Padmanabh Alloys & Polymers Ltd. कंपली की लेखा नीति

Mar 31, 2024

2 SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation
Measurement of fair values :

This note provides a list of the significant accounting policies adopted in the preparation of these financial
statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

The financial statements have been prepared on the historical cost basis except for certain financial instruments
that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability,
the Company takes in to account the characteristics of the asset or liability if market participants would take
those characteristics into account when pricing the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these financial statements is determined on such a basis.

In addition, for financial reporting purposes, fair value measurements are categorized into level-1, 2, or 3 based
on the degree to which the inputs to the fair value measurements are observable and the significance of the
inputs to the fair value measurements in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted ( in active markets for identical assets or liabilities that the
entity can access at the measurement date;

• Level 2 inputs are inputs, that are quoted prices included within level 1, that are observable for the asset or
liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as
possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the
fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair
value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognises
transfers between levels of the fair value hierarchy at the end of the reporting period during which the
change has occurred."

(b) Significant Accounting Policies

(i) Basis of accounting

The financial statements have been prepared on the historical cost convention and in accordance with
normally accepted accounting principles.

(ii) Property, plant and equipment
Recognition and measurement:

Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs,
less accumulated depreciation and accumulated impairment losses, if any. Cost of an item of property,
plant and equipment comprises its purchase price, including import duties and non-refundable purchase
taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item
to its working condition for its intended use and estimated costs of dismantling and removing the item
and restoring the site on which it is located. The cost of a self-constructed item of property, plant and
equipment comprises the cost of materials and direct labor, any other costs directly attributable to bringing
the item to working condition for its intended use, and estimated costs of dismantling and removing the
item and restoring the site on which it is located. If significant parts of an item of property, plant and
equipment have different useful lives, then they are accounted for as separate items (major components)
of property, plant and equipment.Any gain or loss on disposal of an item of property, plant and equipment
is recognised in profit or loss.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit
or loss.

(iii) Depreciation

The company depreciates property, plant and equipment over their estimated useful lives using the straight
line depreciation method. The estimate of the useful life of the assets has been assessed based on technical
advice obtained by the management, which considers the nature of the asset, the usage of the asset,
expected physical wear and tear, the operating conditions of the asset, anticipated technological changes,
manufacturers warranties and maintenance support, etc.

(iv) Inventories

Inventories of Raw Material and Semi-finished goods are valued at cost. Inventories of Finished goods are
measured at the lower of cost and net realisable value. The cost of inventories is based on the Cost basis
and includes expenditure incurred in acquiring the inventories, production or conversion costs and other
costs incurred in bringing them to their present location and condition except duties and taxes which are
allowable as input credit. Costs incurred in bringing each product to its present location and condition are
accounted for as follows:

Raw materials and Work-in-progress: cost includes cost of purchase and other costs incurred in bringing
the inventories to their present location and condition. Cost is determined on FIFO basis.

Finished goods and work in progress: Cost includes cost of direct materials and labour and a proportion of
manufacturing overheads based on the normal operating capacity, but excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses.

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Mar 31, 2011

1. SIGNIFICANTACCOUNTING POLICIES:

a. BASIS OF ACCOUNTING: The financial statements are prepared under historical cost convention and accrual system of accounting in accordance with the requirement of the companies act, 1956, however

i. Sales rejections are accounted on actual receipt of rejected goods.

ii. Price differences are accounted on actual settlement with the parties.

iii. Export Incentives. Insurance and other claims are accounted on cash basis.

b. FIXEDASSETS& DEPRECIATION:

i. All fixed assets are shown at cost net of Cenvat less accumulated depreciation.

ii. Depreciation on all fixed assets except Building and Plant & Machinery has been calculated on the WDV method at the rates and in the manner specified in the schedule XIV to the Companies Act, 1956.

iii. Depreciation on Building and Plant & Machinery has been provided on Straight Line Method at the rates and in the manner specified in the schedule XIV to the Companies Act, 1956.

c. INVENTORIES:

-Raw Material & other material - at Cost

- Semi Finished Goods - at Cost

- Finished Goods - at lower or cost or Market Value

The cost for the purpose of valuation of Finished goods & semi finished goods includes material cost and direct conversion cost and overheads incurred for bringing goods to their present location and condition as well as excise duty wherever applicable.

d. FOREIGN CURRENCY TRANSACTIONS: Foreign currency transactions are accounted at the rate of exchanged in force at the time transactions are affected.

e. RETIREMENT BENEFITS: Provision for gratuity is made on the basis of an actual basis.

f. CENVAT CREDIT: Cenvat credit available is accounted by recording materials purchase at net of excise duty. Cenvat credit availed is accounted by way of adjustment against Excise duty payable on dispatch of finished goods.

g. SALES: Sales of goods is recognized at the point of dispatch to the customer. Sales include excise duty but exclude sales tax.

h. IMPAIRMENT OF FIXED ASSETS: Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor. Reversal of impairment losses recognized in prior years is recorded when there is an ' indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an * impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.

i. PROVISIONS, CONTINGENTLIABILITIES AND CONTINGENT ASSETS

Provisions-Provision is recognised when

i. The Company has a present obligation as a result of past event;

ii. It is probable that an outflow of resources embodying economic benefit is expected to settle the obligation,

iii. Reliable estimate can be made for the amount of obligation. Provisions are not discounted to its present value and are determined based on best estimate * of the expenditure required to settle the obligation at the Balance Sheet date. Contingent liability:-Contingent Liability is disclosed in the case of

i. As present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation.

ii. A possible obligation unless the probability of outflow of resources is remote.

Contingent assets:-Contingent Assets are neither recognised nor disclosed. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.