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Accounting Policies of Well Pack Papers & Containers Ltd. Company

Mar 31, 2010

A. System Accounting :

(i) Financial Statement are based on historical cost.

(ii) The Company Generally follows the mercantile System of Accounting and recognizes Income & Expenditure on the Accrual Basis Except those with Significant Uncertainties

B. Sales :

Sales Includes Excise Duty and Excludes VAT & CST and is Net of Sales Returns.

C. Fixed Assets :

Fixed Assets are stated at cost net of Modvat All Cost Including Financing Costs till Commencement of Commercial Production are capitalised.

D. Depreciation :

Depreciation is Provide as per Straight Line Method Basis as per Rate Specified under Schedule: XIV of the Companies Act, 1956. Depreciation on Addition is Provided Proportionately from the Month of Addition.

E. Borrowing Cost :

Borrowing Cost of the funds borrowed for the qualifying assets is capitalized till the date of commencement of commercial Production other borrowing cost is charged to revenue.

F. Inventories :

Raw Material At Cost- determined on FIFO Basis

Packing Materials At Cost - determined on FIFO Basis

Fuel, Stores & Spares At Cost- determined on FIFO Basis

Finished Goods At Cost or Market Value whichever is lower

Work in Process At Cost

Wastage At Realisable Value

G. Valuation of Investment:

Long term investments are valued at cost of acquisition.

H. Foreign Currency Transaction :

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Current Assets and Current Liabilities are translated at the yearend exchange rate and the Profit or Loss determined is recognized in the Profit and Loss Account.

I. Prior Period Items :

Income and Expenditure pertaining to prior period. Where ever material affecting the operating results disclosed separately.

J. Retirement And Other Employee Benefits :

Repayments for present liability of future payments of Gratuity is being made to approved gratuity which fully cover the same under group gratuity policy with Life Insurance Corporation of India. The gratuity trusts are covered with Life Insurance of India (LIC) and premiums are paid on advice from LIC, which determines the same on the basis of actuarial valuation. Provision for leave encashment is made as at the yearend as per the financial figures and other details provided and certified by the management

K. Taxes on Income :

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred tax on account of timing difference between taxable and accounting income is provided considering the tax rates and the tax laws enacted or substantively enacted by the Balance Sheets date in accordance with Accounting Standard -22 of the Institute of Chartered Accounts of India.

L. Impairment Of Assets :

The Company evaluates the impairment losses on the fixed assets whenever events of changes in circumstances indicate that their carrying amounts may not be recoverable. If such assets are considered to be impaired the impairment loss is then recognized for the amount by which the carrying amount of the assets exceeds the recoverable amount, which is the higher of an assets net selling price and value in use. For the purpose of assessing impairment, assets are grouped at the smallest levels for which there are sep arate ly identifiable cash flow.

M. 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 Assets are neither recognized nor disclosed in the financial statements.



 
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