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Accounting Policies of Polymac Thermoformers Ltd. Company

Mar 31, 2014

1. Accounting Conventions

The Accounts are prepared under historical cost convention based on generally accepted accounting principles and applicable Accounting Standards specified by the Institute o Chartered Accountants of India and IRAC norms issued by RBI. The Company follows accrual system of accounting and recognition of Income and Expenditure is on Accrual basis. Accounting policies, unless specifically stated to be other, are consistent and are in consonance with generally accepted accounting policies.

2. Fixed Assets and Depreciation

Fixed assets, except land are stated at cost of acquisition cost, net of accumulated depreciation The cost comprises of purchase cost and other directly attributable cost of bringing the assets to Its working condition for intended use. Any trade discount and rebates are deducted in arriving at the purchase price.

Depreciation on fixed assets is calculated under WDV method as per Schedule XIV of the companies Act 1956.

3. Inventory

Inventories are stated at lower of cost. Cost is determined on weighted average/First in first out (FIFO) basis, as considered appropriate by the company. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct cost and related production overheads.

4. Investments

Investments are stated at cost. Provision for diminution in the value of long term investments is made only, if such a decline is other than temporary nature, in the opinion of the management.

5. Gratuity

Provisions of payment of Gratuity Act are not applicable to the Company for the year under review.

6. Taxation

In accordance with the requirements of Accounting Standards - 22 relating to Taxation on income the deferred tax assets has not been currently recognized in the accounts, as a measure of prudence and as recommended by Accounting Standard - 22.

7. Provisions and contingent Liabilities

Provisions: Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities represent items that are not recognized in the Statement of Financial Position because there is significant uncertainty at that date as to the necessity for the entity to receive or make payments in respect of them.

There is a claim of the WBSEDCL amounting to Rs. 2,74,03,132/- against which a case is pending in the High Court.