1 COMPANY OVERVIEW
G M Polyplast Limited (Formerly known as G M Polyplast Private Limited) ("the Company") is a public limited company having Corporate Identity Number L25200MH2003PLC143299. The Company was incorporated as G M POLYPLAST PRIVATE LIMITED under the provisions of Companies Act 1956 vide Certificate of Incorporation dated November 27, 2003 issued by the Registrar of Companies, Mumbai bearing Corporate Identity Number U25200MH2003PTC143299. The name of the Company was subsequently changed to G M Polyplast Limited pursuant to special resolution passed by the Shareholders at its Extra Ordinary General Meeting held on July 06, 2020 and a fresh certificate of incorporation consequent upon conversion from Private Company to Public Company was issued by the Registrar of Companies, Mumbai dated 30/07/2020 bearing Corporate Identity Number L25200MH2003PLC143299.
2 MATERIAL ACCOUNTING POLICIES
i Basis of accounting
The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles ("IGAAP") under the historical cost convention on accrual basis. IGAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 ("the act") read with Companies (Accounts) Rules 2006 and the provisions of the Act (to the extent notified). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to the existing accounting standard requires a change in the accounting policy here to in use.
ii Revenue Recognition Sale of goods
Revenue is recognised to the extent, that it is probable that the economic benefits will flow to the Entity and it can be reliably measured and when the significant risks and rewards of ownership of the goods are transferred to the customers. Sales are net of sales returns and trade discounts. Revenue from service is recognized when such provision of service is completed.
Export Incentives
Revenue in respect of export incentives such as drawback & rebate is recognised on export of goods and when it is probable that the economic benefits will flow to the company.
Dividends
Income from dividend is recognized when right to receive payment is established.
Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable.
iii Property, Plant And Equipment
(a) Property, Plant and Equipment are stated at cost.
(b) Expenditure relating to existing property, plant and equipment is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier.
(c) An item of property, plant and equipment is eliminated from financial statements, either on disposal or when retired from active use.
(d) Expenses during construction period are allocated to respective item of property, plant and equipment on completion of construction.
iv Intangible Assets
Intangible assets are amortised over their respective individual estimated useful life on straight line basis commencing from the date such asset is acquired for use in the Company. Computer Software and Technical Know How are classified as intangible assets and amortised on straight line basis over a period of 6 years. Pro-rata amortisation is charged on intangible assets from/up to the date on which such assets are acquired for use/are deleted or discarded.
v Intangible Assets under Development
Intangible Assets under Development represent expenditure incurred on development activities that meet the recognition criteria under AS 26 and are not yet complete or available for use.
Such costs are capitalized only when the enterprise can demonstrate:
1. Technical feasibility of completing the asset;
2. Intention and ability to use or sell the asset;
3. Probability of Asset to generate future economic benefits;
4. Availability of adequate resources to complete the development; and
5. Ability to measure the expenditure reliably.
Until completion, these are disclosed as "Intangible Assets Under Development" and are not amortized. The assets are transferred to the relevant class of intangible assets upon completion and are amortized over their estimated useful life.
vi Investments
Long term investments are valued at cost.
vii Inventory Valuation
(a) Raw materials and stores are valued at weighted average cost after providing for obsolescence.
(b) Finished Goods are valued at Weighted Average Cost. viii Depreciation
Depreciation on tangible assets is provided on written down value method over the useful lives of assets which is as stated in Schedule II of the Companies Act, 2013. Depreciation for assets purchased/ sold during a period is proportionately charged.
ix Borrowing Cost
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use.
x Earnings Per Share
The earnings considered in ascertaining the company's EPS comprises the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.
xi Foreign Currency Conversion
Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction. Foreign currency monetary items are reported using the closing rate.
Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements are recognised as income or expense in the year in which they arise.
xii Provisions
A provision is recognised when an enterprise has a present obligation as a result of past event 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 determined based on management estimate required to settle the obligation at the balance sheet date.
xiii Taxes on Income
Tax expense comprises of current tax & deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred tax assets and liabilities are recognised for future tax consequences attributable to timing differences between taxable income & accounting income that are capable of reversal in one or more subsequent years and are measured using relevant enacted tax rates.
xiv Cash Flow Statement
Cash flows are reported using the indirect method, whereby the net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
xv Retirement Benefit Costs
Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the salary of covered employee. The contribution is paid to government administered fund.
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972. The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees' services.
Note:- Also refer Note no.39 for Employee Benefit Costs
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