16). All other borrowing costs are charged to the statement of Profit & Loss.

IIH Employee Benefits:

The Company's contribution to Provident Fund is charged to Profit & Loss account. Contribution to Gratuity Fund and Provision for Leave Encashment are made on the estimated basis and charged to Profit & Loss Account. As the management has decided to make such payment out of own funds based on the assumption that such benefits are payable to its employees at the end of the each accounting year.

III Taxes on Income:

Provision for Income Tax comprises of current tax, deferred tax charge or release. Current Tax provisions are made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions as per Income Tax Act, 1961. The provision for the tax is adjusted for Minimum Alternate Tax (MAT) paid in earlier years.

Deferred Tax resulting from "timing difference" between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be adjusted in future.

IIJ Segment Accounting and reporting:

Segment accounting and reporting which is done in accordance with the accounting policies of the company and the guidelines prescribed by Accounting Standard 17, Segment Reporting, as specified in the Companies (Accounting Standards) Rules, 2006 is as follows:

i) Segment revenue includes sales and other income directly identifiable with/ allocable to the segment including inter-segment revenue.

ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result.

iii) Segment assets and liabilities include those directly identifiable with respective segments.

IIK Foreign currency transactions:

a) The reporting currency of the Company is Indian Rupee.

b) Foreign currency transactions are recorded on initial recognition in the reporting currency using the exchange rates prevailing at the date of the transaction.

c) Foreign Exchange differences on settlement/conversion are included in the statement of Profit and loss in the period in which they arise.

d) Basis of conversion of Foreign Currency in each of subsidiary companies.

IIL Cash and Cash Equivalent:

Cash and Cash equivalents for the purpose of cash flow comprise of cash at bank and cash in hand and short term investments/ bank deposits.

IIM Provisions, contingent liabilities and contingent assets:

a) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

i) the company has a present obligation as a result of a past event.

ii) a probable outflow of resources is expected to settle the obligation and

iii) the amount of the obligation can be reliably estimated.

b) Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and updated/ recognized as appropriate.


Mar 31, 2014

1 A Basis of Accounting and Preparation of Financial Statements:

''The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under section 211 (3C) Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or noncurrent as per the company''s normal operating cycle and other criteria set out in the Schedule VI to the companiesAct, 1956.

Accrual method of accounting is followed with regard to Income & Exp except ROC Fees on Payment basis.

1B. FixedAssets:

Tangible Fixed Assets:

Fixed assets will be stated at cost (net of Cenvat, wherever applicable and including other expenses related to acquisition and installation and other directly attributable cost of bringing the assets to their working condition for intended use) less accumulated depreciation till the end of the Financial Year.

Intangible Fixed Assets:

Internally generated intangible asset arising from development activity are recognized only on demonstration of its technical feasibility, the intention and ability of the company to complete, use or sell it. The intangible assets are recorded at cost and are carried at cost less accumulated amortization.

Capital Workin Progress:

Capital work in progress includes cost of equipments and other expenses incidental to its acquisition which are not ready for use.

1C. Depreciation:

Depreciation on FixedAssets is provided on Written down value method at the rate and in accordancewith Schedule XIVtothe CompaniesAct, 1956onPro-rata basis.

1D. Investments:

Long term investments are carried at cost after providing for any diminution in value, if such diminution is of a permanent nature.

Current investments are carriedat lower of costand market value.

1E. Inventories:

Inventories are valued asfollows:

Raw Materials, components, stores and spares: At cost, cost is determined on FIFO basis.

Finished Goods : Lowerofcost and net realizable value.

1F Revenue Recognition Sale of Goods:

Revenue from sales of goods is recognized when risk and rewards in respect of the owner ship of the goods are transferred to the customers.

Interest:

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

1G BorrowingCost:

Borrowing cost includes Interest, ancillary costs incurred in connection with the arrangements of borrowings and exchange difference arising from foreign currency borrowings to the extent they are regarded as adjustment to the Interest Cost.

Interest and other financing costs relating to borrowed funds attributable to the construction or acquisition of fixed assets have been capitalized to the extent if they relate to the period up to which the asset was ready to use (As per AS-16). All other borrowing costs are charged to the statement of Profit & Loss.

1H. Employee Benefits:

Leave Encashment

Provision for Leave Encashment has been made periodically by the company.

Provident Fund

Provident fund is a defined contribution scheme (Government Scheme) and the contributions are charged to the Statement of Profit & Loss of the year when the contributions to the respective funds are due.

Gratuity

Provision for gratuity has been made periodically by the company.

1I. Earnings per share:

''Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares).

Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits /reverse share splits and bonus shares, as appropriate.

1J. Taxes on Income:

Provision for Income Tax comprises of current tax, deferred tax charge or release. Current Tax provisions are made on the basis ofestimated taxable income for the current accounting period and in accordance with the provisions as per Income Tax Act, 1961. The provision for the tax is adjusted for Minimum Alternate Tax (MAT) paid in earlier years.

Deferred Tax resulting from "timing difference" between book and taxable profit for the yearisaccounted for using the tax rates and laws that have been enactedorsubstantially enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be adjusted in future.

1K. Segment Accounting and reporting:

Segment accounting and reporting which is done in accordance with the accounting policies of the company and the guidelines prescribed by Accounting Standard 17, Segment Reporting, as specified in the Companies (Accounting Standards) Rules, 2006 is as follows: i) Segment revenue includes sales and other income directly identifiable with/ allocable to the segment including inter-segment revenue. ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. iii) Segment assets and liabilities include those directly identifiable with respective segments.

1L. Foreign currency transactions:

a) The reporting currency of the Company is Indian Rupee.

b) Foreign currency transactions are recorded on initial recognition in the reporting currency using the exchange rates prevailing at the date of the transaction.

c) Foreign Exchange differences on settlement/conversion are included in the statement of Profit and loss in the period in which they arise.

1M. Cash and Cash Equivalent:

Cash and Cash equivalents for the purpose of cash flow comprise of cash at bank and cashinhand andshort term investments/ bankdeposits.

1N. Provisions, contingent liabilities and contingent assets:

a) Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

i) the company has apresent obligation as a result of a past event.

ii) a probable outflow of resources is expected to settle the obligation and

iii) the amount of the obligation can be reliably estimated.

b) Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date and updated/ recognized as appropriate.

Note Particulars Figures for the current Figures for the previous

No reporting period reporting period

 
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