Mar 31, 2018
1. significant accounting policies
1.1 Basis of preparation of Financial statements
The principal accounting polices applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented.
The Company has adopted the Indian Accounting Standards (âInd ASâ) in accordance with Ind AS 101 - First Time Adoption of Indian Accounting Standards. The Company has transited from its previous GAAP as define in Ind AS 101 with necessary disclosure relating to reconciliation of Shareholders equity under Previous GAAP and Ind AS and of the net profit as Previous GAAP and Total Comprehensive Income under Ind AS.
(i) Statement of Compliance with Ind-AS
In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (referred to as âIND ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2017. These financial statements have been prepared in accordance with IND AS as prescribed under Section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto with the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto.
The Financial Statement for the year ended March 31, 2018 is the first Financial Statement, the Company has prepared in accordance with IND AS.
(ii) Basis of Preparation and presentation
The financial statements have been prepared and presented on the going concern basis and at historical cost basis considering the applicable provisions of Companies Act 2013, except for the following items that have been measured at fair value as required by relevant IND AS.
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.
a) Certain financial assets/liabilities measured at fair value (refer accounting policy regarding financial instruments) and
b) Any other item as specifically stated in the accounting policy.
(iii) Functional and Presentation Currency
The financial statements are presented in Indian Rupees, which is the functional currency of the Company and the currency of the primary economic environment in which the Company operates.
(iv) Classification of Assets and Liabilities as Current and NonCurrent
All assets and liabilities are classified as current or non-current as per the Companyâs normal operating cycle, and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time lag between the acquisition of assets for processing and their realisation in cash and cash equivalents, 12 months period has been considered by the Company as its normal operating cycle.
(iv) Rounding of amounts
The financial statements are presented in INR and all values are rounded to the nearest Lakh (INR 1,00,000) as per the requirement of Schedule III, unless otherwise stated.
1.2 use of Estimates
The preparation of financial statements requires management to make judgments, estimates and assumptions in the application of accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these stimates. Continuous evaluation is done on the estimation and judgments based on historical experience and other factors, including expectations of future events that are believed to be reasonable.
1.2.1 Critical accounting estimates
a. Useful lives and residual values of property, plant and equipment represent a material portion of the Companyâs asset base. The periodic charge of depreciation is derived after estimating useful life of an asset and expected residual value at the end of its useful life. The useful lives and residual values of assets are estimated by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on various external and internal factors including historical experience, relative efficiency and operating costs and change in technology.
b. Income taxes
The Companyâs tax jurisdiction is India. Significant judgments are involved in determining the provision for income taxes including amounts to be recovered or paid for uncertain tax positions. Management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.
c. Defined benefit obligations
Defined benefit obligations are measured at fair value for financial reporting purposes. Fair value determined by actuary is based on actuarial assumptions. Management judgement is required to determine such actuarial assumptions. Such assumptions are reviewed annually using the best information available with the Management.
d. Contingencies
In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible but not probable of crystalising or are very difficult to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognised.
1.3 Property, Plant and Equipment (PPE) (IND As 16)
These tangible assets are held for use in production, supply of goods or services or for administrative purposes. Property, Plant and Equipment are stated at cost less accumulated depreciation and accumulated impairment losses except for freehold land which is not depreciated. Cost includes purchase price after deducting trade discount /rebate, import duties, non-refundable taxes, Net of Cenvat and VAT credit/GST input credit wherever applicable, cost of replacing the component parts, borrowing costs and other directly attributable cost of bringing the asset to its working condition in the manner intended by the management.
If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE.
The cost of an item of PPE is recognised as an asset if, and only if, it is probable that the economic benefits associated with the item will flow to the Company in future periods and the cost of the item can be measured reliably. Expenditure incurred after the PPE have been put into operations, such as repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred.
Items such as spare parts, standby equipment and servicing equipment are recognised as PPE when it is held for use in the production or supply of goods or services, or for administrative purpose, and are expected to be used for more than one year. Otherwise such items are classified as inventory.
Expenditure on acquisition of PPE for Research and Development (R&D) is included in PPE and depreciation thereon is provided as applicable.
The Company adjusts exchange differences arsing on translation difference/settlement of long term foreign currency monetary items outstanding and pertaining to the acquisition of a depreciable asset to the cost of asset and depreciates the same over the remaining life of the asset. The depreciation on such foreign exchange difference is recognised from first day of its financial year.
De-recognised upon disposal
An item of PPE is derecognised on disposal or when no future economic benefits are expected from use or disposal. Any gain or loss arising on derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss when asset is derecognised.
Treatment of Expenditure during Construction Period
Expenditure, net of income earned, during construction (including financing cost related to borrowed funds for construction or acquisition of qualifying PPE) period is included under capital work-in-progress, and the same is allocated to the respective PPE on the completion of construction. Advances given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under âOther Non-Current Assetsâ.
Transition to Ind As
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2017 measured as per the previous GAAP and use that carrying value as the deemed cost of the PPE.
Depreciation
The depreciable amount of an asset is determined after deducting its residual value. Where the residual value of an asset increases to an amount equal to or greater than the assetâs carrying amount, no depreciation charge is recognized till the assetâs residual value decreases below the assetâs carrying amount. Depreciation of an asset begins when it is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the intended manner. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale in accordance with IND AS 105 and the date that the asset is derecognised. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as prescribed under Part C of Schedule II of the Companies Act, 2013 The identified component of fixed assets are depreciated over the useful lives and the remaining components are depreciated over the life of the principal assets.
Depreciation on fixed assets added/disposed off during the period is provided on pro-rata basis with reference to the date of addition/ disposal.
The assets residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leasehold Land is amortised over the primary period of the lease.
1.4 Intangible assets (IND As 38)
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
Internally Generated Intangible Assets - Research and Development Expenditure:
Expenditure incurred on development is capitalised if such expenditure leads to creation of any intangible asset, otherwise, such expenditure is charged to the Statement of Profit and Loss. PPE procured for research and development activities are capitalised.
1.5 Leases (IND As 17)
At the inception of a lease, the lease arrangements is classified as either a finance lease or an operating lease, based on the substance of the lease arrangement.
As a Lessee:
Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the leaseâs inception at the fair value of the leased property or, if lower, the present value of minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowing or other financial liabilities as appropriate.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from lessor) are charged to profit or loss on straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
As a Lessor:
Lease income from operating leases where the Company is a lessor is recognised in other income on straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
Deposits provided to Lessor:
The Company is generally required to pay refundable security deposits in order to obtain property leases from various lessors.
Such security deposits are financial assets and are recorded at fair value on initial recognition. The difference between the initial fair value and the refundable amount of deposit is recognised as lease prepayments. The initial fair value is estimated as the present value of the refundable amount of security deposit, discounted using the market interest rates for similar instruments.
Subsequent to initial recognition, the security deposit is measured at amortised cost using the effective interest method with carrying amount increased over the lease period up to the refundable amount. The amount of increase in the carrying amount of deposit is recognised as interest income. The lease repayment is amortised on straight-line basis over the lease term as lease rentals expense.
1.6 Inventories (IND As 2)
Inventories consisting of stores and spares, raw materials, work in progress, stock in trade, goods in transit and finished goods are valued at lower of cost and net realisable value. However, materials held for use in production of inventories are not written down below cost, if the finished products are expected to be sold at or above cost.
The cost is computed on FIFO basis and is net of credits under GST/ CENVAT/VAT.
Goods and materials in transit include materials, duties and taxes (other than those subsequently recoverable from tax authorities) labour cost and other related overheads incurred in bringing the inventories to their present location and condition.
Traded goods includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.
1.7 Borrowing Cost (IND As 23)
Borrowing cost includes interest expense, amortisation of discounts, ancillary costs incurred in connection with borrowing of funds and exchange difference, arising from foreign currency borrowings, to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs that are attributable to the acquisition or construction or production of a qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing cost are recognised in the Statement of Profit and Loss in the period in which they are incurred.
1.8 Impairment of Assets (IND As 36)
At the end of each reporting period, the Company reviews the carrying amounts of its PPE and other intangible assets to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The resulting impairment loss is recognised in the Statement of Profit and Loss Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or CGU in prior years. A reversal of an impairment loss is recognised in the Statement of Profit and Loss.
1.9 Government Grants (IND As 20)
Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received. When the grant relates to an expense item, it is recognised in the Statement of Profit and Loss by way of a deduction to the related expense on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognized as income on a systematic basis over the expected useful life of the related asset.
1.10 Taxes (IND As 12)
Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive income.
a) Current Tax
Current tax includes provision for Income Tax computed under Special provision (i.e., Minimum alternate tax) or normal provision of Income Tax Act. Tax on Income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments/appeals.
b) Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences, unabsorbed losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and unabsorbed depreciation can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
c) Minimum Alternate Tax (MAT):
MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised, it is credited to the Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence, it is presented as Deferred Tax Asset.
1.11 Employees Benefits (IND As 19)
a) Employee Benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., are recognized during the period in which the employee renders related services and are measured at undiscounted amount expected to be paid when the liabilities are settled.
b) post-employment obligations
The Company operates the following post-employment schemes:
(i) Defined benefit plans such as gratuity and;
(ii) Defined contribution plans such as provident fund.
(i) Defined benefit plans-Gratuity obligations
The liability or assets recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligations at the end of the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually by actuaries using the projected unit credit method. The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The benefits which are denominated in currency other than INR, the cash flows are discounted using market yields determined by reference to high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and change in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service cost.
(ii) Defined contribution plans
The Company pays provident fund contributions to publicly administered funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due.
1.12 Provisions, Provisions, Contingent Liability and Contingent Assets (IND As 37)
Disputed liabilities and claims against the company including claims raised by fiscal authorities (e.g. Sales Tax, Income Tax, Excise, GST etc.) pending in appeal / court for which no reliable estimate can be made and or involves uncertainty of the outcome of the amount of the obligation or which are remotely poised for crystallization are not provided for in accounts but disclosed in notes to accounts. However, present obligation as a result of past event with possibility of outflow of resources, when reliable estimation can be made of the amount of obligation, is recognized in accounts in terms of discounted value, if the time value of money is material using a current pre-tax rate that reflects the risk specific to the liability. No contingent asset is recognized but disclosed by way of notes to accounts.
1.13 Trade and Other Payables
These amounts represent liabilities for goods and services provided to the company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
1.14 Revenue Recognition (IND As 18)
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
sale of Goods
Revenue from sale of goods is recognized, when all significant risks and rewards are transferred to the buyer, as per the terms of the contracts and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. It includes excise duty and excludes value added tax/sales tax/GST. It is measured at fair value of consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
Rendering of Services
Revenue from rendering of services is recognized as per the terms of the contract with customers when related services are performed and when the outcome of the transactions involving rendering of services can be estimated reliably.
Dividend Income
Dividend Income is accounted for when the right to receive the same is established, which is generally when shareholders approve the dividend.
Interest Income
Interest Income on financial assets measured at amortised cost is recognised on a time-proportion basis using the effective interest method.
Other Income
Other income is recognised when no significant uncertainty as to its determination or realisation exists.
1.15 Cash Flows and Cash and Cash Equivalents (IND As 7)
Statement of cash flows is prepared in accordance with the indirect method prescribed in the IND AS 7. For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, cheques and drafts on hand, deposits held with Banks, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and book overdrafts. However, Book overdrafts are shown within borrowings in current liabilities in the balance sheet for the purpose of presentation
1.16 Earnings per share (IND As 33)
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
- The profit attributable to owners of the Company
- By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- The after âincome-taxâ effect of interest and other financing costs associated with dilutive potential equity shares, and
- The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
1.17 segment Reporting (IND As 108)
Based on âManagement Approachâ as defined in IND AS 108 -Operating Segments, the Management evaluates the Companyâs performance and allocates the resources based on an analysis of various performance indicators by business segments.
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
1.18 Foreign Currency Transactions (IND As 21 )
In preparing the financial statements of the Company, transactions in foreign currencies, other than the Companyâs functional currency are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the rate prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency, are not retranslated.
Exchange differences on monetary items are recognised in the Statement of Profit and Loss in the period in which these arise except for:
- exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; and
- exchange differences on transactions entered into in order to hedge certain foreign currency risks.
1.19 Fair Value Measurement (IND As 113 )
The Company measures financial instruments, such as investments (other than equity investments in Subsidiaries, Joint Ventures and Associates) and derivatives at fair values at each Balance Sheet date.
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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or In the absence of a principal market,in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
1.20 Recognition of dividend income, interest income or expense
Dividend income is recognized in profit or loss on the date on which the companyâs right to receive payment is established.
Interest income or expense is recognized using the effective interest method. The âeffective interest rateâ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortized cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
1.21 Events occurring after the balance sheet date (IND As 10)
Assets and liabilities are adjusted for events occurring after the reporting period that provides additional evidence to assist the estimation of amounts relating to conditions existing at the end of the reporting period.
Dividends declared by the Company after the reporting period are not recognized as liability at the end of the reporting period. Dividends declared after the reporting period but before the issue of financial statements are not recognized as liability since no obligation exists at that time. Such dividends are disclosed in the notes to the financial statements.
1.22 Financial Instruments (IND As 109)
i. Recognition and initial measurement
All financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement Financial assets
On initial recognition, a financial asset is classified as measured at
- amortized cost;
- Fair Value through Other Comprehensive Income (FVOCI) -equity investment; or
- Fair Value Through Profit and Loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investmentâs fair value in OCI. (designated as FVOCI
- equity investment). This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI or at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on de-recognition is also recognized in profit or loss
De-recognition
Financial assets
The company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
If the company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
Financial liabilities
The company de-recognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The company also de-recognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognized in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
1.23 First time adoption of IND As - Mandatory exceptions / Optional exemptions (IND As 101)
Overall principle
The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2017 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying certain items from Previous GAAP to Ind AS as required under the Ind AS, and applying Ind AS in the measurement of recognized assets and liabilities. However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below:
- De-recognition of financial assets and financial liabilities
The Company has applied the de-recognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).
- Classification of debt instruments
The Company has determined the classification of debt instruments in terms of whether they meet the amortised cost criteria or the fair value through other comprehensive income (FVTOCI) criteria based on the facts and circumstances that existed as of the transition date.
1.24 Cash Dividend to Equity Holders of the Company:
The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
1.25 Recent accounting pronouncements
In March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115 - Revenue from Contract with Customers, Appendix B to Ind AS 21 - Foreign currency transactions and advance consideration and amendment to certain existing Ind AS.
These amendments shall be applicable to the Company from April 01, 2018.
The company will be adopting the amendments from their effective date.
(a) Issue of Ind As 115 - Revenue from Contracts with Customers
Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
Application of above standard is not expected to have any material impact on the Companyâs Financial Statements.
(b) Appendix B to Ind As 21 - Foreign currency transactions and advance consideration
The Appendix clarifies that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the asset, expense or income (or part of it) is the date on which an entity initially recognizes the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration towards such assets, expenses or income. If there are multiple payments or receipts in advance, then an entity must determine transaction date for each payment or receipts of advance consideration.
The impact of the Appendix on the financial statements, as assessed by the Company, is expected to be not material.
1.26 Research and Development
Expenditure on research is recognized as an expense when it is incurred. Expenditure on development which does not meet the criteria for recognition as an intangible asset is recognized as an expense when it is incurred.
Items of property, plant and equipment and acquired intangible assets utilized for research and development are capitalized and depreciated / amortized in accordance with the policies stated for Property, Plant and Equipment and Intangible Assets.
1.27 Goods and service Tax / service Tax input Credit:
Goods and Service tax / Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilising the credits.
- * Lease hold land ocupied in current year from GIDC Ankleshwar: 1. At GIDC Dahej - II, Plot No. D-2/CH/39 admeasuring 60,000 Sq Mtrs. RS.1,432.85 Lakhs, on 94 years Lease, and 2. At Village Sayakha, Taluka Vagra, Dist Bharuch (GIDC Sayakha) Plot No. T-79 to T-96 admeasuring 115158 Sq Mtrs. RS.2,031.40 Lakhs, on 99 years Lease.
-The above Plots are under development for use and hence no amortization has been provided.
- The additions to the Plant and Machinery includes Research & Development Equipments worth RS.89.70 Lakhs installed and put to use during the year for our in house R & D Laboratory.
Mar 31, 2014
1. 1 Basis of preparation of Financial Statements
a. Disclosure of Accounting Policies
The Financial Statements of the Company have been prepared and
presented in accordance with the generally accepted accounting
principles in India (Indian GAAP) under the historical cost convention
on an accrual basis. The Company has prepared these financial statements
to comply in all material respects with the accounting standards
notifed under the Companies (Accounting Standards) Rules, 2006 and
relevant provisions of the Companies Act, 1956 read with the General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of Companies Act 2013.
b. Use of Estimates
The preparation of financial statements in conformity with the Indian
GAAP requires management to make estimates and assumptions to be made
that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Difference between the actual results and estimates
are recognized in the period in which results are known / materialized.
1.2 Valuation of Inventories
a. Raw material, are valued at lower of the cost on FIFO basis
including incidental expenses to bring the inventories to their present
location and condition and estimated net realizable value after
providing for cost of obsolescence and other anticipated losses,
wherever considered necessary.
b. Packing Materials and Stores & Spares are valued at cost on FIFO
basis.
c. Finished goods and work in process include cost, cost of conversion
and other cost incurred in bringing the inventories to their present
location and condition; and market realizable value whichever is lower.
Trading goods are valued at cost on FIFO basis or market value
whichever is lower. By products are valued at net realizable value.
d. The Company is mainly engaged in the export business, the closing
stock at the year end is generally exported in the next year. Exports
are being exempted from excise duty, Hence no provision for excise duty
has been made in Statement of profit & Loss and Finished goods are
valued without adding therein excise duty. However the said liability
if accounted would have no effect on the profit for the year.
1.3 Cash Flow Statements
The Cash Flow Statement is prepared under "Indirect method". The cash
fow from operating, investing and fnancing activities of the Company
are segregated.
Cash and Cash Equivalents comprises of Cash at Bank, Cash on Hand,
Current and other accounts held with Banks.
1.4 Contingencies and Event Occurring after the Balance Sheet Date
a. Assets and Liabilities are adjusted for events occurring after the
balance sheet date that provide additional evidence to assist the
estimation of amounts relating to conditions existing at the balance
sheet date.
b. Dividends, which are proposed/declared by the Company after the
Balance Sheet date but before the approval of the financial statements
are adjusted.
1.5 Net profit or Loss for the period, Prior Period items and Changes in
accounting Policies significant items or Extra-ordinary items and Prior
Period Incomes and Expenditures are accounted in accordance with
Accounting Standard.
1.6 Depreciation of Fixed Assets
a. Depreciation on tangible fixed assets has been provided on Straight
Line Method corresponding to the rates prescribed under Schedule XIV to
the Companies Act, 1956.
b. Depreciation on additions / deductions in respect of fixed assets
are charged on pro-rata from / up to date on which asset is available
for use / disposal.
c. In respect of Individual assets costing less than H 5,000/- are
depreciated fully in the year / period of the purchase.
d. Assets identified and evaluated technically as obsolete and held for
disposal are stated at their estimated net realizable values.
1.7 Revenue Recognition
a. Sales are recognized when goods are supplied and are recorded net
of trade discounts, rebates and VAT but include, wherever applicable,
excise duties, export incentives such as Duty Drawbacks and premiums on
sale of Import Licenses.
b. Export benefits / incentives are accounted on accrual basis.
Accordingly, estimated export benefits against exports affected during
the year are taken into account as estimated incentives accrued till
the end of the year. In case of License not revalidated after the date
of expiry, the proportionate export benefit / incentive taken credit in
earlier year(s) is written off in the year of expiry of License and /or
changes made by the Central Government during the year in the rate of
tariff of Import Duty.
c. Incomes from services rendered are booked based on agreements/
arrangements with the concerned parties.
d. Income form investments are booked on accrual basis inclusive of
Tax deducted at source.
1.8 Accounting of Fixed Assets
a. Fixed assets are stated at cost of acquisition or construction
/erection, less accumulated depreciation / amortization. Cost of
acquisition or construction is inclusive of purchase price, freight,
and other incidental expenses related to acquisition and installation
and exclusive of VAT, Excise Duty etc. credit availed as per prevailing
rules thereof and any directly attributable cost of bringing the asset
to its working condition for the intended use. Interest incurred during
the period of erection of Fixed Assets on Borrowing Finance for such
fixed assets is capitalized.
b. Depreciation is provided on the straight line method and at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956.
c. Assets identified and evaluated technically as obsolete and held for
disposal are stated at their estimated net realisable value.
d. Capital Work-in-progress is stated in the assets schedule at the
amount spent up to the date of the Balance Sheet, however pending
completion of the project, no depreciation is provided on the same.
1.9 The Effects of Changes in Foreign Exchange Rates
a. Foreign Currency loans in respect of fixed assets are translated at
exchange rate prevalent on the last day of accounting year. Any loss or
gain arising due to foreign exchange fuctuation of the foreign currency
loan of fixed assets outstanding on the last day of the year is charged
to Statement of profit & Loss for the same year.
b. Current assets and liabilities in foreign currency outstanding at
the last day of the accounting year are valued at exchange rate
prevalent at the last day of the accounting year. The loss or gain due
to fuctuation of exchange rates is charged to Statement of profit &
Loss. Treatment of Forward Contract Transactions are dealt with as per
AS Â 11.
1.10 Accounting for Government Grants
Government grants are recognized when there is reasonable assurance
that the same will be received. Government grants relating to revenue
are recognized on accrual and are shown under other income. Capital
grants relating to Specific fixed assets are reduced from the gross value
of the respective fixed assets and other Capital grants are treated as
Capital Reserve.
1.11 Accounting for Investments
Investments those are already realisable and intended to be held for
more then a year from the date on which such investments are made, are
classified as Current Investments. All other Investments are classified
as Long-term Investments.
Current investments are carried at lower cost or fair value. Long-term
investments are stated at cost. Provision for diminution in the value
of long-term investments is made only if such a decline is permanent in
the opinion of the management.
1.12 Employee benefits
a. Defined Contribution Plan
Provident Fund and Employee State Insurance Scheme are Defined
contribution Scheme and the contribution are charged to Statement of
profit and Loss of the year when the contributions to the respective
funds are due.
b. Defined benefit Plan
Gratuity liability for eligible employees is Defined benefit obligation
and are provided for on the basis of an actuarial valuation at the end
of the each financial year.
1.13 Borrowing Costs
Borrowing cost that is attributable to the acquisition or construction
of qualifying assets are capitalized for the period until the asset is
ready for its intended use. All other borrowing costs are charged to
revenue.
1.14 Segment Reporting
The Company has only one main reportable segment i.e. Pigments.
1.15 Related Party Disclosures
Transactions with Key Managerial Personnel and Related Parties as
Defined under Accounting Standard, other than Independent Non- Executive
Directors is disclosed as "Related Party Transactions" in the Notes to
Financial Statements.
1.16 Accounting for Leases
All leases are classified into operating and finance lease at the
inception of the lease. Leases that transfer substantially all risks
and rewards from lessor to lessees are classified as finance lease and
others being classified as operating lease.
There is no any finance or operating lease transactions entered into by
the company.
1.17 Earning Per Share
The Basic and Diluted Earnings Per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
1.18 Accounting for Taxes on Income
a. Current tax is determined as the amount of tax payable to the
taxation authorities in respect of taxable income for the period.
b. Deferred tax is recognized, subject to the consideration of
prudence, on timing difference being differences between taxable income
and accounting income, that originate in one period and are capable of
reversal in one or more subsequent periods.
c. MAT credit entitlements are treated as advance payment of tax.
1.19 Discontinuing Operation
The Company has not discontinued any operations during the year.
1.20 Intangible Assets
Intangible assets are stated at cost less accumulated amortization and
impairment losses, if any.
1.21 Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication exits,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as impairment loss and is recognized in the
Statement of profit and loss.
1.22 Provisions, Contingent Liabilities and Contingent Assets
a. The provisions are recognized and measured by using a substantial
degree of estimation.
b. Contingent Liabilities
Disputed liabilities and claims against the Company including claims
raised by the authorities (e.g. Commercial Tax, Value Added Tax, Income
Tax, Excise etc.) pending in appeal / Court for which no reliable
estimate can be made of the amount of the obligation or which are
remotely poised for crystallization are not provided for in accounts
but disclosed in Notes forming part of Financial Statements.
c. Contingent Assets are neither recognized nor disclosed.
1.23 Accounting of Derivative Financial Instruments
Presently, the Company is not engaged in Derivative Financial
Instruments. However, for derivative contracts, premium paid and
gains/losses on settlement will be charged to Statement of profit and
Loss. Losses arising on the restatement of the outstanding derivative
contracts as at the year end by marking them to market will be charged
to the Statement of profit and Loss.
d. Terms / rights attached to Equity Shares
The Company has issued only one class of equity shares having a par
value of H 10 per share. Each holder of Equity Shares are entitled to
one vote per share. The Company declares dividend in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders at the Annual General Meeting, except in case of
interim dividend. In the event of liquidation of the Company, the
holders of equity shares will be entitled to receive the realized value
of the assets of the Company, remaining after the payment of all
preferential dues. The distribution will be in proportion to the number
of equity shares held by the shareholders.
As per records of the company, including its register of members and
other declarations received from them regarding beneficial interest, the
above shareholding represent both legal and beneficial ownership of the
shares.
g. 1. Aggregate number and class of shares allotted as fully paid up
pursuant to contracts without payment being received in cash : NIL
2. Aggregate number and class of shares allotted as fully paid by way
of Bonus Shares : NIL
3. Aggregate number and class of shares bought back : NIL
a. Secured loans are covered by:
Term Loans from State Bank of India (SBI) are secured by Equitable
Mortgage of Land and Buildings and a frst charge by way of
hypothecation of the whole of the movable properties of the company
including its movable plant & machinery, stores, tools & accessories,
present & future and other movables save & except book debts & current
assets.
Note:
Note - 1: Term Loan II is repayable by 8 quarterly equal installments
of Rs.17,750,000/- and 9th for Rs.17,631,800/-, Term loan I is repayable
within 4 quarterly installments of Rs.6,250,000/-. (Previous year both
together were repayable by 11 equal quarterly installments
Rs.11,900,000/- and 12th for Rs.2,904,171/-balance amount.)
b. Vehicle loans are secured by hypothecation of concerned vehicles.
Repayment terms of Vehicle Loan Vehicle loans are repayable in equal
monthly installment over the terms of one year
There was no default in repayment of loan or interest.
(2) There are no Micro, Small & Medium Enterprises to whom the company
over dues, which are outstanding for more than 45 days as at March 31,
2014. This information is disclosed under the Micro, Small & Medium
Enterprises Development Act, 2006 which has been determined to the
extent such parties have been identified on the basis of the information
available with the company.
Mar 31, 2012
1.1 Basis of preparation of Financial Statements
a. Disclosure of Accounting Policies
The Financial Statements are prepared as per the historical cost
convention on the basis of going concern and in accordance with the
Generally Accepted Accounting Principles in India the applicable
accounting standards notified under the Companies (Accounting
Standards) Rules, 2006.
b. Use of Estimates
The preparation of financial statements requires management to make
estimates and assumptions to be made that affect the reported amount of
assets and liabilities on the date of the financial statements and the
reported amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognized in
the period in which results are known / materialized.
1.2 Valuation of Inventories
a. Raw material, are valued at lower of the cost on FIFO basis
including incidental expenses to bring the inventories to their present
location and condition and estimated net realizable value after
providing for cost of obsolescence and other anticipated losses,
wherever considered necessary.
b. Packing Materials and Stores & Spares are valued at cost on FIFO
basis.
c. Finished goods and work in process include cost, cost of conversion
and other cost incurred in bringing the inventories to their present
location and condition; and market realizable value whichever is lower.
Trading goods are valued at cost on FIFO basis or market value
whichever is lower. By products are valued at net realizable value.
d. The Company is mainly engaged in the export business, the closing
stock at the year end is generally exported in the next year. Exports
are being exempted from excise duty, Hence no provision for excise duty
has been made in Statement of Profit & Loss and Finished goods are
valued without adding therein excise duty. However the said liability
if accounted would have no effect on the profit for the year.
1.3 Cash Flow Statements
The Cash Flow Statement is prepared under ÃIndirect method". The cash
flow from operating, investing and financing activities of the Company
are segregated.
1.4 Contingencies and Event Occurring after the Balance Sheet Date
a. Assets and Liabilities are adjusted for events occurring after the
balance sheet date that provide additional evidence to assist the
estimation of amounts relating to conditions existing at the balance
sheet date.
b. Dividends, which are proposed/declared by the Company after the
Balance Sheet date but before the approval of the financial statements
are adjusted.
1.5 Net Profit or Loss for the period, Prior Period items and Changes
in accounting Policies
Significant items or Extra-ordinary items and Prior Period Incomes and
Expenditures are accounted in accordance with
Accounting Standard.
1.6 Depreciation Accounting
a. Depreciation has been provided on fixed assets on Straight Line
Method corresponding to the rates prescribed under Schedule XIV to the
Companies Act, 1956.
b. Assets identified and evaluated technically as obsolete and held
for disposal are stated at their estimated net realizable values.
1.7 Revenue Recognition
a. Sales are recognized when goods are supplied and are recorded net
of trade discounts, rebates and VAT but include, wherever applicable,
excise duties, export incentives such as Duty Drawbacks and premiums on
sale of Import Licenses.
b. Export benefits / incentives are accounted on accrual basis.
Accordingly, estimated export benefits against exports affected
during the year are taken into account as estimated incentives accrued
till the end of the year. In case of License not revalidated after the
date of expiry, the proportionate export benefit / incentive taken
credit in earlier year(s] is written off in the year of expiry of
License and /or changes made by the Central Government during the year
in the rate of tariff of Import Duty.
c. Incomes from services rendered are booked based on agreements/
arrangements with the concerned parties.
d. Income form investments are booked on accrual basis inclusive of
Tax deducted at source.
1.8 Accounting of Fixed Assets
a. Fixed assets are stated at cost of acquisition or construction
/erection, less accumulated depreciation / amortization. Cost of
acquisition or construction is inclusive of purchase price, freight,
and other incidental expenses related to acquisition and installation
and exclusive of VAT, Excise Duty etc. credit availed as per prevailing
rules thereof and any directly attributable cost of bringing the asset
to its working condition for the intended use. Interest incurred during
the period of erection of Fixec Assets on Borrowing Finance for such
fixed assets is capitalized.
b. Depreciation is provided on the straight line method and at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956.
c. Assets identified and evaluated technically as obsolete and held
for disposal are stated at their estimated net realizable value.
d. Capital Work-in-progress is stated in the assets schedule at the
amount spent up to the date of the Balance Sheet, however pending
completion of the project, no depreciation is provided on the same.
1.9 The Effects of Changes in Foreign Exchange Rates
a. Foreign Currency loans in respect of fixed assets are translated at
exchange rate prevalent on the last day of accounting year. Any loss
or gain arising due to foreign exchange fluctuation of the foreign
currency loan of fixed assets outstanding on the last day of the year
is charged to Statement of Profit & Loss for the same year.
b. Current assets and liabilities in foreign currency outstanding at
the last day of the accounting year are valued at exchange rate
prevalent at the last day of the accounting year. The loss or gain due
to fluctuation of exchange rates is charged to Statement of Profit &
Loss. Treatment of Forward Contract Transactions are dealt with as per
AS - 11.
1.10 Accounting for Government Grants
Government grants are recognized when there is reasonable assurance
that the same will be received. Government grants relating to revenue
are recognized on accrual and are shown under other income. Capital
grants relating to specific fixed assets are reduced from the gross
value of the respective fixed assets and other Capital grants are
treated as Capital Reserve.
1.11 Accounting for Investments
Investments are classified as current or long-term (Non-current)
investments.
Current investments are carried at lower cost or fair value. Long-term
investments are stated at cost. Provision for diminution in the value
of long-term investments is made only if such a decline is permanent in
the opinion of the management.
1.12 Employee Benefits
a. Defined Contribution Plan
Provident Fund and Employee State Insurance Fund are defined
contribution Scheme and the contribution are charged to Statement of
Profit and Loss of the year when the contributions to the respective
funds are due.
b. Defined Benefit Plan
Gratuity liability for eligible employees is defined benefit obligation
and are provided for on the basis of an actuarial valuation at the end
of the each financial year.
1.13 Borrowing Costs
Borrowing cost that is attributable to the acquisition or construction
of qualifying assets are capitalized for the period until the asset is
ready for its intended use. All other borrowing costs are charged to
revenue.
1.14 Segment Reporting
The Company has only one main reportable segment i.e. Pigments.
1.15 Related Party Disclosures
Transactions with Key Managerial Personnel and Related Parties as
defined under Accounting Standard, other than Independent Non-
Executive Directors is disclosed as "Related Party Transactions" in the
Notes to Financial Statements.
1.16 Accounting for Leases
All leases are classified into operating and finance lease at the
inception of the lease. Leases that transfer substantially all risks
and rewards from lessor to lessees are classified as finance lease and
others being classified as operating lease.
There is no any finance or operating lease transactions entered into by
the company.
1.17 Earning Per Share
The Basic and Diluted Earnings Per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
1.18 Accounting for Taxes on Income
a. Current tax is determined as the amount of tax payable to the
taxation authorities in respect of taxable income for the period.
b. Deferred tax is recognized, subject to the consideration of
prudence, on timing difference being differences between taxable income
and accounting income, that originate in one period and are capable of
reversal in one or more subsequent periods.
c. MAT credit entitlements are treated as advance payment of tax.
1.19 Discontinuing Operations
The Company has not discontinued any operations during the year.
1.20 Intangible Assets
Intangible assets are stated at cost less accumulated amortization.
1.21 Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication exits,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as impairment loss and is recognized in the
Statement of profit and loss.
1.22 Provisions, Contingent Liabilities and Contingent Assets
a. The provisions are recognized and measured by using a substantial
degree of estimation.
b. Contingent Liabilities
Disputed liabilities and claims against the Company including claims
raised by the authorities (e.g. Commercial Tax, Value Added Tax, Income
Tax, Excise etc.) pending in appeal / Court for which no reliable
estimate can be made of the amount of the obligation or which are
remotely poised for crystallization are not provided for in accounts
but disclosed in Notes forming part of Financial Statements.
c. Contingent Assets are neither recognized nor disclosed.
1.23 Accounting of Derivative Financial Instruments
Presently, the Company is not engaged in Derivative Financial
Instruments. However, for derivative contracts, premium paid and
gains/losses on settlement will be charged to Statement of Profit and
Loss. Losses arising on the restatement of the outstanding derivative
contracts as at the year end by marking them to market will be charged
to the Statement of Profit and Loss.
Mar 31, 2011
1. Basis of preparation
a. Disclosure of Accounting Policies
The Financial Statements are prepared under the historical cost
convention on the basis of going concern and in accordance with the
Generally Accepted Accounting Principles in India and provisions of the
Companies Act, 1956.
b. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which results are known/materialized.
2. Inventories Valuation
a. Raw material, are valued at lower of the cost on FIFO basis
including incidental expenses to bring the inventories to their present
location and condition and estimated net realizable value after
providing for cost of obsolescence and other anticipated losses,
wherever considered necessary.
b. Packing Materials and Stores & Spares are valued at cost on FIFO
basis.
c. Finished goods and work in process include cost, cost of conversion
and other cost incurred in bringing the inventories to their present
location and condition; and market realizable value whichever is lower.
Trading goods are valued at cost on FIFO basis or market value
whichever is lower. By products are valued at net realizable value.
d. The Company is mainly engaged in the export business, the closing
stock at the year end is generally exported in the next year. Exports
are being exempted from excise duty, Hence no provision for excise duty
has been made in Profit & Loss Account and Finished goods are valued
without adding therein excise duty. However the said liability if
accounted would have no effect on the profit for the year.
3. Cash Flow Statement
Cash Flow Statement is prepared under "Indirect method". The cash flow
from operating, investing and financing activities of the Company are
segregated.
4. Contingencies and Event occurring after the Balance Sheet Date
a. Assets and Liabilities are adjusted for events occurring after the
balance sheet date that provide additional evidence to assist the
estimation of amounts relating to conditions existing at the balance
sheet date.
b. Dividends, which are proposed/declared by the Company after the
Balance Sheet date but before the approval of the financial statements
are adjusted.
5. Net Profit or Loss items and Changes in Accounting Policies
Significant items or Extra-ordinary items and Prior Period Incomes and
Expenditures are accounted in accordance with Accounting Standard
(AS-5).
6. Depreciation
a. Depreciation has been provided on Straight Line Method corresponding
to the rates prescribed under Schedule XIV to the Companies Act, 1956.
b. Assets identified and evaluated technically as obsolete and held for
disposal are stated at their estimated net realizable values.
7. Revenue Recognition
a. Sales are recognized when goods are supplied and are recorded net
of trade discounts, rebates and VAT but include, wherever applicable,
excise duties, export incentives such as Duty Drawbacks and premiums on
sale of Import Licenses.
b. Export benefits / incentives are accounted on accrual basis.
Accordingly, estimated export benefits against exports affected during
the year are taken into account as estimated incentives accrued till
the end of the year. In case of License not revalidated after the date
of expiry, the proportionate export benefit / incentive taken credit in
earlier year(s) is written off in the year of expiry of License and /or
changes made by the Central Government during the year in the rate of
tariff of Import Duty.
c. Incomes from services rendered are booked based on agreements/
arrangements with the concerned parties.
d. Income form investments are booked on accrual basis inclusive of
Tax deducted at source.
8. Fixed Assets
a. Fixed assets are stated at cost of acquisition or construction
/erection, less accumulated depreciation / amortization. Cost of
acquisition or construction is inclusive of purchase price, freight,
and other incidental expenses related to acquisition and installation
and exclusive of VAT, Excise Duty etc. credit availed as per prevailing
rules thereof and any directly attributable cost of bringing the asset
to its working condition for the intended use. Interest incurred during
the period of erection of Fixed Assets on Borrowing Finance for such
fixed assets is capitalized.
b. Depreciation is provided on the straight line method and at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956.
c. Assets identified and evaluated technically as obsolete and held
for disposal are stated at their estimated net realisable value.
d. Capital Work-in-progress is stated in the assets schedule at the
amount spent up to the date of the Balance Sheet, however pending
completion of the project, no depreciation is provided on the same.
9. Accounting for the effects of changes in Foreign Currency
Transaction
a. Foreign Currency loans in respect of fixed assets are translated at
exchange rate prevalent on the last day of accounting year. Any loss or
gain arising due to foreign exchange fluctuation of the foreign
currency loan of fixed assets outstanding on the last day of the year
is charged to profit & loss account for the same year.
b. Current assets and liabilities in foreign currency outstanding at
the last day of the accounting year are valued at exchange rate
prevalent at the last day of the accounting year. The loss or gain due
to fluctuation of exchange rates is charged to Profit & Loss Account.
Treatment of Forward Contract Transactions are dealt with as per AS Ã
11.
10. Accounting for Government Grants
Government grants are recognized when there is reasonable assurance
that the same will be received. Government grants relating to revenue
are recognized on accrual and are shown under other income. Capital
grants relating to specific fixed assets are reduced from the gross
value of the respective fixed assets and other Capital grants are
treated as Capital Reserve.
11. Accounting for Investments
Investments are classified into current investments and long term
investments, current investments are valued scrip wise, at cost or net
realizable value, whichever is lower. Long-term investments are valued
at cost.
12. Employee Benefits
a. Defined Contribution Plan
Provident Fund and Employee State Insurance Fund are defined
contribution Scheme and the contribution are charged to Profit and Loss
Account of the year when the contributions to the respective funds are
due.
b. Defined Benefit Plan
Gratuity liability for eligible employees is defined benefit obligation
and are provided for on the basis of an actuarial valuation at the end
of the each financial year.
13. Borrowing Cost
Borrowing cost that is attributable to the acquisition or construction
of qualifying assets are capitalized for the period until the asset is
ready for its intended use. All other borrowing costs are charged to
revenue.
14. Segment Reporting
The Company has only one main reportable segment i.e. Pigments.
15. Related Party Disclosure
Transactions with Key Managerial Personnel and Related Parties as
defined under Accounting Standard, other than Independent Non-
Executive Directors is disclosed as "Related Party Transactions" in the
Notes to Accounts.
16. Leases
All leases are classified into operating and finance lease at the
inception of the lease. Leases that transfer substantially all risks
and rewards from lessor to lessees are classified as finance lease and
others being classified as operating lease. There is no any finance or
operating lease transactions entered into by the company.
17. Earning Per Share
The Basic and Diluted Earnings Per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
18. Tax on Income
a. Current tax is determined as the amount of tax payable to the
taxation authorities in respect of taxable income for the period.
b. Deferred tax is recognized, subject to the consideration of
prudence, on timing difference being differences between taxable income
and accounting income, that originate in one period and are capable of
reversal in one or more subsequent periods.
19. Discontinuing Operation
The Company has not discontinued any operations during the year.
20. Intangible Assets
Intangible assets are stated at cost less accumulated amortization.
21. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication exits,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as impairment loss and is recognized in the profit
and loss account.
22. Provisions, Contingent Liabilities and Contingent Assets
a. The provisions are recognized and measured by using a substantial
degree of estimation.
b. Contingent Liabilities
Disputed liabilities and claims against the Company including claims
raised by the authorities (e.g. Commercial Tax, Value Added Tax, Income
Tax, Excise etc.) pending in appeal / Court for which no reliable
estimate can be made of the amount of the obligation or which are
remotely poised for crystallization are not provided for in accounts
but disclosed in Notes to Accounts.
c. Contingent Assets are neither recognized nor disclosed.
23. Accounting of Derivative Financial Instruments
Presently, the Company is not engaged in Derivative Financial
Instruments. However, for derivative contracts, premium paid and
gains/losses on settlement will be charged to Profit and Loss Account.
Losses arising on the restatement of the outstanding derivative
contracts as at the year end by marking them to market will be charged
to the Profit and Loss Account.
Mar 31, 2010
1. Basis of preparation
a. Disclosure of Accounting Policies
The Financial Statements are prepared under the historical cost
convention on the basis of going concern and in accordance with the
Generally Accepted Accounting Principles in India and provisions of the
Companies Act, 1956.
b. Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which results are known/materialized.
2. Inventories Valuation
a. Raw material, are valued at lower of the cost on FIFO basis
including incidental expenses to bring the inventories to their present
location and condition and estimated net realizable value after
providing for cost of obsolescence and other anticipated losses,
wherever considered necessary.
b. Packing Materials and Stores & Spares are valued at cost on FIFO
basis.
c. Finished goods and work in process include cost, cost of conversion
and other cost incurred in bringing the inventories to their present
location and condition; and market realizable value whichever is lower.
Trading goods are valued at cost on FIFO basis or market value
whichever is lower. Bye products are valued at net realizable value.
d. The Company is mainly engaged in the export business, the closing
stock at the year end is generally exported in the next year. Exports
are being exempted from excise duty, Hence no provision for excise duty
has been made in Profit & Loss Account and Finished goods are valued
without adding therein excise duty. However the said liability if
accounted would have no effect on the profit for the year.
3. Cash Flow Statement
Cash Flow Statement is prepared under "Indirect method". The cash flow
from operating, investing and financing activities of the Company are
segregated.
4. Contingencies and Event occurring after the Balance Sheet Date
a. Assets and Liabilities are adjusted for events occurring after the
balance sheet date that provide additional evidence to assist the
estimation of amounts relating to conditions existing at the balance
sheet date.
b. Dividends, which are proposed/declared by the Company after the
Balance Sheet date but before the approval of the financial statements
are adjusted.
5. Net Profit or Loss items and Changes in Accounting Policies
Significant items of Extra-ordinary items and Prior Period Incomes and
Expenditure are accounted in accordance with Accounting Standard
(AS-5).
6. Depreciation
a. Depreciation has been provided on Straight Line Method
corresponding to the rates prescribed under Schedule XIV to the
Companies Act, 1956.
b. Assets identified and evaluated technically as obsolete and held
for disposal are stated at their estimated net realizable values.
7. Revenue Recognition
a. Sales are recognized when goods are supplied and are recorded net
of trade discounts, rebates and sales taxes but include wherever
applicable, excise duties, export incentives such as Duty Drawbacks and
premiums on sale of Import Licenses.
b. Export benefits /incentives are accounted on accrual basis.
Accordingly, estimated Export benefits against exports affected during
the year are taken into Account as estimated incentives accrued till
the end of the year. In case of License not revalidated after the date
of expiry, the proportionate export benefit / incentive taken credit in
earlier year(s) is written off in the year of expiry of Licenses and
/or changes made by the Central Government during the year in the rate
of tariff of Import Duty.
c. Incomes from services rendered are booked based on agreements/
arrangements with the concerned parties.
d. Income form investments are booked on accrual basis inclusive of
Tax deducted at source.
8. Fixed Assets
a. Fixed assets are stated at cost of acquisition or construction
/erection (less accumulated depreciation). Cost of acquisition or
construction is inclusive of purchase price, freight, and other
incidental expenses related to acquisition and installation and
exclusive of VAT, Excise Duty etc. credit availed as per prevailing
rules thereof and any directly attributable cost of bringing the asset
to its working condition for the intended use. Interest incurred during
the period of erection of Fixed Assets on Borrowing Finance for such
fixed assets is capitalized.
b. Depreciation is provided on the straight line method and at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956.
c. Assets identified and evaluated technically as obsolete and held
for disposal are stated at their estimated net realisable value.
d. Capital Work-in-progress is stated in the assets schedule at the
amount spent up to the date of the Balance Sheet. Pending completion of
the project, no depreciation is provided on the same.
9. Accounting for the effects of changes in Foreign Currency
Transaction
a. Foreign Currency loans in respect of fixed assets are translated at
exchange rate prevalent on the last date of accounting year. Any loss
or gain arising due to foreign exchange fluctuation of the foreign
currency loan of fixed assets outstanding on the last day of the year
is charged to profit & loss account for the same year.
b. Current assets and liabilities in foreign currency outstanding at
the close for the year ended are valued at exchange rate at the close
of the year ended. The loss or gain due to fluctuation of exchange
rates is charged to Profit & Loss Account. Treatment of Forward
Contract Transactions are dealt with as per AS - 11.
10. Accounting for Government Grants
Government grants are recognized when there is reasonable assurance
that the same will received. Government grants relating to revenue are
recognized on accrual and are shown under other income. Capital grants
relating to specific fixed assets are reduced from the gross value of
the respective fixed assets and other Capital grants are treated as
Capital Reserve.
11. Accounting for Investments
Investments are classified into current investments and long term
investments, current investments are valued scrip wise, at cost or net
realizable value, whichever is lower. Long-term investments are valued
at cost.
12. Employee Benefits
a. Defined Contribution Plan
Provident Fund and Employee State Insurance Fund are defined
contribution Scheme and the contribution are charged to Profit and Loss
Account of the year when the contributions to the respective funds are
due.
b. Defined Benefit Plan
Gratuity liability for eligible employees is defined benefit obligation
and are provided for on the basis of an actuarial valuation at the end
of the each financial year.
13. Borrowing Cost
Borrowing cost that are attributable to the acquisition or construction
of qualifying assets are capitalised for the period until the asset is
ready for its intended use. All other borrowing costs are charged to
revenue.
14. Segment Reporting
The Company has only one main reportable segment i.e. Pigments.
15. Related Party Disclosure
Transactions with Key Managerial Personnel and Related Parties as
defined under Accounting Standard, other than Independent Non-
Executive Directors is disclosed as "Related Party Transactions" in the
Notes to Accounts.
16. Leases
Rentals are expensed with reference to lease terms and other
considerations.
17. Earning Per Share
The Basic and Diluted Earnings Per Share (EPS) is computed by dividing
the net profit after tax for the year by weighted average number of
equity shares outstanding during the year.
18. Tax on Income
a. Current tax is determined as the amount of tax payable to the
taxation authorities in respect of taxable income for the period.
b. Deferred tax is recognized, subject to the consideration of
prudence, on timing difference being differences between taxable income
and accounting income, that originate in one period and are capable of
reversal in one or more subsequent periods.
19. Intangible Assets
Intangible assets are stated at cost less accumulated amortization.
20. Impairment of Assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication exits,
the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as impairment loss and is recognized in the profit
and loss account.
21. Provisions, Contingent Liabilities and Contingent Assets
a. The provisions are recognized and measured by using a substantial
degree of estimation.
b. Contingent Liabilities
Disputed liabilities and claims against the Company including claims
raised by fiscal authorities (e.g. Sales Tax, Value Added Tax, Income
Tax, Excise etc.) pending in appeal / Court for which no
reliable estimate can be made of the amount of the obligation or which
are remotely poised for crystallization are not provided for in
accounts but disclosed in Notes to Accounts.
c. Contingent Assets are neither recognized nor disclosed.
22. Accounting of Derivative Financial Instruments
Presently, the Company is not engaged in Derivative Financial
Instruments. However, for derivative contracts, premium paid and
gains/losses on settlement will be charged to Profit and Loss Account.
Losses arising on the restatement of the outstanding derivative
contracts as at the year end by marking them to market will be charged
to the Profit and Loss Account.