Accounting Policies of Bhansali Engineering Polymers Ltd. Company
Mar 31, 2023
1 Corporate Information
Bhansali Engineering Polymers Limited is a Public Listed company registered in India, incorporated under the provisions of the Companies Act, 1956 and its shares are listed with NSE and BSE. The Company is engaged in manufacturing of ABS and SAN resins which is classified under the category of Highly Specialized Engineering Thermoplastics. The manufacturing facilities of the Company is located at Abu Road, Rajasthan and Satnoor, Madhya Pradesh.
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules,2015, and amendments made thereafter and the relevant provisions of the Companies Act,2013 (âthe Actâ) and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.
2 Summary of Significant Accounting Policies
(a) Basis of preparation and Measurement
The Financial statements have been prepared on an accrual basis of accounting and under the historical cost convention, except for the following:
Defined benefit plans-Plan assets are measured at fair value (refer note 40).
The Financial statements are presented in Indian Rupees (âINRâ) and all values are rounded to the nearest lakhs, except otherwise stated as per the requirement of Schedule III.
All the Assets & Liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria as set out in AS 1 and Schedule III to the said Act.
(b) Classification of Current and Non-Current
An asset is treated as current when it is:
i) Expected to be realized or intended to be sold or consumed in normal operating cycle,
ii) Held primarily for the purpose of trading,
iii) Expected to be realized within twelve months after the reporting period, or
iv) Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
i) It is expected to be settled in normal operating cycle,
ii) It is held primarily for the purpose of trading,
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to determine the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non - current.
(c) Property, plant and equipment.
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation/ amortization and impairment losses, if any. The cost comprises of the purchase price (net of GST credit wherever applicable) and any attributable cost of bringing the property, plant and equipment to its working condition for its intended use.
Subsequent expenditure related to an item of property, plant and equipment are added to its gross book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance.
The Company identifies and determines separate useful life for each major component of property, plant and equipment, if they have useful life that is materially different from that of the remaining asset.
Items such as Machinery spares is recognized in accordance with Ind AS 16 âProperty, Plant and Equipmentâ when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventories.
Property, plant and equipment not ready for the intended use on the date of Balance Sheet are disclosed as âCapital work-in-progressâ. Advances given towards acquisition of property, plant and equipmentâs outstanding at each Balance Sheet date are disclosed as Capital Advances under âOther Non Current Assetsâ.
Losses arising from the retirement of, and gains and losses arising from disposal of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the property, plant and equipment and are recognized in the statement of profit and loss when the property, plant and equipment is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
(d) Depreciation on Property, plant and equipment
Depreciation on property, plant and equipment is provided pro-rata for the period of use , using the Straight Line Method based on the respective estimate of useful life given below.
|
Class of Asset |
Useful life (In Years) |
|
Buildings |
30 - 60 Years |
|
Plant & Machinery |
25 Years |
|
Furniture & Fixtures |
10 Years |
|
Office Equipment''s and Computers |
3 - 6 Years |
|
Vehicles |
8 - 10 Years |
|
Stores & Spares |
5 Years |
|
Lease hold land is not depreciated over the useful life of the lease. |
|
(e) Intangible Assets and Amortization
Intangible assets are valued at cost less amortization and comprise mainly of computer software licenses. Amortization takes place on a straight line basis over the assets anticipated useful life. The useful life is determined based on the period over which the asset is expected to be used and generally does not exceed 5 years. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting period.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
(f) Investment in Joint Venture
Investments in joint venture is recognized at cost as per Ind AS 28.
Inventories are stated at cost or net realizable value whichever is lower. Cost include purchase price, non-refundable taxes and delivery and handling cost and all costs incurred in bringing the inventory to its present location and condition. Cost of raw materials, process chemicals, stores and spares, packing material, and other inventory is determined on weighted average basis.
Work-in-progress and finished goods stock is valued at cost or net realizable value whichever is lower. Cost of work-in progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.
(h) Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash on hand, short-term deposits with an original maturity of three months or less, 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.
(i) Retirement and other employee benefits Defined Contribution planProvident fund
The Company makes contribution to statutory provident fund in accordance with Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952. The plan is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.
Superannuation is a post-employment benefit defined contribution plan under which the Company pays specified contributions to the insurer. The Group makes specified quarterly contributions to the superannuation fund. The contribution paid or payable is recognized as an expense in the period in which the services are rendered by the employee.
The Company operates a defined benefit gratuity plan in India. The cost of providing benefits under the defined benefit plan is determined on the basis of actuarial valuation using the projected unit credit method. Gratuity fund is administered through Life Insurance Corporation of India.
Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on the net defined benefit liability are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Expense in respect of other short-term benefits is recognized on the basis of amount paid or payable for the period during which services are rendered by the employees.
(j) Foreign Currency transactions
The Companyâs financial statements are presented in INR, which is also the Companyâs Functional Currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates and recognised in the Statement of Profit and Loss.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
(k) Taxes on Income Income Tax
Income tax expense represents the sum of current tax and deferred tax and includes any adjustments related to past periods in current and /or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant year. Current income tax is based on the taxable income and calculated using the applicable tax rates.
Deferred tax is provided using the Balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes at the reporting date. The carrying amount of deferred tax assets is reviewed at the end of reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Current and deferred tax is recognised in Statement of profit or loss except to the extent that it relates to items recognised in other Comprehensive income or directly in Equity. In this case the tax is also recognised in other Comprehensive income or directly in Equity, respectively.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Revenue from contracts with customers are recognised as per Ind AS 115 when control of the goods or services are transferred to the customers at the fair value of consideration received or receivable. The Company recognizes revenue when the same can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Companyâs activities as described below. Revenue is measured at the 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.
Amounts disclosed as revenue are exclusive of GST and net of returns, trade allowances, rebates, discounts, and amounts collected on behalf of third parties.
i) Sale of goods
Sales are recognized when substantial risk and rewards of ownership are transferred to customer, In case of domestic customers, sales generally take place when goods are dispatched or delivery is handed over to the transporter. In case of export customers, sales generally take place when goods are shipped on-board based on bill of lading.
ii) Interest & Dividend Income
Interest income is recognised on time proportion basis taking into account the amount invested and rate of interest. Dividend income is recognized when the Companyâs right to receive dividend is established by the Balance Sheet date, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
ii) Revenue in respect of other claims in recognised on accrual basis to the extent the ultimate realisation is reasonably certain.
(m) Leases.
The company recognises the Right to Use for Assets taken on lease only if the Lease is of a long term duration and the underlying value of Asset is substantial in terms of Ind AS 116 Leases.
(n) Provisions
A provision is recognized when the Company has a present obligation Legal or Constructive that is reasonably estimable and it is probable that an outflow of economic benefits will be required to settle the obligation. These estimates are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
(o) Segment Reporting
The Company manufactures and sells ABS and SAN which belong to the same product group i.e. âHighly Specialized Engineering Thermoplasticsâ alongwith Trading in raw materials used for manufacturing of ABS and SAN. The product has the same risks and returns, which are predominantly governed by market conditions, namely demand and supply position. Thus, in the context of Ind AS 108 âOperating Segmentâ, issued by the Institute of Chartered Accountants of India, there is only one identified reportable segment.
(p) Earnings per Share
Basic earnings per share are calculated by dividing the net profit/ loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of diluted potential equity shares, if any.
(q) Contingent Liabilities and Assets
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements. Contingent Assets are not disclosed in the Financial Statements.
(r) Impairment Financial Assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired, if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure :
a) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18.
b) Other financial assets which are measured at amortised cost.
The Company follows simplified approach for recognition of impairment loss allowance on Trade receivables and other financial assets. The Company recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
The carrying amount of non-financial assets other than inventories are assessed at each reporting date to ascertain whether there is any indication of impairment. If any such indication exists or when annual impairment testing for an asset is required, then the assetâs recoverable amount is estimated. An impairment loss is recognised, as an expense in the Statement of Profit and Loss, for the amount by which the assetâs carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assetâs fair value less cost to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels into cash generating units for which there are separately identifiable cash flows.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment had been recognised.
Financial assets and liabilities are recognised when the company becomes a party to the contractual provisions of the instruments.
Financial AssetsInitial recognition and measurement:
Financial assets are classified into the following categories upon initial recognition:
(a) those measured at amortised cost
(b) those to be measured subsequently at fair value through Statement of Profit & Loss.
The classification depends on the entityâs business model for managing the financial assets and the contractual terms of cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income as the case may be.
All financial assets are initially recognised at fair value. Transaction costs of acquisition of financial assets carried at fair value through profit and loss are expensed in the Statement of Profit and Loss.
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured subsequently at amortised cost. Interest income from these financial assets is included in Other income using the effective interest rate method.
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset.
Financial liabilitiesInitial recognition and measurement
All financial liabilities are recognized initially at fair value. The Companyâs financial liabilities majorily comprises trade and other payables.
Financial liabilities are classified as âFinancial liabilities at fair value through profit or lossâ if they are held for trading or if they are designated as financial liabilities upon initial recognition at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit and loss.
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offsetted and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
The fair value of an asset or a liability is measured using the assumptions that the market participants would use when pricing the asset or liability.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting year.
(u) Research and Development Expenditure
Revenue expenditure on Research and Development is charged to the Statement of Profit and Loss in the year in which it is incurred and Capital Expenditure are included in Property, Plant and Equipment.
(v) Effective Amendments
Ministry of Corporate Affairs (âMCAâ) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 23rd March, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from 1st April, 2022 as below.
(i) Ind AS 103- Business Combination
The amendments specifies that to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must meet the definition of assets and liabilities in the Conceptual Framework for Financial Reporting under Ind AS(Conceptual Framework), issued by the ICAI at the acquisition date. These changes do not significantly change the requirements of Ind AS 103. The Company does not have any significant impact in this standalone and consolidated financial statements.
(ii) Ind AS 16-Property, Plant and Equipment (PPE)
The amendments clarifies that excess of net sale proceeds of items produced over the cost of testing while preparing the asset for its intended use (if any), shall not be recognise in the profit or loss but deducted from the directly attributable cost considered as part of cost of an item PPE. The Company has evaluated the amendment and there is no impact in recognition of its property, plant and equipment on its standalone and consolidated financial statements
(iii) Ind AS 37-Provisions, Contingent Liabilities and Contingent Assets
The amendments specify that the âcost of fulfilling â a contract comprises the âcosts that relate directly to the contractâ. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfiling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The amendment is essentially a clarification and the Company does not have any significant impact in its standalone and consolidated financial statements.
(iv) Ind AS 109-Financial Instruments
The amendment clarifies which fees an entity includes when it applies the â10 percentâ test of Ind AS 109 in assessing whether to derecognise a financial liability or to consider as modification of existing financial liability. The Company does not have any significant impact in its standalone financial statements.
3 Use of Judgmentâs, Estimates and Assumptions
The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Difference between actual results and estimates are recognised in the periods in which the results are known / materialise. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances existing when the financial statements were prepared. The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates is recognised in the year in which the estimates are revised .
In the process of applying the Companyâs accounting policies, management has made the following judgements which have a significant effect on the amounts recognised in the financial statements:
Defined benefit plans (Gratuity and Leave encashment benefits)
The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation and Leave encashment are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Useful life of Property, plant and equipment
The Company reviews the useful life of Property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expenses in the future years.
Mar 31, 2022
1. Corporate Information
Bhansali Engineering Polymers Limited is a Public Listed company registered in India, incorporated under the provisions of the Companies Act, 1956 and its shares are listed with NSE and BSE. The company is engaged in manufacturing of ABS and SAN resins which is classified under the category of Highly Specialized Engineering Thermoplastics. The manufacturing facilities of the company is located at Abu Road, Rajasthan and Satnoor, Madhya Pradesh.
The financial statements of the company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules,2015, and amendments made thereafter and the relevant provisions of the Companies Act,2013 (âthe Actâ) and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.
2. Summary of Significant Accounting Policies
(a) Basis of preparation and Measurement
The Financial statements have been prepared on an accrual basis of accounting and under the historical cost convention, except for the following:
Defined benefit plans-Plan assets are measured at fair value (refer note 38).
The Financial statements are presented in Indian Rupees (âINRâ) and all values are rounded to the nearest lakhs, except otherwise stated as per the requirement of Schedule III.
All the Assets & Liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria as set out in AS 1 and Schedule III to the said Act.
(b) Classification of Current and Non-Current
An asset is treated as current when it is:
i) Expected to be realized or intended to be sold or consumed in normal operating cycle,
ii) Held primarily for the purpose of trading,
iii) Expected to be realized within twelve months after the reporting period, or
iv) Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
i) It is expected to be settled in normal operating cycle,
ii) It is held primarily for the purpose of trading,
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to determine the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non - current.
(c) Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation/ amortization and impairment losses, if any. The cost comprises of the purchase price (net of GST credit wherever applicable) and any attributable cost of bringing the property, plant and equipment to its working condition for its intended use.
Subsequent expenditure related to an item of property, plant and equipment are added to its gross book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance.
The Company identifies and determines separate useful life for each major component of property, plant and equipment, if they have useful life that is materially different from that of the remaining asset.
I tems such as Machinery spares is recognized in accordance with Ind AS 16 âProperty, Plant and Equipmentâ when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventories.
Property, plant and equipment not ready for the intended use on the date of Balance Sheet are disclosed as âCapital work-in-progressâ. Advances given towards acquisition of property, plant and equipmentâs outstanding at each Balance Sheet date are disclosed as Capital Advances under âOther Non Current Assetsâ.
Losses arising from the retirement of, and gains and losses arising from disposal of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the property, plant and equipment and are recognized in the statement of profit and loss when the property, plant and equipment is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
(d) Depreciation on Property, plant and equipment
Depreciation on property, plant and equipment is provided pro-rata for the period of use, using the Straight Line Method based on the respective estimate of useful life given below.
|
Class of Asset |
Useful life (In Years) |
|
Buildings |
30 - 60 Years |
|
Plant & Machinery |
25 Years |
|
Furniture & Fixtures |
10 Years |
|
Office Equipmentâs and Computers |
3 - 6 Years |
|
Vehicles |
8 - 10 Years |
|
Stores & Spares |
5 Years |
Lease hold land is not depreciated over the useful life of the lease.
(e) Intangible Assets and Amortization
I ntangible assets are valued at cost less amortization and comprise mainly of computer software licenses. Amortization takes place on a straight line basis over the assets anticipated useful life. The useful life is determined based on the period over which the asset is expected to be used and generally does not exceed 5 years. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting period. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
(f) Investment in Joint Venture
Investments in joint venture is recognized at cost as per Ind AS 28.
(g) Inventories
Inventories are stated at cost or net realizable value whichever is lower. Cost include purchase price, non-refundable taxes and delivery and handling cost and all costs incurred in bringing the inventory to its present location and condition. Cost of raw materials, process chemicals, stores and spares, packing material, and other inventory is determined on weighted average basis.
Work-in-progress and finished goods stock is valued at cost or net realizable value whichever is lower. Cost of work-in progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.
(h) Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash on hand, short-term deposits with an original maturity of three months or less, 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.
(i) Retirement and other employee benefits Defined Contribution planProvident fund
The Company makes contribution to statutory provident fund in accordance with Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952. The plan is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.
Superannuation is a post-employment benefit defined contribution plan under which the Group pays specified contributions to the insurer. The Group makes specified quarterly contributions to the superannuation fund. The contribution paid or payable is recognized as an expense in the period in which the services are rendered by the employee.
The Company operates a defined benefit gratuity plan in India. The cost of providing benefits under the defined benefit plan is determined on the basis of actuarial valuation using the projected unit credit method. Gratuity fund is administered through Life Insurance Corporation of India.
Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on the net defined benefit liability are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through oCi in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Expense in respect of other short-term benefits is recognized on the basis of amount paid or payable for the period during which services are rendered by the employees.
(j) Foreign Currency transactions
The Companyâs financial statements are presented in INR, which is also the Companyâs Functional Currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates and recognised in the Statement of Profit and Loss.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
(k) Taxes on Income Income Tax
I ncome tax expense represents the sum of current tax and deferred tax and includes any adjustments related to past periods in current and /or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant year. Current income tax is based on the taxable income and calculated using the applicable tax rates.
Deferred tax is provided using the Balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes at the reporting date. The carrying amount of deferred tax assets is reviewed at the end of reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Current and deferred tax is recognised in Statement of profit or loss except to the extent that it relates to items recognised in other Comprehensive income or directly in Equity. In this case the tax is also recognised in other Comprehensive income or directly in Equity, respectively.
Deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
(l) Revenue Recognition
Revenue from contracts with customers are recognised as per Ind AS 115 when control of the goods or services are transferred to the customers at the fair value of consideration received or receivable. The Company recognizes revenue when the same can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Companyâs activities as described below. Revenue is measured at the 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.
Amounts disclosed as revenue are exclusive of GST and net of returns, trade allowances, rebates, discounts, and amounts collected on behalf of third parties.
i) Sale of goods
Sales are recognized when substantial risk and rewards of ownership are transferred to customer, In case of domestic customers, sales generally take place when goods are dispatched or delivery is handed over to the transporter. In case of export customers, sales generally take place when goods are shipped on-board based on bill of lading.
ii) Interest & Dividend Income
Interest income is recognised on time proportion basis taking into account the amount invested and rate of interest. Dividend income is recognized when the Companyâs right to receive dividend is established by the Balance Sheet date, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
iii) Revenue in respect of other claims in recognised on accrual basis to the extent the ultimate realisation is reasonably certain.
The company recognises the Right to Use for Assets taken on lease only if the Lease is of a long term duration and the underlying value of Asset is substantial in terms of Ind AS 116 Leases.
A provision is recognized when the Company has a present obligation Legal or Constructive that is reasonably estimable and it is probable that an outflow of economic benefits will be required to settle the obligation. These estimates are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
I f the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
The Company manufactures and sells ABS and SAN which belong to the same product group i.e. âHighly Specialized Engineering Thermoplasticsâ alongwith Trading in raw materials used for manufacturing of ABS and SAN. The product has the same risks and returns, which are predominantly governed by market conditions, namely demand and supply position. Thus, in the context of Ind AS 108 âOperating Segmentâ, issued by the Institute of Chartered Accountants of India, there is only one identified reportable segment.
Basic earnings per share are calculated by dividing the net profit/loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of diluted potential equity shares, if any.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
(r) Impairment Financial Assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired, if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.
I n accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18.
b) Other financial assets which are measured at amortised cost.
The Company follows simplified approach for recognition of impairment loss allowance on Trade receivables and other financial assets. The Company recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
The carrying amount of non-financial assets other than inventories are assessed at each reporting date to ascertain whether there is any indication of impairment. If any such indication exists or when annual impairment testing for an asset is required, then the assetâs recoverable amount is estimated. An impairment loss is recognised, as an expense in the Statement of Profit and Loss, for the amount by which the assetâs carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an assetâs fair value less cost to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels into cash generating units for which there are separately identifiable cash flows.
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment had been recognised.
Financial assets and liabilities are recognised when the company becomes a party to the contractual provisions of the instruments.
Initial recognition and measurement:
Financial assets are classified into the following categories upon initial recognistion:
(a) those measured at amortised cost
(b) those to be measured subsequently at fair value through Statement of Profit & Loss.
The classification depends on the entityâs business model for managing the financial assets and the contractual terms of cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income as the case may be.
All financial assets are initially recognised at fair value. Transaction costs of acquisition of financial assets carried at fair value through profit and loss are expensed in the Statement of Profit and Loss.
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured subsequently at amortised cost. Interest income from these financial assets is included in Other income using the effective interest rate method.
Derecognistion:
The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset.
Initial recognition and measurement
All financial liabilities are recognized initially at fair value. The companyâs financial liabilities majorily comprises trade and other payables.
Financial liabilities are classified as âFinancial liabilities at fair value through profit or lossâ if they are held for trading or if they are designated as financial liabilities upon initial recognition at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offsetted and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
The fair value of an asset or a liability is measured using the assumptions that the market participants would use when pricing the asset or liability.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing 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 recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting year.
(u) Research and Development Expenditure
Revenue expenditure on Research and Development is charged to the Statement of Profit and Loss in the year in which it is incurred and Capital Expenditure are included in Property, Plant and Equipment.
3. Use of Judgmentâs, Estimates and Assumptions
The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Difference between actual results and estimates are recognised in the periods in which the results are known / materialise. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances existing when the financial statements were prepared. The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates is recognised in the year in which the estimates are revised.
I n the process of applying the companyâs accounting policies, management has made the following judgements which have a significant effect on the amounts recognised in the financial statements:
Defined benefit plans (Gratuity and Leave encashment benefits)
The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation and Leave encashment are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Useful life of Property, plant and equipment
The company reviews the useful life of Property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expenses in the future years.
Mar 31, 2018
(a) Classification of Current and Non-Current
An asset is treated as current when it is:
i) Expected to be realized or intended to be sold or consumed in normal operating cycle,
ii) Held primarily for the purpose of trading,
iii) Expected to be realized within twelve months after the reporting period, or
iv) Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
i) It is expected to be settled in normal operating cycle,
ii) It is held primarily for the purpose of trading,
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to determine the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non - current.â
(b) Property, plant and equipment.
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation/ amortization and impairment losses, if any. The cost comprises of the purchase price (net of GST credit wherever applicable) and any attributable cost of bringing the property, plant and equipment to its working condition for its intended use.
Subsequent expenditure related to an item of property, plant and equipment are added to its gross book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance.
The Company identifies and determines separate useful life for each major component of property, plant and equipment, if they have useful life that is materially different from that of the remaining asset.
The Company has estimated that there would not be any significant decommissioning cost at the time of disposal of property, plant and equipment.
Items such as Machinery spares is recognized in accordance with Ind AS 16 ââProperty, Plant and Equipmentââ when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventories.
Property, plant and equipment not ready for the intended use on the date of Balance Sheet are disclosed as ââCapital work-in-progressââ. Advances given towards acquisition of property, plant and equipmentâs outstanding at each Balance Sheet date are disclosed as Capital Advances under ââOther Non Current Assetsââ.
Losses arising from the retirement of, and gains and losses arising from disposal of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the property, plant and equipment and are recognized in the statement of profit and loss when the property, plant and equipment is derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.â
(c) Depreciation on Property, plant and equipment
Depreciation on property, plant and equipment is provided pro-rata for the period of use , using the Straight Line Method except in case of Plant & machinery (Other than continuous process plant) where depreciation is provided on Written Down Value Method based on the respective estimate of useful life given below.
Lease hold land is not depreciated over the useful life of the lease.
(d) Intangible Assets and Amortization
Intangible assets are valued at cost less amortization and comprise mainly of computer software licenses. Amortization takes place on a straight line basis over the assets anticipated useful life. The useful life is determined based on the period over which the asset is expected to be used and generally does not exceed 5 years. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting period. Gains orlosses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
(e) Investment in Joint Venture
Investments in joint venture is recognized at cost as per Ind AS 27. Upon first-time adoption of Ind AS, the Company has elected to measure its investments in joint ventures at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2016.
(f) Inventories
Inventories are stated at cost or net realizable value whichever is lower. Cost include purchase price, non-refundable taxes and delivery and handling cost and all costs incurred in bringing the inventory to its present location and condition. Cost of raw materials, process chemicals, stores and spares, packing material, and other inventory is determined on weighted average basis.
Work-in-progress and finished goods stock is valued at cost or net realizable value whichever is lower. Cost of work-in progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.
(g) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits.
(h) Retirement and other employee benefits
Companyâs contributions paid/payable during the year to Provident Fund, ESIC, Labour Welfare Fund and Superannuation Fund are recognised in the Statement of Profit & Loss. Remeasurements, comprising of actuarial gains and losses are recognised immediately in the Balance sheet with a corresponding charge or credit to âOther comprehensive incomeâ in the year in which they occur . Remeasurements are not reclassified subsequently to the Statement of Profit and Loss. Net interest is calculated by applying the discount rate to the net defined liability or asset. The company recognises Service costs and Net interest expense or income in the statement of profit and loss.
(i) Foreign Currency transactions
The Companyâs financial statements are presented in INR, which is also the Companyâs Functional Currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.Foreign exchange gains and losses resulting from the settlement of such transcations and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates and recogoised in the Statement of Profit and Loss.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
(j) Taxes on Income Current Tax
Income tax expense represents the sum of current tax and deferred tax and includes any adjustments related to past periods in current and /or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant year.Current income tax is based on the taxable income and calculated using the applicable tax rates.
Deferred Tax
Deferred tax is provided using the Balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes at the reporting date. The carrying amount of deferred tax assets is reviewed at the end of reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
(k) Revenue Recognition.
Revenue is recognised to the extent 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. The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Companyâs activities as described below. Revenue is measured at the 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.
Amounts disclosed as revenue are inclusive of excise duty and net of returns, trade allowances, rebates, discounts, loyalty discount, GST and amounts collected on behalf of third parties.
i) Sale of goods
Sales are recognized when substantial risk and rewards of ownership are transferred to customer, In case of domestic customer, generally sales take place when goods are dispatched or delivery is handed over to transporter, in case of export customers, generally sales take place when goods are shipped on-board based on bill of lading.
ii) Interest & Dividend Income
Interest income is included in other income in the statement of profit and loss. Dividend income is recognized when the Companyâs right to receive dividend is established by the Balance Sheet date, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
(l ) Excise Duty
Under Ind AS, excise duty is included in sale of goods and is separately presented as expense on the face of Statement of Profit and Loss.
(m) Leases
Leases in which a substantial portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments and receipts under such leases are recognised to the Statement of Profit and Loss on a straight-line basis over the term of the lease unless the lease payments to the lessor are structured to increase in line with expected general inflation
(n) Provisions
A provision is recognized when the Company has a present obligation Legal or Constructive that is reasonably estimable and it is probable that an outflow of economic benefits will be required to settle the obligation.
These estimates are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
(o) Segment Reporting
The Company manufactures and sells ABS and SAN which belong to the same product group i.e. âHighly Specialized Engineering Thermoplasticsâ. The product has the same risks and returns, which are predominantly governed by market conditions, namely demand and supply position. Thus, in the context of Indian Accounting Standard 108 âOperating Segmentâ, issued by the Institute of Chartered Accountants of India, there is only one identified reportable segment.
(p) Earnings per Share
Basic earnings per share are calculated by dividing the net profit/ loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year
For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of diluted potential equity shares, if any.
(q) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
(r) Borrowing Costs
Borrowing costs directly attributable to the acquisition and construction of an asset which takes a substantial period of time to get ready for its intended use, are capitalized as a part of the cost of such assets, until such time the asset is substantially ready for its intended use. All other borrowing costs are recognized in the Statement of Profit and Loss in the year in which they occur. Borrowing costs consist of interest and other costs incurred in connection with borrowing of funds.
(s) Trade Receivables
Trade Receivables are recognised initially at fair value and subsequently measured at amortised cost , less provision for impairment.
(t) Financial Instruments
Financial assets and liabilities are recognised when the company becomes a party to the contractual provisions of the instruments.
Financial Assets: Initial recognition and measurement:
All financial assets are initially recognised at fair value. Transaction costs of acquisition of financial assets carried at Fair value through profit or loss are expensed in the Statement of profit and loss. Financial assets are classified, at initial recognition and subsequent measurements ,as financial assets at fair value or as financial assets measured at amortised cost.
A financial asset is measued at amortised cost less impairment, if the objective of the companyâs business model is to hold the financial asset to collect the contractual cash flows.
Impairment of financial assets:
The company assesses on a forward basis the expected credit losses associated with its financial assets carried at amortised cost. For trade receivables , the company applies the simplified approach permitted by Ind AS 109 Financial instruments, which requires expected credit losses to be recognised from initial recognition of the receivables.
Derecognition:
The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset.
Financial liabilities: Initial recognition and measurement
All financial liabilities are recognized initially at fair value . The companyâs financial liabilities include trade and other payables.
Financial liabilities are classified as âFinancial liabilities at fair value through profit or lossâ if they are held for trading or if they are designated as financial liabilities upon initial recognition at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offseted and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
(u) Fair Value Measurement
The fair value of an asset or a liability is measured using the assumptions that the market participants would use when pricing the asset or liability.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.â
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting year.
Mar 31, 2017
(a) Basis of preparation of financial statements
The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles (GAAP) in India, on an accrual basis and under the historical cost convention,to comply in all material aspects, with the applicable accounting principles in India, mandatory Accounting Standards prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. All the Assets & Liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria as set out in the schedule III to the said Act.
(b) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year. Differences between the actual results and estimates are recognized in the period in which the results are known/materialised.
(c) Revenue Recognition
(i) The Company recognizes sale at the point of dispatch of goods to the customers, which in when substantial risks and rewards of ownership are passed to the customers and are stated net of trade discounts, rebates, sales tax and value added Tax.
(ii) Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
(iii) Dividend income is recognized when the right to receive payment is established.
(iv) Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable.
(d) Fixed Assets & Depreciation
(a) Tangible Assets & Depreciation
(i) Tangible Assets are stated at cost of acquisition/construction less accumulated depreciation. All cost including financing cost attributable to the fixed assets to bring the assets to their intended use are capitalised.
(ii) Depreciation on Fixed Assets is provided on the Straight Line Method (SLM) except in case of Plant & machinery (Other than continuous process plant) where depreciation is provided on Written Down Value Method (WDV). Depreciation is provided based on the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
(iii) Cost of leasehold land is not amortised over the lease period.
(iv) Depreciation on the assets purchased/ sold during the year has been provided on a pro-rata basis.
(b) Intangible assets and amortization
Intangible assets are valued at cost less amortization and comprise mainly of computer software licenses. Amortization takes place on a straight line basis over the assets anticipated useful life. The useful life is determined based on the period over which the asset is expected to be used and generally does not exceed 5 years.
(e) Valuation of Inventories
(i) Inventories are stated at moving weighted average cost or net realisable value whichever is lower. Cost include purchase price, non-refundable taxes and delivery and handling cost and all costs incurred in bringing the inventory to its present location and condition. Cost of raw materials, process chemicals, stores and spares, packing material, and other inventory is determined on moving weighted average basis.
(ii) Finished goods and work in progress include cost of conversion and other costs.
(f) Employee benefits
(i) Defined Contribution Plan
Companyâs contributions paid/payable during the year to Provident Fund, ESIC, Labour Welfare Fund and Superannuation Fund are recognised in the Statement of Profit & Loss.
(ii) Defined benefit plan
The companyâs liabilities towards gratuity and leave encashment, a defined benefit obligation, is accrued and provided for on the basis of actuarial valuation, using the projected unit credit method as at the Balance Sheet date.
(g) Foreign Currency Transactions
(i) Foreign currency transactions are recorded at the exchange rate prevailing at the time of the transaction and exchange difference, if any, on settlement of transaction is recognised in the Statement of Profit & Loss.
(ii) Amounts of foreign currency transactions remaining pending at the year end are recorded at the exchange rate prevailing at that time.
(iii) All exchange differences arising on settlement/conversion on foreign currency transactions are included in the Statement of Profit and Loss.
(h) Borrowing Cost
Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalised as a part of the cost of these capitalised assets, upto the date when such assets is ready for its intended use. Borrowing costs on working capital is charged to the statement of Profit and Loss for the year.
(i) Investments
Long Term Investments (Non-Current) are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.
(j) Excise Duty
Cenvat is accounted as per exclusive method of accounting in terms of Accounting Standard - 2 on Valuation of Inventories, issued by the Institute of Chartered Accountants of India.
(k) Taxation
(i) Tax expense comprises of Current and Deferred Tax. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.
(ii) Deferred tax is recognised, subject to consideration of prudence on timing difference, being the difference between the taxable and accounting income/expenditure that originate in one year and are capable of reversal in one or more subsequent year(s). Deferred tax assets are not recognised unless there is virtual certainty that sufficient future taxable income will be available, against which such deferred tax asset will realise.
(l) Leased Assets
Assets acquired under finance lease, if any, which effectively transfer to the Company all the risks and benefits are disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability (m) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
(n) 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 exists, the company estimates the recoverable amount of the asset. If such recoverable amount of asset or the recoverable amount of 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 an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.
Mar 31, 2014
(a) Basis of Accounting
The financial statements have been prepared on an accrual basis and
under the historical cost convention, modified by revaluation of fixed
assets to comply in all material aspects, with the applicable
accounting principles in India, mandatory Accounting Standards notified
by the Companies (Accounting Standards) Rule, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956.
All the assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in Schedule VI to the Companies Act,1956.Based on the
nature of products and the time between the acquisition of assets for
processing and their realisation in cash & cash equivalents, the
company has ascertained its operating cycle as 12 months for the
purpose of current/ non-current classification of assets and
liabilities.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
(c) Revenue Recognition
(i) The Company recognizes sale at the point of dispatch of goods to
the customers. Sales are stated exclusive of Excise duty, Sales tax and
are net of sales return and trade discount.
(ii) Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
(d) Fixed Assets & Depreciation
(a) Tangible Assets & Depreciation
(i) The Fixed Assets are stated at cost of acquisition/construction and
includes amounts added on revaluation , wherever assets are revalued,
less accumulated depreciation. All cost including financing cost
attributable to the fixed assets to bring the assets to their intended
use are capitalised.
(ii) Depreciation on plant and machinery (other than continuous process
plant) has been calculated on the written down value method at the
rates specified in Schedule XIV to the Companies Act, 1956.
(iii) Depreciation on all other assets, other than leasehold land and
Intangibles including continuous process plant, has been calculated on
the straight line method at the rates specified in Schedule XIV to the
Companies Act, 1956.
(iv) Cost of leasehold land is not amortised over the lease period.
(v) Depreciation on the assets purchased/ sold during the year has been
provided on a pro-rata basis.
(b) Intangible assets and amortization:- Intangible assets are valued
at cost less amortization and comprise mainly of computer software
licenses. Amortization takes place on a straight line basis over the
assets anticipated useful life. The useful life is determined based on
the period over which the intangible asset is expected to be used and
generally does not exceed 5 years.
(e) Valuation of Inventories
(i) Inventories are stated at cost or net realisable value whichever is
lower. Cost include purchase price, non refundable taxes and delivery
and handling cost and all costs incurred in bringing the inventory to
its present location and condition. Cost of raw materials, process
chemicals, stores and spares , packing material, and other inventory is
determined on weighted average basis.
(ii) Finished goods and work in progress include cost of conversion and
other costs.
(f) Employee benefts
(i) Defined Contribution Plan
Company''s contributions paid/payable during the year to Provident Fund,
ESIC, Labour Welfare Fund and Superannuation Fund are recognised in the
Profit & Loss Account.
(ii) Defined benefit plan
The company''s liabilities towards gratuity and leave encashment, a
defined benefit obligation, is accrued and provided for on the basis of
actuarial valuation, using the projected unit credit method as at the
Balance Sheet date.
(g) Foreign Currency Transactions
(i) Foreign currency transactions are recorded at the exchange rate
prevailing at the time of the transaction and exchange difference, if
any, on settlement of transaction is recognised in the Profit & Loss
Account.
(ii) Amounts of foreign currency transactions remaining pending at the
year end are recorded at the exchange rate prevailing at that time.
(iii) All exchange differences arising on settlement/conversion on
foreign currency transactions are included in the Profit and Loss
Account.
(h) Borrowing Cost
Borrowing costs attributable to acquisition and/or construction of
qualifying assets are capitalised as a part of the cost of these
capitalised assets, up to the date when such assets is ready for its
intended use. Borrowing costs on working capital is charged to Profit
and Loss Account for the year.
(i) Excise Duty
Cenvat is accounted as per exclusive method of accounting in terms of
Accounting Standard  2 on Valuation of Inventories, issued by the
Institute of Chartered Accountants of India.
(j) Taxation
(i) Tax expense comprises of Current and Deferred Tax. Current Income
Tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income Tax Act, 1961.
(ii) Deferred tax is recognised, subject to consideration of prudence
on timing difference, being the difference between the taxable and
accounting income/expenditure that originate in one year and are
capable of reversal in one or more subsequent year(s). Deferred tax
assets are not recognised unless there is virtual certainty that
sufficient future taxable income will be available, against which such
deferred tax asset will realise.
(k) Leased Assets
Assets acquired under finance lease, if any, which effectively transfer
to the Company all the risks and benefits are disclosed as leased
assets. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of
interest on the remaining balance of the liability.
(l) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
(m) 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
exists, the company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less then its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognized in the
Profit and Loss account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable is reassessed and the asset is reflected at the
recoverable amount.
Mar 31, 2013
(a) Basis of Accounting
The financial statements have been prepared to comply in all material
aspects with applicable accounting principles in India'' mandatory
Accounting Standards notified by the Companies (Accounting Standards)
Rule'' 2006 (as amended) and the relevant provisions of the Companies
Act'' 1956.The financial statements are prepared under historical cost
convention modified by revaluation of fixed assets. For recognition of
Income and Expenses'' mercantile system of accounting is followed.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year. Although these estimates are based upon managementÂs best
knowledge of current events and actions'' actual results could differ
from these estimates.
(c) Revenue Recognition
(i) The Company recognizes sale at the point of dispatch of goods to
the customers. Sales are stated exclusive of Excise duty'' Sales tax and
are net of sales return and trade discount.
(ii) Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
(d) Fixed Assets & Depreciation
(a) Tangible Assets & Depreciation
(i) The Fixed Assets are stated at cost of acquisition/construction and
includes amounts added on revaluation'' wherever assets are revalued''
less accumulated depreciation. All cost including financing cost
attributable to the fixed assets to bring the assets to their intended
use are capitalised.
(ii) Depreciation on plant and machinery (other than continuous process
plant) has been calculated on the written down value method at the
rates specified in Schedule XIV to the Companies Act'' 1956.
(iii) Depreciation on all other assets'' other than leasehold land and
Intangibles including continuous process plant'' has been calculated on
the straight line method at the rates specified in Schedule XIV to the
Companies Act'' 1956.
(iv) Cost of leasehold land is not amortised over the lease period.
(v) Depreciation on the assets purchased/ sold during the year has been
provided on a pro-rata basis.
(b) Intangible Assets and Amortization:- Intangible assets are valued
at cost less amortization and comprise mainly of computer software
licenses. Amortization takes place on a straight line basis over the
assets anticipated useful life. The useful life is determined based on
the period over which the intangible asset is expected to be used and
generally does not exceed 5 years.
(e) Valuation of Inventories
(i) Inventories are stated at cost or net realisable value whichever is
lower. Cost include purchase price'' non refundable taxes and delivery
and handling cost and all costs incurred in bringing the inventory to
its present location and condition. Cost of raw materials'' process
chemicals'' stores and spares '' packing material'' and other inventory is
determined on weighted average basis.
(ii) Finished goods and work in progress include cost of conversion and
other costs.
(f) Employee benefts
(i) Defned Contribution Plan
CompanyÂs contributions paid/payable during the year to Provident Fund''
ESIC'' Labour Welfare Fund and Superannuation Fund are recognised in the
Profit & Loss Account.
(ii) Defned beneft plan
The companyÂs liabilities towards gratuity and leave encashment'' a
defined benefit obligation'' is accrued and provided for on the basis of
actuarial valuation'' using the projected unit credit method as at the
Balance Sheet date.
(g) Foreign Currency Transactions
(i) Foreign currency transactions are recorded at the exchange rate
prevailing at the time of the transaction and exchange difference'' if
any'' on settlement of transaction is recognised in the Profit & Loss
Account.
(ii) Amounts of foreign currency transactions remaining pending at the
year end are recorded at the exchange rate prevailing at that time.
(iii) All exchange differences arising on settlement/conversion on
foreign currency transactions are included in the Profit and Loss
Account.
(h) Borrowing Cost
Borrowing costs attributable to acquisition and/or construction of
qualifying assets are capitalised as a part of the cost of these
capitalised assets'' up to the date when such assets is ready for its
intended use. Borrowing costs on working capital is charged to Profit
and Loss Account for the year.
(i) Excise Duty
Cenvat is accounted as per exclusive method of accounting in terms of
Accounting Standard  2 on Valuation of Inventories'' issued by the
Institute of Chartered Accountants of India.
(j) Taxation
(i) Tax expense comprises of Current and Deferred Tax. Current Income
Tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income Tax Act'' 1961.
(ii) Deferred tax is recognised'' subject to consideration of prudence
on timing difference'' being the difference between the taxable and
accounting income/expenditure that originate in one year and are
capable of reversal in one or more subsequent year(s). Deferred tax
assets are not recognised unless there is virtual certainty that
sufficient future taxable income will be available'' against which such
deferred tax asset will realise.
(k) Leased Assets
Assets acquired under finance lease'' if any'' which effectively transfer
to the Company all the risks and benefits are disclosed as leased
assets. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of
interest on the remaining balance of the liability.
(l) Provisions'' Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
(m) 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
exists'' the company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less then its carrying
amount'' the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognized in the
Profit and Loss account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists'' the recoverable is reassessed and the asset is reflected at the
recoverable amount.
Mar 31, 2012
(a) Basis of Accounting
The financial statements have been prepared to comply in all material
aspects with applicable accounting principles in India, mandatory
Accounting Standards notified by the Companies (Accounting Standards)
Rule, 2006 (as amended) and the relevant provisions of the Companies
Act, 1956.The financial statements are prepared under historical cost
convention modified by revaluation of fixed assets. For recognition of
Income and Expenses, mercantile system of accounting is followed.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates.
(c) Revenue Recognition
(i) The Company recognizes sale at the point of dispatch of goods to
the customers. Sales are stated exclusive of Excise duty, Sales tax and
are net of sales return and trade discount.
(ii) 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.
(d) Fixed Assets & Depreciation
(a) Tangible Assets & Depreciation
(i) The Fixed Assets are stated at cost of acquisition/construction and
includes amounts added on revaluation less accumulated depreciation.
All cost including financing cost attributable to the fixed assets to
bring the assets to their intended use are capitalized.
(ii) Depreciation on plant and machinery (other than continuous process
plant) has been calculated on the written down value method at the
rates specified in Schedule XIV to the Companies Act, 1956.
(iii) Depreciation on all other assets, other than leasehold land and
Intangibles including continuous process plant, has been calculated on
the straight line method at the rates specified in Schedule XIV to the
Companies Act, 1956.
(iv) Cost of leasehold land is not amortized over the lease period.
(v) Depreciation on the assets purchased/ sold during the year has been
provided on a pro-rata basis.
(b) Intangible assets and amortization:-
Intangible assets are valued at cost less amortization and comprise
mainly of computer software licenses. Amortization takes place on a
straight line basis over the assets anticipated useful life. The useful
life is determined based on the period over which the intangible asset
is expected to be used and generally does not exceed 5 years.
(e) Valuation of Inventories
(i) Inventories are stated at cost or net realizable value whichever is
lower. Cost include purchase price, nonrefundable taxes and delivery
and handling cost and all costs incurred in bringing the inventory to
its present location and condition. Cost of raw materials, process
chemicals, stores and spares , packing material, and other inventory
determined on weighted average basis.
(ii) Finished goods and work in progress include cost of conversion and
other costs.
(f) Employee benefits
(i) Defined Contribution Plan
Company's contributions paid/payable during the year to Provident Fund,
ESIC, Lab our Welfare Fund and Superannuation Fund are recognized in the
Profit & Loss Account.
(ii) Defined benefit plan
The company's liabilities towards gratuity and leave encashment, a
defined benefit obligation, is accrued and provided for on the basis of
actuarial valuation, using the projected unit credit method as at the
Balance Sheet date.
Notes forming Part of the Financial Statement
(g) Foreign Currency Transactions
(i) Foreign currency transactions are recorded at the exchange rate
prevailing at the time of the transaction and exchange difference, if
any, on settlement of transaction is recognized in the Profit & Loss
Account.
(ii) Amounts of foreign currency transactions remaining pending at the
year end are recorded at the exchange rate prevailing at that time.
(iii) All exchange differences arising on settlement/conversion on
foreign currency transactions are included in the Profit and Loss
Account.
(iv) In respect of transactions covered by forward exchange contracts,
the difference between the forward rate and the exchange rate at the
date of transaction is recognized as income or expense over the life of
the contract. Forward exchange contracts outstanding as at the balance
sheet date are stated at their fair values and gains or losses are
recognized in the Profit and Loss Account as exchange differences.
(h) Borrowing Cost
Borrowing costs attributable to acquisition and/or construction of
qualifying assets are capitalized as a part of the cost of these
capitalized assets, up to the date when such assets is ready for its
intended use. Borrowing costs on working capital is charged to Profit
and Loss Account for the year.
(i) Excise Duty
Cenvat is accounted as per exclusive method of accounting in terms of
Accounting Standard - 2 on Valuation of Inventories, issued by the
Institute of Chartered Accountants of India.
(j) Taxation
(i) Tax expense comprises of Current and Deferred Tax. Current Income
Tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income Tax Act, 1961.
(ii) Deferred tax is recognized, subject to consideration of prudence
on timing difference, being the difference between the taxable and
accounting income/expenditure that originate in one year and are
capable of reversal in one or more subsequent year(s). Deferred tax
assets are not recognized unless there is virtual certainty that
sufficient future taxable income will be available, against which such
deferred tax asset will realize.
(k) Leased Assets
Assets acquired under finance lease, which effectively transfer to the
Company all the risks and benefits are disclosed as leased assets.
Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of
interest on the remaining balance of the liability.
(l) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
(m) 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
exists, the company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of 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 an impairment loss and is recognized in the
Profit and Loss account. If at the balance sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable is reassessed and the asset is reflected at the
recoverable amount
Mar 31, 2011
(a) Basis of Accounting
The financial statements are prepared under historical cost convention
modified by revaluation of fixed assets and in accordance with the
requirements of the Companies Act, 1956 and comply with the Accounting
Standards issued by the Institute of Chartered Accountants of India to
the extent applicable. For recognition of Income and Expenses,
mercantile system of accounting is followed.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates.
(c) Revenue Recognition
(i) The Company recognises sale at the point of despatch of goods to
the customers. Sales are stated exclusive of Excise duty, Sales tax and
are net of sales return and trade discount.
(ii) Customs duty benefits in the form of advance license entitlements
are recognised on export of goods and are set off from material costs.
(d) Fixed Assets & Depreciation
(i) The Fixed Assets are stated at cost of acquisition/construction and
includes amounts added on revaluation less accumulated depreciation.
All cost including financing cost attributable to the fixed assets to
bring the assets to their intended use are capitalised.
(ii) Depreciation on plant and machinery (other than continuous process
plant) has been calculated on the written down value method at the
rates specified in Schedule XIV to the Companies Act, 1956.
(iii) Depreciation on all other assets, other than leasehold land
including continuous process plant, has been calculated on the straight
line method at the rates specified in Schedule XIV to the Companies
Act, 1956.
(iv) Cost of leasehold land is not amortised over the lease period.
(v) Depreciation on the assets purchased/ sold during the year has been
provided on a pro-rata basis.
(e) Valuation of Inventories
(i) Inventories are valued at cost except for finished goods which are
valued at lower of cost or net estimated realizable value.
(ii) Cost of inventories is computed on Weighted Average basis.
(iii) Finished goods and work in progress include cost of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
(f) Employee benefits
(i) Defined Contribution Plan: Company's contributions paid/payable
during the year to Provident Fund, ESIC, Labour Welfare Fund and
Superannuation Fund are recognised in the Profit & Loss Account.
(ii) Defined benefit plan: The company's liabilities towards gratuity
and leave encashment, a defined benefit obligation, is accrued and
provided for on the basis of actuarial valuation, using the projected
unit credit method as at the Balance Sheet date.
(g) Foreign Currency Transactions
(i) Foreign currency transactions are recorded at the exchange rate
prevailing at the time of the transaction and exchange difference, if
any, on settlement of transaction is recognised in the Profit & Loss
Account.
(ii) Amounts of foreign currency transactions remaining pending at the
year end are recorded at the exchange rate prevailing at that time.
(iii) All exchange differences arising on settlement/conversion on
foreign currency transactions are included in the Profit and Loss
Account.
(iv) In respect of transactions covered by forward exchange contracts,
the difference between the forward rate and the exchange rate at the
date of transaction is recognized as income or expense over the life of
the contract.
(h) Borrowing Cost
Borrowing costs attributable to acquisition and/or construction of
qualifying assets are capitalised as a part of the cost of these
capitalised assets, upto the date when such assets is ready for its
intended use. Borrowing costs on working capital is charged to Profit
and Loss Account for the year.
(i) Excise Duty
Cenvat is accounted as per exclusive method of accounting in terms of
Accounting Standard à 2 on Valuation of Inventories, issued by the
Institute of Chartered Accountants of India.
(j) Taxation
(i) Tax expense comprises of Current and Deferred Tax. Current Income
Tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income Tax Act, 1961.
(ii) Deferred tax is recognised, subject to consideration of prudence
on timing difference, being the difference between the taxable and
accounting income/expenditure that originate in one year and are
capable of reversal in one or more subsequent year(s). Deferred tax
assets are not recognised unless there is virtual certainty that
sufficient future taxable income will be available, against which such
deferred tax asset will realise.
(iii) Minimum Alternative Tax (MAT) credit 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 as an
asset in accordance with the recommendations contained in Guidance Note
issued by the ICAI, the said asset is created by way of a credit to the
Profit and Loss account and shown 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 Company will pay normal
Income Tax during the specified period.
(k) Leased Assets
Assets acquired under finance lease, which effectively transfer to the
Company all the risks and benefits are disclosed as leased assets.
Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of
interest on the remaining balance of the liability.
(l) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
(m) 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
exists, the company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less then its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognized in the
Profit and Loss account. If at the balance sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable is reassessed and the asset is reflected at the
recoverable amount.
Mar 31, 2010
(a) Basis of Accounting
The financial statements are prepared under historical cost convention
modified by revaluation of fixed assets and in accordance with the
requirements of the Companies Act, 1956 and comply with the Accounting
Standards issued by the Institute of Chartered Accountants of India to
the extent applicable. For recognition of Income and Expenses,
mercantile system of accounting is followed.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
year. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
(c) Revenue Recognition
(i) The Company recognises sale at the point of despatch of goods to
the customers. Sales are stated exclusive of Excise duty, Sales tax and
are net of sales return and trade discount.
(ii) Customs duty benefits in the form of advance license entitlements
are recognised on export of goods and are set off from material costs.
(d) Fixed Assets & Depreciation
(i) The Fixed Assets are stated at cost of acquisition/construction and
includes amounts added on revaluation less accumulated depreciation.
All cost including financing cost attributable to the fixed assets to
bring the assets to their intended use are capitalised.
(ii) Depreciation on plant and machinery (other than continuous process
plant) has been calculated on the written down value method at the
rates specified in Schedule XIV to the Companies Act, 1956. *
(iii) Depreciation on all other assets, other than leasehold land
including continuous process plant, has been calculated on the straight
line method at the rates specified in Schedule XIV to the Companies
Act, 1956.
(iv) Cost of leasehold land is not amortised over the lease period.
(v) Depreciation on the assets purchased/ sold during the year has been
provided on a pro-rata basis.
(e) Valuation of Inventories
(i) Inventories are valued at cost except for finished goods which are
valued at lower of cost or net
estimated realizable value. (ii) Cost of inventories is computed on
Weighted Average basis.
(iii) Finished goods and work in progress include cost of convereion
and other costs incurred in bringing the inventories to their present
location and condition.
(f) Employee benefits
(i) Defined Contribution Plan
Companys contributions paid/payable during the year to Provident Fund,
ESIC, Labour Welfare Fund and Superannuation Fund are recognised in the
Profit & Loss Account.
(ii) Defined benefit plan
The companys liabilities towards gratuity and leave encashment, a
defined benefit obligation, is accrued and provided for on the basis of
actuarial valuation, using the projected unit credit method as at the
Balance Sheet date.
(g) Foreign Currency Transactions
(i) Foreign currency transactions are recorded at the exchange rate
prevailing at the time of the
transaction and exchange difference, if any, on settlement of
transaction is recognised in the Profit & Loss Account.
(ii). Amounts of foreign currency transactions remaining pending at the
year end are recorded at the exchange rate prevailing at that time.
(iii) All exchange differences arising on settlement/conversion on
foreign currency transactions are included in the Profit and Loss
Account.
(iv) In respect of transactions covered by forward exchange contracts,
the difference between the forward rate and the exchange rate at the
date of transaction is recognized as income or expense ovet the life of
the contract.
(h) Borrowing Cost
Borrowing costs attributable to acquisition and/or construction of
qualifying assets are capitalised as a part of the cost of these
capitalised assets, upto the date when such assets is ready for its
intended use. Borrowing costs on working capital is charged to Profit
and Loss Account for the year.
(i) Excise Duty
Cenvat is accounted as per exclusive method of accounting in terms of
Accounting Standard - 2 on Valuation of Inventories, issued by the
Institute of Chartered Accountants of India.
(j) Taxation
(i) , Tax expense comprises of Current and Deferred Tax. Current Income
Tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income Tax Act, 1961.
(ii) Deferred tax is recognised, subject to consideration of prudence
on timing difference, being the difference between the taxable and
accounting income/expenditure that originate in one year and are
capable of reversal in one or more subsequent year(s). Deferred tax
assets are not recognised unless there is virtual certainty that
sufficient future taxable income will be available, against which such
deferred tax asset will realise.
(iii) Minimum Alternative Tax (MAT) credit 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 as an
asset in accordance with the recommendations contained in Guidance Note
issued by the ICAI, the said asset is created by way of a credit to the
Profit and Loss account and shown 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 Company will pay normal
Income Tax during the specified period.
(k) Leased Assets
Assets acquired under finance lease, which effectively transfer to the
Company, all the risks and benefits are disclosed as leased assets.
Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of
interest on the remaining balance of the liability.
(l) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
(m) 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
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less then its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognized in the
Profit and Loss account. If at the balance sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable is reassessed and the asset is reflected at the
recoverable amount.
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