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Accounting Policies of Sonal Adhesives Ltd. Company

Mar 31, 2015

1. Nature of business

1.1 The Company is in the business of manufacturing adhesive tapes and plastic ropes. The manufacturing facility of the Company is situated at Khopoli and its registered office is situated in Andheri (West), Mumbai. The Company exports its products through its associate companies.

2.1. Accounting convention

The financial statements of the Company are prepared under historical cost convention on an accrual basis and comply with the Accounting Standards ('AS') notifed by the Companies (Accounting Standards) Rules, 2006 except otherwise mentioned elsewhere in the financial statements.

2.2. Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities, if any) as at the date of the financial statements and the reported income and expenses during the reporting period like provisioning for taxation, useful lives of assets etc. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

2.3. Revenue Recognition

On sale of goods

Sales of the Company comprise sale of BOPP tapes, ropes and adhesives. Revenue is recognized when the risks and rewards are substantially transferred to the buyer. This usually occurs when the goods leave the premises of the Company. The Company collects sales taxes and value added taxes (VAT) on behalf of the Government and, therefore, these are not economic benefits flowing to the Company. Hence they are excluded from Revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year. Excise duty (including education cess) in respect of fished goods is shown separately as an item of expense and included in the valuation of fished goods.

Interest income

Interest income is recognized on accrual basis.

2.4. Expenses and incomes

Expenses and incomes are accounted for on accrual basis except for bonus to employees. Bonus to employees is accounted for on payment basis. Provisions are made for all known liabilities.

2.5. Fixed Assets and Depreciation

Tangible assets are stated at cost, less accumulated depreciation and impairment, if any.

Cost includes the purchase price (excluding refundable taxes) and expenses directly attributable to bring the asset to the location and condition for its intended use. Examples of directly attributable expenses included in the acquisition cost are delivery and handling costs, installation, legal services and consultancy services.

Fixed assets are depreciated on Straight Line Method ('SLM') based on the useful lives prescribed under Part C of Schedule II of Companies Act, 2013.

Land is not depreciated since it is deemed to have an indefinite economic life. Depreciation is charged on a pro – rata basis on additions made during the year.

Assets costing below Rs 5000 are charged to the Statement of Profit and Loss in the year of purchase.

2.6. Foreign exchange transactions

Initial recognition

Transactions in foreign currency are booked at standard rates determined periodically, which approximate the actual rates.

Translation

Cash and bank balances, receivables and liabilities (monetary items) in foreign currencies as at the yearend are revalued at year end rates and the unrealized translation differences are included in the Statement of Profit or Loss.

Gain or loss on acquisition of fixed assets

Gain / loss arising out of fluctuations on realization / payment or restatement, except those identifiable to acquisition of fixed assets is charged / credited to the Statement of Profit or Loss. Gain / loss on account of exchange fluctuations identifiable to fixed assets acquired are adjusted against the carrying value of the related fixed asset.

2.7. Inventory

Raw materials, consumable and packing materials, semi fished goods and fished goods are valued at cost or net realizable value, whichever is lower.

Cost includes freight, taxes and duties (other than those subsequently recoverable from the tax authorities) and all other expenses incurred on bringing the inventory to its present location and condition.

Inventory is valued on weighted average basis.

Cenvat credit for materials purchased for production is taken into account at the time of purchases. Cenvat credit on purchases of capital items wherever applicable is recognized when the asset is purchased. The Cenvat credit so taken is utilized for the payment of excise duty on goods manufactured. The unutilized Cenvat credit is carried forward in the financial statements.

2.8. Segment reporting

The Company is primarily engaged in manufacture of Ropes and BOPP tapes.

Although these two businesses represent separate business segments, Accounting Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable to the Company.

2.10 Taxes on income

- Income tax is computed in accordance with Accounting Standard 22 – 'Accounting for Taxes on Income' ('AS – 22'), notifed by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted in the same period to which the revenue and expenses relate.

- Deferred tax assets, other than unabsorbed depreciation or carried forward losses, are recognized only if there is reasonable certainty that they will be realized in the future and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

2.11 Provisions and Contingencies

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

Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized but are disclosed in the notes to the financial statements unless the possibility of an outflow of resources embodying economic benefit is remote. A contingent asset is neither recognized nor disclosed.

The contingent liabilities as at the Balance Sheet date are disclosed as under:

- The Company has other contingent liabilities in the form of guarantees extended from time to time, details of which are maintained by the Company as per the prescribed standards.

- The Company has given guarantee in favor of Sonal Impex Limited to enable Sonal Impex Limited avail credit facilities with banks. The Company is contingently liable to that extent.

The Company is in the process of filing an appeal and contesting the demand raised by the above order of the tax authorities and the Management including its consultants and advisors believe that its position will likely be upheld in the appellate process.

The Management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

2.12 Previous year figures have been regrouped wherever necessary so as to enable comparison with the figures of the current year.

- Claims not acknowledged as debts: Rs 0.45 lakhs

- Demands raised by the sales tax authorities, Maharashtra for financial year 2010 – 2011

The above fees are exclusive of service tax.

The company takes credit for the service tax on the above payment.

3.2 Dues to Micro Small and Medium Enterprises

The Company has not received any intimation from its suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, the disclosures, if any, relating to the amounts unpaid as at 31 Mar 2015 together with the interest paid / payable as required under the said Act have not been given.


Mar 31, 2014

1.1. Accounting convention

The financial statements of the Company are prepared under historical cost convention on an accrual basis and comply with the Accounting Standards (''AS'') notified by the Companies (Accounting Standards) Rules, 2006 except otherwise mentioned elsewhere in the financial statements.

1.2. Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities, if any) as at the date of the financial statements and the reported income and expenses during the reporting period like provisioning for taxation, useful lives of assets etc. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

1.3. Revenue Recognition

On sale of goods

Sales of the Company comprise sale of BOPP tapes, ropes and adhesives. Revenue is recognized when the risks and rewards are substantially transferred to the buyer. This usually occurs when the goods leave the premises of the Company.

Interest income

Interest income is recognized on accrual basis.

1.4. Expenses and incomes

Expenses and incomes are accounted for on accrual basis except for bonus to employees. Bonus to employees is accounted for on payment basis. Provisions are made for all known liabilities.

1.5. Fixed Assets and Depreciation

Fixed assets acquired by the Company are reported at acquisition value with deductions for accumulated depreciation and impairment losses, if any.

The acquisition cost includes the purchase price (excluding refundable taxes) and expenses directly attributable to bring the asset to the location and condition for its intended use. Examples of directly attributable expenses included in the acquisition cost are delivery and handling costs, installation, legal services and consultancy services.

Fixed assets are depreciated on Straight Line Method (''SLM'') at the rates prescribed by Schedule XIV of the Companies Act, 1956, unless the use of a higher rate or an accelerated charge is justified through technical estimates.

Land is not depreciated since it is deemed to have an indefinite economic life. Depreciation is charged on a pro - rata basis on additions made during the year.

Assets costing below Rs 5000 are charged to the Statement of Profit and Loss in the year of purchase.

1.6. Foreign exchange transactions

Initial recognition

Transactions in foreign currency are booked at standard rates determined periodically, which approximate the actual rates.

Translation

Cash and bank balances, receivables and liabilities (monetary items) in foreign currencies as at the year end are revalued at year end rates and the unrealized translation differences are included in the Statement of Profit or Loss.

Gain or loss on acquisition of fixed assets

Gain / loss arising out of fluctuations on realization / payment or restatement, except those identifiable to acquisition of fixed assets is charged / credited to the Statement of Profit or Loss. Gain / loss on account of exchange fluctuations identifiable to fixed assets acquired are adjusted against the carrying value of the related fixed asset.

1.7. Inventory

Raw materials, consumable and packing materials, semi finished goods and finished goods are valued at cost or net realizable value, whichever is lower.

Cost includes freight, taxes and duties (other than those subsequently recoverable from the tax authorities) and all other expenses incurred on bringing the inventory to its present location and condition.

Inventory is valued on weighted average basis.

Cenvat credit for materials purchased for production is taken into account at the time of purchases. Cenvat credit on purchases of capital items wherever applicable is recognized when the asset is purchased. The Cenvat credit so taken is utilized for the payment of excise duty on goods manufactured. The unutilized Cenvat credit is carried forward in the financial statements.

1.8. Segment reporting

The Company is primarily engaged in manufacture of Ropes and BOPP tapes.

Although these two businesses represent separate business segments, Accounting Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable to the Company.

1.9 Taxes on income

* Income tax is computed in accordance with Accounting Standard 22 - ''Accounting for Taxes on Income'' (''AS - 22''), notified by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted in the same period to which the revenue and expenses relate.

* Deferred tax assets, other than unabsorbed depreciation or carried forward losses, are recognized only if there is reasonable certainty that they will be realized in the future and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

1.10 Provisions and Contingencies

A provision is recognized when the Company has a present obligation as a result of 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.

Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized but are disclosed in the notes to the financial statements unless the possibility of an outflow of resources embodying economic benefit is remote.

A contingent asset is neither recognized nor disclosed.

The contingent liabilities as at the Balance Sheet date are disclosed as under:

* Income Tax demand for Rs. 5.64 lakhs has been raised by the Assessing officer for the AY 1995 - 96. The Company has disputed the demand and preferred an appeal before Income Tax (Tribunal). The Company is not aware of the outcome of the appeal. We are therefore, unable to comment on the matter.

* The Company has given guarantee in favour of Sonal Impex Limited to enable Sonal Impex Limited avail credit facilities with banks. The Company is contingently liable to that extent.

* Claims not acknowledged as debts: Rs 0.45 lakhs

1.11 Previous year figures have been regrouped wherever necessary so as to enable comparison with the figures of the current year.


Mar 31, 2013

1.1. Accounting convention

The financial statements of the Company are prepared under historical cost convention on an accrual basis and comply with the Accounting Standards (''AS'') notified by the Companies (Accounting Standards) Rules, 2006 except otherwise mentioned elsewhere in the financial statements.

1.2. Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities, if any) as at the date of the financial statements and the reported income and expenses during the reporting period like provisioning for taxation, useful lives of assets etc. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

1.3. Revenue Recognition On sale of goods

Sales of the Company comprise sale of BOPP tapes, ropes and adhesives. Revenue is recognized when the risks and rewards are substantially transferred to the buyer. This usually occurs when the goods leave the premises of the Company.

Interest income

Interest income is recognized on accrual basis.

1.4. Expenses and incomes

Expenses and incomes are accounted for on accrual basis except for bonus to employees. Bonus to employees is accounted for on payment basis. Provisions are made for all known liabilities.

1.5. Fixed Assets and Depreciation

Fixed assets acquired by the Company are reported at acquisition value with deductions for accumulated depreciation and impairment losses, if any.

The acquisition cost includes the purchase price (excluding refundable taxes) and expenses directly attributable to bring the asset to the location and condition for its intended use. Examples of directly attributable expenses included in the acquisition cost are delivery and handling costs, installation, legal services and consultancy services.

Fixed assets are depreciated on Straight Line Method (''SLM'') at the rates prescribed by Schedule XIV of the Companies Act, 1956, unless the use of a higher rate or an accelerated charge is justified through technical estimates.

Land is not depreciated since it is deemed to have an indefinite economic life. Depreciation is charged on a pro – rata basis on additions made during the year.

Assets costing below Rs 5000 are charged to the Statement of Profit and Loss in the year of purchase.

1.6. Foreign exchange transactions Initial recognition

Transactions in foreign currency are booked at standard rates determined periodically, which approximate the actual rates.

Translation

Cash and bank balances, receivables and liabilities (monetary items) in foreign currencies as at the yearend are revalued at year end rates and the unrealized translation differences are included in the Statement of Profit and Loss.

Gain or loss on acquisition of fixed assets

Gain / loss arising out of fluctuations on realization / payment or restatement, except those identifiable to acquisition of fixed assets is charged / credited to the Statement of Profit and Loss. Gain / loss on account of exchange fluctuations identifiable to fixed assets acquired are adjusted against the carrying value of the related fixed asset.

1.7. Inventory

Raw materials, consumable and packing materials, semi finished goods and finished goods are valued at cost or net realizable value, whichever is lower.

Cost includes freight, taxes and duties (other than those subsequently recoverable from the tax authorities) and all other expenses incurred on bringing the inventory to its present location and condition.

Inventory is valued on weighted average basis.

Convert credit for materials purchased for production is taken into account at the time of purchases. Convert credit on purchases of capital items wherever applicable is recognized when the asset is purchased. The Convert credit so taken is utilized for the payment of excise duty on goods manufactured. The unutilized Convert credit is carried forward in the financial statements.

1.8. Segment reporting

The Company is primarily engaged in manufacture of Ropes and BOPP tapes.

Although these two businesses represent separate business segments, Accounting Standard 17 – "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable to the Company.

1.9 Taxes on income

- Income tax is computed in accordance with Accounting Standard 22 – ''Accounting for Taxes on Income'' (''AS – 22''), notified by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted in the same period to which the revenue and expenses relate.

- Deferred tax assets, other than unabsorbed depreciation or carried forward losses, are recognized only if there is reasonable certainty that they will be realized in the future and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

1.10 Provisions and Contingencies

A provision is recognized when the Company has a present obligation as a result of 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.

Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized but are disclosed in the notes to the financial statements unless the possibility of an outflow of resources embodying economic benefit is remote.

A contingent asset is neither recognized nor disclosed.

The contingent liabilities as at the Balance Sheet date are disclosed as under:

- Income Tax demand for Rs. 5.64 lakhs has been raised by the Assessing officer for the AY 1995 - 96. The Company has disputed the demand and preferred an appeal before Income Tax (Tribunal). The Company is not aware of the outcome of the appeal. We are therefore, unable to comment on the matter.

- The Company has given guarantee in favor of Sonal Impex Limited to enable Sonal Impex Limited avail credit facilities with banks.

- Claims not acknowledged as debts: Rs 0.45 lakhs

1.11 Previous year figures have been regrouped wherever necessary so as to enable comparison with the figures of the current year.


Mar 31, 2012

1.1. Accounting convention

The financial statements of the Company are prepared under historical cost convention on an accrual basis and comply with the Accounting Standards ('AS') notified by the Companies (Accounting Standards) Rules, 2006 except otherwise mentioned elsewhere in the financial statements.

1.2. Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities, if any) as at the date of the financial statements and the reported income and expenses during the reporting period like provisioning for taxation, useful lives of assets etc. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

1.3. Revenue Recognition

On sale of goods

Sales of the Company comprise sale of BOPP tapes, ropes and adhesives. Revenue is recognized when the risks and rewards are substantially transferred to the buyer. This usually occurs when the goods leave the premises of the Company.

Interest income

Interest income is recognized on accrual basis.

1.4. Expenses and incomes

Expenses and incomes are accounted for on accrual basis except for bonus to employees. Bonus to employees is accounted for on payment basis. Provisions are made for all known liabilities.

1.5. Fixed Assets and Depreciation

Fixed assets acquired by the Company are reported at acquisition value with deductions for accumulated depreciation.

The acquisition cost includes the purchase price, taxes (which are not subsequently recoverable from the tax authorities), duties, freight and incidental expenses related to the acquisition and installation of the asset. Examples of incidental expenses are delivery and handling costs and installation services.

Fixed assets are depreciated on Straight Line Method ('SLM') at the rates prescribed by Schedule XIV of the Companies Act, 1956. Depreciation is charged on a prorata basis on additions made during the year. Assets costing below Rs. 5000 are expensed out in the year of purchase.

1.6. Foreign exchange transactions

Initial recognition

Transactions in foreign currency are booked at standard rates determined periodically, which approximate the actual rates.

Translation

Cash and bank balances, receivables and liabilities (monetary items) in foreign currencies as at the year end are revalued at year end rates and the unrealized translation differences are included in the Statement of Profit and Loss.

Gain or loss on acquisition of fixed assets

Gain/loss arising out of fluctuations on realization/payment or restatement, except those identifiable to acquisition of fixed assets is charged/credited to the Statement of Profit and Loss. Gain/loss on account of exchange fluctuations identifiable to fixed assets acquired are adjusted against the carrying value of the related fixed asset.

1.7. Inventory

Raw materials, consumable and packing materials, semi finished goods and finished goods are valued at cost or net realizable value, whichever is lower.

Cost includes freight, taxes and duties (other than those subsequently recoverable from the tax authorities) and all other expenses incurred on bringing the inventory to its present location and condition.

Inventory is valued on weighted average basis.

Cenvat credit for materials purchased for production is taken into account at the time of purchases. Cenvat credit on purchases of capital items wherever applicable is recognized when the asset is purchased. The Cenvat credit so taken is utilized for the payment of excise duty on goods manufactured. The unutilized Cenvat credit is carried forward in the financial statements.

1.8. Segment reporting

The Company is primarily engaged in manufacture of Ropes and BOPP tapes.

Although these two businesses represent separate business segments, Accounting Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable to the Company.

1.9 Taxes on income

Income tax is computed in accordance with Accounting Standard 22 - 'Accounting for Taxes on Income' ('AS - 22'), notified by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted in the same period to which the revenue and expenses relate.

Deferred tax assets, other than unabsorbed depreciation or carried forward losses, are recognized only if there is reasonable certainty that they will be realized in the future and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

1.10 Contingent liabilities

The following are the contingent liabilities outstanding as at the balance sheet date.

Income Tax demand for Rs. 5.64 lakhs has been raised by the Assessing officer for the AY 1995 - 96. The Company has disputed the demand and preferred an appeal before Income Tax (Tribunal). The Company is not aware of the outcome of the appeal. We are therefore, unable to comment on the matter.

1.11 Since the Directors (including the Managing Director) are not drawing any commission, computation of commission for the year ended 31 Mar 2012 as prescribed by sections 198, 309, 349 and 268 read with schedule XIII of the Companies Act, 1956 is not applicable.

1.12 The format of Balance Sheet and Statement of Profit and Loss has been revised. Hence, previous year figures have been regrouped wherever necessary so as to enable comparison with the figures of the current year.

1.13 Related Party Disclosures

Related Party disclosures are given according to Accounting Standard 18 "Related Party Disclosures".

Sl. Name of the party Relationship No.

1. Sonal Impex Limited Associate

2. Sonal Filaments Limited Associate

3. Sonal Ropes Limited Associate

4. Zain Fresh Agro Limited Enterprise over which Key Management Personnel are able to exercise significant influence

5. Sandeep Arora Key Management Personnel

6. Kamal Arora Key Management Personnel

7. Mona Arora Key Management Personnel


Mar 31, 2011

1. Nature of business

1.1 The Company is in the business of manufacturing adhesive tapes and plastic ropes. The manufacturing facility of the Company is situated at Khopoli and its administrative office is situated in Andheri (West), Mumbai. The Company exports its products through its associate companies. The Company also gets some part of the manufacturing done from its associate companies on job work basis.

2. Significant accounting policies

2.1. Accounting convention

The financial statements of the Company are prepared under historical cost convention on an accrual basis and comply with the Accounting Standards ('AS') notified by the Companies (Accounting Standards) Rules, 2006 except otherwise mentioned elsewhere in the financial statements.

2.2. Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities, if any) as at the date of the financial statements and the reported income and expenses during the reporting period like provisioning for taxation, useful lives of assets etc. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

2.3. Revenue Recognition

On sale of goods

Sales of the Company comprise sale of BOPP tapes, ropes and adhesives. Revenue is recognized when the risks and rewards are substantially transferred to the buyer. This usually occurs when the goods leave the premises of the Company.

Interest income

Interest income is recognized on accrual basis.

2.4. Expenses and incomes

Expenses and incomes are accounted for on accrual basis except for bonus to employees. Bonus to employees is accounted for on payment basis. Provisions are made for all known liabilities.

2.5. Fixed Assets and Depreciation

Fixed assets acquired by the Company are reported at acquisition value with deductions for accumulated depreciation.

The acquisition cost includes the purchase price, taxes (which are not subsequently recoverable from the tax authorities), duties, freight and incidental expenses related to the acquisition and installation of the asset. Examples of incidental expenses are delivery and handling costs and installation services.

Fixed assets are depreciated on Straight Line Method ('SLM') at the rates prescribed by Schedule XIV of the Companies Act, 1956. Depreciation is charged on a pro - rata basis on additions made during the year. Assets costing below Rs5000 are expensed out in the year of purchase.

2.6. Foreign exchange transactions

Initial recognition

Transactions in foreign currency are booked at standard rates determined periodically, which approximate the actual rates.

Translation

Cash and bank balances, receivables and liabilities (monetary items) in foreign currencies as at the year end are revalued at year end rates and the unrealized translation differences are included in the profit and loss account.

Gain or loss on acquisition of fixed assets

Gain / loss arising out of fluctuations on realization / payment or restatement, except those identifiable to acquisition of fixed assets is charged / credited to the profit and loss account. Gain / loss on account of exchange fluctuations identifiable to fixed assets acquired are adjusted against the carrying value of the related fixed asset.

2.7. Inventory

Raw materials, consumable and packing materials, semi finished goods and finished goods are valued at cost or net realizable value, whichever is lower.

Cost includes freight, taxes and duties (other than those subsequently recoverable from the tax authorities) and all other expenses incurred on bringing the inventory to its present location and condition.

Inventory is valued on weighted average basis.

Convert credit for materials purchased for production is taken into account at the time of purchases. Convert credit on purchases of capital items wherever applicable is recognized when the asset is purchased. The Convert credit so taken is utilized for the payment of excise duty on goods manufactured. The unutilized Convert credit is carried forward in the financial statements.

2.8. Segment reporting

The Company is primarily engaged in manufacture of Ropes and BOPP tapes.

Although these two businesses represent separate business segments, Accounting Standard 17 - "Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable to the Company.

2.9 A Furniture near Share

2.10 Taxes on income

Income tax is computed in accordance with Accounting Standard 22 - 'Accounting for Taxes on Income' ('AS - 22'), notified by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted in the same period to which the revenue and expenses relate.

Deferred tax assets, other than unabsorbed depreciation or carried forward losses, are recognized only if there is reasonable certainty that they will be realized in the future and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date._

2.11 Secured Loans

Secured loan represents loans obtained for commercial purposes. These loans are secured by mortgage of the Company's immovable property and hypothecation of the movable properties, stocks, book debts and personal guarantees of the directors. Loan from Kotak Mahindra Prime Limited is secured against car.

The loan from Kotak Mahindra Prime Limited has been repaid during the year and a new loan from Axis Bank for a new car has been availed. The loan is secured against the car. Amount payable within 1 year is Rs 1.48 lakhs.

2.12 Contingent liabilities

The following are the contingent liabilities outstanding as at the balance sheet date.

Income Tax demand for Rs.5.64 lakhs has been raised by the Assessing officer for the AY 1995 - 96. The Company has disputed the demand and preferred an appeal before Income Tax (Tribunal) and final judgment is awaited.

2.13 Unsecured loans

Under the packaging scheme of incentives of the Government of Maharashtra, the Company is entitled to defer its liability for the payment of sales tax up to a period of 10 years for its manufacturing facility at Khopoli.

The amount is payable as per liability determined by the Sales Tax authorities. The Company has paid Rs22.13 lakhs as sales tax liability on this account during the year.

2.14 Since the Directors (including the Managing Director) are not drawing any commission, computation of commission for the year ended 31 Mar 2011 as prescribed by sections 198, 309, 349 and 268 read with schedule XIII of the Companies Act, 1956 is not applicable.

2.15 Previous year figures have been regrouped wherever necessary. ;-

Notes:

1. Items of a similar nature may be disclosed in aggregate by type of related party except when separate disclosure is necessary for an understanding of the effects of related party transactions on the financial statements of the reporting enterprise. Disclosure of details of particular transactions with individual related parties would frequently be too voluminous to be easily understood. Accordingly, items of a similar nature may be disclosed in aggregate by type of related party. However, this is not done in such a way as to obscure the importance of significant transactions. Hence, purchases or sales of goods are not aggregated with purchases or sales of fixed assets. Nor a material related party transaction with an individual party is clubbed in an aggregated disclosure.


Mar 31, 2010

1.1. Accounting convention

The financial statements of the Company are prepared under historical cost convention on an accrual basis and comply with the Accounting Standards (AS) notified by the Companies (Accounting Standards) Rules, 2006 except otherwise mentioned elsewhere in the financial statements.

1.2. Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities, if any) as at the date of the financial statements and the reported income and expenses during the reporting period like provisioning for taxation, useful lives of assets etc. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Future results may vary from these estimates.

1.3. Revenue Recognition

Sales of the Company comprise sale of BOPP tapes and ropes. Revenue is recognized when the risks and rewards are substantially transferred to the buyer. This usually occurs when the goods leave the premises of the Company.

Interest income is recognized on accrual basis.

1.4. Expenses and incomes

Expenses and incomes are accounted for on accrual basis. Provisions are made for all known liabilities.

1.5. Fixed Assets and Depreciation

Fixed assets acquired by the Company are reported at acquisition value with deductions for accumulated depreciation.

The acquisition cost includes the purchase price, taxes (which are not subsequently recoverable from the tax authorities), duties, freight and incidental expenses related to the acquisition and installation of the asset. Examples of incidental expenses are delivery and handling costs and installation services.

Fixed assets are depreciated on Straight Line Method (SLM) at the rates prescribed by Schedule XIV of the Companies Act, 1956. Depreciation is charged on a pro - rata basis on additions made during the year. Assets costing below Rs 5000 are expensed out in the year of purchase.

1.6. Foreign exchange transactions

Transactions in foreign currency are booked at standard rates determined periodically, which approximate the actual rates. Cash and bank balances, receivables and liabilities (monetary items) in foreign currencies as at the year end are revalued at year end rates and the unrealized translation differences are included in the profit and loss account.

Gain / loss arising out of fluctuations on realization / payment or restatement, except those identifiable to acquisition of fixed assets is charged / credited to the profit and loss account. Gain / loss on account of exchange fluctuations identifiable to fixed assets acquired are adjusted against the carrying value of the related fixed asset.

1.7. Inventory

Raw materials, consumable and packing materials, semi finished goods and finished goods are valued at cost or net realizable value, whichever is lower. Cost includes freight, taxes and duties (other than those subsequently recoverable from the tax authorities) and all other expenses incurred on bringing the inventory to its present location and condition.

Inventory is valued on weighted average basis.

Cenvat credit for materials purchased for production is taken into account at the time of purchases. Cenvat credit on purchases of capital items wherever applicable is recognized when the asset is purchased. The Cenvat credit so taken is utilized for the payment of excise duty on goods manufactured. The unutilized Cenvat credit is carried forward in the financial statements.

1.8. Segment reporting

The Company is primarily engaged in manufacture of Ropes and BOPP tapes.

Although these two businesses represent separate business segments, Accounting Standard 17 -"Segment Reporting" issued by the Institute of Chartered Accountants of India is not applicable to the Company.

1.9 Taxes on income

Income tax is computed in accordance with Accounting Standard 22 - Accounting for Taxes on Income (AS - 22), notified by the Companies (Accounting Standards) Rules, 2006. Tax expenses are accounted in the same period to which the revenue and expenses relate.

Deferred tax assets, other than unabsorbed depreciation or carried forward losses, are recognized only if there is reasonable certainty that they will be realized in the future and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

1.10 Secured Loans

Secured loan represents loans obtained for commercial purposes. These loans are secured by mortgage of the Companys immovable property and hypothecation of the movable properties, stocks, book debts and personal guarantees of the directors.

Loan from Kotak Mahindra Prime Limited is secured against car.

1.11 Contingent liabilities

The following are the contingent liabilities outstanding as at the balance sheet date. Letter of Credits outstanding aggregate to Rs 78.62 lakhs (Previous Year: Rs 1.96 Crores).

Income Tax demand for Rs. 5.64 lakhs has been raised by the Assessing officer for the AY 1995 - 96. The Company has disputed the demand and preferred an appeal before Income Tax (Tribunal) and final judgment is awaited.

1.12 Unsecured loans

Under the packaging scheme of incentives of the Government of Maharashtra, the Company is entitled to defer its liability for the payment of sales tax upto a period of 10 years for its manufacturing facility at Khopoli.

The amount is payable as per liability determined by the Sales Tax authorities The Company has paid Rs 22.13 lakhs as sales tax liability on this account during the year.

1.13 Since the Directors (including the Managing Director) are not drawing any commission, computation of commission for the year ended 31 Mar.2010 as prescribed by sections 198, 309, 349 and 268 read with schedule XIII of the Companies Act, 1956 is not applicable.

Notes:

1. Items of a similar nature may be disclosed in aggregate by type of related party except when separate disclosure is necessary for an understanding of the effects of related party transactions on the financial statements of the reporting enterprise. Disclosure of details of particular transactions with individual related parties would frequently be too voluminous to be easily understood. Accordingly, items of a similar nature may be disclosed in aggregate by type of related party. However, this is not done in such a way as to obscure the importance of significant transactions. Hence, purchases or sales of goods are not aggregated with purchases or sales of fixed assets. Nor a material related party transaction with an individual party is clubbed in an aggregated disclosure.

 
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