Sandur Laminates Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2010

1. The Company has been declared a sick company by the Board for Industrial and Financial Reconstruction (BIFR); the Board vide its order dated 12.06.2003 confirmed that the Company is not likely to make its net worth exceed its accumulated losses within a reasonable time while meeting all its financial obligations and that the Company as a result thereof is not likely to become viable in future and hence it is just, equitable and in public interest that it should be wound up under Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. Subsequently, during the year 2005-06, the Company entered into negotiated settlements with the financial institutions and a bank. The Company also filed compromise petitions along with the financial institutions and a bank before the Debt Recovery Tribunal. The Company had entered into a Memorandum of Understanding with a strategic partner according to which the said strategic partner had fully settled the dues to the financial institutions and a bank. The High Court of Kamataka, to which reference was made by the BIFR for winding up of the Company, has since referred the matter back to the BIFR for arriving at a rehabilitation package for revival of the Company. The Company had submitted a rehabilitation proposal to the Operating Agency (OA), IDBI. The Honle Bench of the BIFR at its hearing held on 14 May 2007 has directed IDBI to submit the Draft Rehabilitation Scheme along with its report. The Company has entered into one time settlement for payment of dues to certain companies. However, the Company has not written back the dues representing the wavier agreed by the said companies pending approval of Draft Rehabilitation Scheme by the BIFR. The Company has submitted the revised rehabilitation proposal to IDBI, which inturn submitted a revised Draft Rehabilitation Scheme to BIFR on 28 August 2009 for its consideration. In view of the above developments, the accounts have been prepared on a going concern basis.

2. Accounting Policies

The financial statements are prepared in accordance with Generally Accepted Accounting Principles under the historical cost convention

on an accrual basis and in accordance with the requirements of the Companies Act, 1956. The significant accounting policies followed by the Company are as stated below:

i) Use of estimates:

The Company uses prudent and reasonable assumptions and estimates in the preparation of its financial statements, and these are reflected in the reported amounts of income and expenses during the year, and the reported balances of assets and liabilities, and disclosures relating to contingent liabilities, as at the date of the financial statements.

ii) Fixed Assets

Fixed assets are capitalised at acquisition cost including directly attributable costs of bringing the asset to its working condition for the intended use.

iii) Depreciation /Amortization

The Companys policy is to depreciate its assets on a straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except technical know-how fee which is amortized over six years in equal annual instalments from the date of commencement of commercial production.

Individual assets costing less than Rs. 5,000/- are depreciated in full in the year of its purchase.

iv) Foreign Currency Transactions

Transactions in foreign currencies are recorded at exchange rates prevailing on the respective dates of the relevant transactions.

Foreign exchange rate fluctuations relating to monetary assets and liabilities are restated at the year end rates.

The net loss or gain arising on restatement/ settlement, if any, is adjusted to the profit and loss account.

v) Investments

Investments are valued at acquisition cost. However, provision for diminution in value is made to recognise a decline, other than temporary, in value of long-term investments.

vi) Revenue recognition

Revenue is recognised at the point of despatch of materials to customers from plant or stock points, as applicable.

vii) Provisions and Contingencies:

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

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

viii) Impairment of Assets

An impairment loss is recognised when the carrying amount of an asset exceeds greater of net selling price or value in use. ix) Taxation

a) Current Tax

Current tax expense is determined in accordance with the provisions of the Income-tax Act, 1961.

b) Deferred Tax

Deferred tax assets and liabilities are measured using the tax rates which have been enacted or substantively enacted at the balance sheet date. Deferred tax expense or benefit is recognised, subject to consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversing in one or more subsequent periods.

Deferred tax assets are recognised for all deductible timing differences and are carried forward to the extent there is reasonable certainty that sufficient taxable profit will be available to release these assets. Deferred tax assets to the extent that relate to brought forward losses and unabsorbed depreciation, are recognised only to the extent there is virtual certainty of realisation, that sufficient taxable income will be available to realise such asset.