Kanoria Plaschem Ltd. कंपली की लेखा नीति

Mar 31, 2011

1) BASIS OF ACCOUNTING :

The Financial statements are prepared under the historical cost convention in accordance with generally accepted accounting principles and provisions of the Companies Act, 1956 and Applicable Accounting Standards as adopted consistently by the Company.

2) REVENUE RECOGNITION:

Revenues from the sale of goods are recognized upon passage of title to the customer, which generally coincides with their delivery.

3) EXPENDITURE:

The Company generally follows mercantile systems of accounting and recognizes significant items of expenditure on accrual basis.

4) FIXED ASSETS

Fixed Assets are stated at cost net of CENVAT, less accumulated depreciation. The cost of assets comprises its purchase price and any directly attributable cost of bringing the assets to working condition for its intended use. Expenditure for additions, modifications, improvements and renewals are capitalized and expenditure for maintenance and repairs are charged to the Profit and Loss Account. When assets are sold or discarded their cost and accumulated depreciation are removed from the accounts and any gain or loss resulting from their disposal is included in the Profit and Loss Account.

5) DEPRECIATION:

Depreciation on fixed assets is provided on Straight Line Method at the rate and in the manner prescribed in SCHEDULE XIV to the Companies Act, 1956 except in respect of Plant and Machinery. Depreciation on Plant and Machinery has been made on basis of number of year's useful life of each of the Plant and Machinery. During the year under consideration the company has obtained a Technical Report from a registered valuer and revised the rate of depreciation of all Plant and Machinery based on its balance useful life. The excess depreciation charged on the Plant and Machinery has been written back to Profit and Loss account.

6) FOREIGN CURRENCY TRANSACTIONS:

Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of the transaction.

7) INVENTORIES:

Raw materials, Stores and Tools, Spare Parts and Packing Materials are valued at cost. Finished Goods and Work-in-Progress are valued Lower of cost or net realizable value. Provision for obsolescence in inventories is made, whenever necessary.

8) INCOME TAX:

Income Tax will be recognised in the year when payments are required to be made, depending on profitability. So for as deferred tax is concerned due to huge carry forward loss and Depreciation as per books, management is of the opinion that deferred tax is not required to be recognised.

9) RETIREMENT BENEFITS:

9.1 Provident Fund:

Company's contributions to Provident Fund and Pension Fund are charged to Profit and Loss Account.

9.2 Leave Encashment:

The Leave Encashment benefit payable to employees is determined and recognized on the basis of actual liability at the end of the period.

10) INVESTMENTS:

Investments are stated at cost less provision for any permanent diminution in value.