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Accounting Policies of Borax Morarji Ltd. Company

Mar 31, 2015

(a) System of Accounting :

(i) The company maintains its accounts on accrual basis following historical cost convention to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 and the Rules except in the case of insignificant items and also in respect of significant uncertainties. Management makes estimates and technical and other assumptions regarding the amounts of income and expenses, assets and liabilities, and disclosure of contingencies, in accordance with Generally Accepted Accounting Principles in India in the preparation of the financial statements. Difference between the actual results and estimates are recognized in the period in which determined.

(ii) Assets and Liabilities are recorded at historical cost to the company except for assets which were revalued. These costs are

not adjusted to reflect the changing value of purchasing power of money.

(b) Fixed Assets :

i) Fixed Assets are carried at historical cost less depreciation (except freehold land), impairment losses and specific grants received, if any.(except for assets which have been revalued). Any other attributable costs (including interest) for bringing the assets to its working condition for its intended use are capitalized.

ii) Substantial expenditure on System Software Development is treated as intangible asset.

iii) Treatment of Expenditure during the construction period :

The expenditure' incurred during the period of construction (including cost of trial runs) is debited to the capital work-inprogress and on completion the costs are allocated to the respective fixed assets. -

(c) Investments :

Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. Current investments are stated at cost or fair value whichever is lower. Cost is determined on a weighted average basis.

(d) Inventories:

Inventories are valued at cost or net realisable value; whichever is lower Further the cost is determined on following basis:

i) Raw material: Imported and indigenous raw material on weighted average basis for Chemical division of Ambernath & Dahej.

ii) Stores & Spares and packing material: At weighted average cost.

iii) Material-in-process : The cost includes direct costs and appropriate overheads.

(iv) Finished goods : Cost includes direct cost, related overheads and excise duty.

(v) By Product: Estimated Net Realisable Value

(e) Revenue Recognition:

i) Domestic Sales are accounted on dispatch of products and are stated net of returns.

ii) Export Sales in foreign currency are accounted at the exchange rate prevailing on the date of Bill of Lading.

iii) Sales are inclusive of services, excise duty, duty drawback but exclude sales taxA/AT.

iv) Other income including interest is accounted on accrual basis.

v) Dividend Income is accounted when the right to receive is established

vi) Insurance Claims are recognized on the basis of claims preferred with Insurance Company after careful evaluation.

(f) Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized. Other borrowings costs are charged to the Statement of Profit & Loss.

(g) Leases: -

Lease rentals in respect of assets acquired under operating lease are charged to Statement of Profit and Loss.

(h) Earning per Share:

Earning per Share calculated by dividing net profit /loss for the period is attributable to equity shareholder (after deducting preference dividend and attributable taxes) by the weighted average number of Equity Shares outstanding during the period.

(i) Foreign Currency Transactions :

i) Foreign currency transactions are accounted at the rate prevailing on the date of the transaction. Monetary items denominated in foreign currency are translated at the exchange rate prevailing on the last day of the accounting period. In respect of items covered by forward exchange contracts the premium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or expense for the period.

ii) Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit and Loss Account, except in cases where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

(j) Depreciation:

i) Depreciation on Fixed Assets is provided on Straight Line Method except for Chemical Division where it is provided on Written Down Value method for all assets other than Plant & Machinery including Office Equipment & Computer added after 1st April 1987 which are provided on Straight Line Method at the rates and in the manner specified in Schedule II to the Companies Act, 2013 .

ii) Depreciation calculated in (i) above for Chemical Division includes additional charge of Depreciation, on account of revaluation of certain Fixed Assets as at 31st March 1986. However, the difference between the depreciation on revalued book value of Fixed Assets and the original cost is withdrawn from the Revaluation Reserve and credited to the General Reserve.

iii) Intangible asset are amortised over a period of ten years.

iv) Cost of leasehold land is amortised over the lease period.

(k) Impairment of assets:

The carrying cost of assets is reviewed at each Balance Sheet date for any indication of impairment based on internal/ external factors. An impairment loss is recognised whenever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital.

Post impairment depreciation is provided on the revised carrying value of the assets over its remaining useful life.

(l) Employee Benefits:

i) Defined Contribution Plan: Company's contributions paid/payable during the year to Provident Fund, Employee's Superannuation Fund, Gratuity, ESIC and Labour Welfare Fund are recognised in the Profit and Loss Account. There are no other obligations other than the contribution payable to the respective trusts.

ii) Defined Benefit Plan: Company's liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(m) Taxation:

(i) Income tax expense comprises current tax and deferred tax charge or credit. The deferred tax charged or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess realisation/liabillties.

(ii) Deferred tax in respect of timing differences which reverse after tax holiday period, are recognised in the year in which the timing differences originate.

(n) Contingencies / Provisions:

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation; in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.


Jun 30, 2014

(a) System of Accounting :

(i) The Company maintains its accounts on accrual basis following historical cost convention to comply in all material respects with the Accounting Standards notifi ed by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 and the Rules except in the case of insignifi cant items and also in respect of signifi cant uncertainties. Management makes estimates and technical and other assumptions regarding the amounts of income and expenses, assets and liabilities, and disclosure of contingencies, in accordance with Generally Accepted Accounting Principles in India in the preparation of the fi nancial statements. Difference between the actual results and estimates are recognized in the period in which determined.

(ii) Assets and Liabilities are recorded at historical cost to the Company except for assets which were revalued. These costs are not adjusted to refl ect the changing value of purchasing power of money.

(b) Fixed Assets :

i) Fixed Assets are carried at historical cost less depreciation (except freehold land), impairment losses and specifi c grants received, if any.(except for assets which have been revalued). Any other attributable costs (including interest) for bringing the assets to its working condition for its intended use are capitalized.

ii) Substantial expenditure on System Software Development is treated as intangible asset.

iii) Treatment of Expenditure during the construction period :

The expenditure incurred during the period of construction (including cost of trial runs) is debited to the capital work-in- progress and on completion the costs are allocated to the respective fi xed assets.

(c) Investments :

Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. Current investments are stated at cost or fair value whichever is lower. Cost is determined on a weighted average basis.

(d) Inventories :

Inventories are valued at cost or net realisable value; whichever is lower Further the cost is determined on following basis:

i) Raw material : Imported and indigenous raw material on weighted average basis for Chemical division of Ambernath & Dahej.

ii) Stores & Spares and packing material : At weighted average cost.

iii) Material-in-process : The cost includes direct costs and appropriate overheads.

(iv) Finished goods : Cost includes direct cost, related overheads and excise duty.

(v) Bye Product Estimated Net Realisable Value

(e) Revenue Recognition:

i) Domestic Sales are accounted on despatch of products and are stated net of returns.

ii) Export Sales in foreign currency are accounted at the exchange rate prevailing on the date of Bill of Lading.

iii) Sales are inclusive of services, excise duty, duty drawback but exclude sales tax/VAT.

(iv) Other income including interest is accounted on accrual basis.

(v) Dividend Income is accounted when the right to receive is established

(vi) Insurance Claims are recognized on the basis of claims preferred with Insurance Company after careful evaluation.

(f) Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized. Other borrowings costs are charged to the Statement of Profi t & Loss.

(g) Leases:

Lease rentals in respect of assets acquired under operating lease are charged to Statement of Profi t and Loss.

(h) Earning per Share:

Earning per Share calculated by dividing net profi t /loss for the period is attributable to equity shareholder (after deducting preference dividend and attributable taxes) by the weighted average number of Equity Shares outstanding during the period.

(i) Foreign Currency Transactions :

i) Foreign currency transactions are accounted at the rate prevailing on the date of the transaction. Monetary items denominated in foreign currency are translated at the exchange rate prevailing on the last day of the accounting period. In respect of items covered by forward exchange contracts the premium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profi t or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or expense for the period.

ii) Gain or loss arising out of translation/conversion is taken credit for or charged to the Profi t and Loss Account, except in cases where they relate to acquisition of fi xed assets, in which case they are adjusted to the carrying cost of such assets.

(j) Depreciation :

i) Depreciation on Fixed Assets is provided on Straight Line Method except for Chemical Division where it is provided on Written Down Value method for all assets other than Plant & Machinery including Offi ce Equipment & Computer added after 1st April 1987 which are provided on Straight Line Method at the rates and in the manner specifi ed in Schedule XIV to the Companies Act,1956 .

ii) Depreciation calculated in (i) above for Chemical Division includes additional charge of Depreciation, on account of revaluation of certain Fixed Assets as at 31st March 1986. However, the difference between the depreciation on revalued book value of Fixed Assets and the original cost is withdrawn from the Revaluation Reserve and credited to the Profi t and Loss Account.

iii) Intangible assets are amortised over a period of ten years.

iv) Cost of leasehold land is amortised over the lease period.

(k) Impairment of assets:

The carrying cost of assets is reviewed at each Balance Sheet date for any indication of impairment based on internal/ external factors. An impairment loss is recognised whenever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash fl ows are discounted to the present value at the weighted average cost of capital. Post impairment depreciation is provided on the revised carrying value of the assets over its remaining useful life.

(l) Employee Benefits:

i) Defi ned Contribution Plan: Company''s contributions paid/payable during the year to Provident Fund, Employee''s Superannuation Fund, Gratuity, ESIC and Labour Welfare Fund are recognised in the Profi t and Loss Account. There are no other obligations other than the contribution payable to the respective trusts.

ii) Defi ned Benefit Plan: Company''s liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefi t entitlement and measures each unit separately to build up the fi nal obligation. Past services are recognised on a straight line basis over the average period until the amended benefi ts become vested. Actuarial gain and losses are recognised immediately in the statement of Profi t and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash fl ows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defi ned benefi t obligation.

(m) Taxation:

(i) Income tax expense comprises current tax and deferred tax charge or credit. The deferred tax charged or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess realisation/liabilities.

(ii) Deferred tax in respect of timing differences which reverse after tax holiday period, are recognised in the year in which the timing differences originate.

(n) Contingencies / Provisions:

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outfl ow of resources embodying economic benefi t will be required to settle the obligation; in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to refl ect the current best estimate. A contingent liability is disclosed, unless the possibility of an outfl ow of resources embodying the economic benefi t is remote. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2013

(a) System of Accounting :

(i) The Company adopts the accrual concept in the preparation of its accounts except in the case of insignificant items and also in respect of significant uncertainties.

(ii) Assets and Liabilities are recorded at historical cost to the company except for assets which were revalued. These costs are not adjusted to reflect the changing value of purchasing power of money.

(iii) During the year ended 31st March 2013, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(b) Fixed Assets : (Dahej)

i) Fixed Assets are carried at historical cost less depreciation (except freehold land), impairment losses and specific grants received, if any.(except for assets which have been revalued). Any other attributable costs (including interest) for bringing the assets to its working condition for its intended use are capitalized.

ii) Substantial expenditure on System Software Development is treated as intangible asset.

iii) Treatment of Expenditure during the construction period :

The expenditure incurred during the period of construction (including cost of trial runs) is debited to the capital work-in- progress and on completion the costs are allocated to the respective fixed assets.

(c) Investments :

Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. Current investments are stated at cost or fair value whichever is lower. Cost is determined on a weighted average basis.

(d) Inventories :

Inventories are valued at cost or net realisable value; whichever is lower Further the cost is determined on following basis:

i) Raw material

Imported and indigenous raw material on weighted average basis for Chemical division and on FIFO basis for other divisions.

ii) Stores & Spares and packing material:

At weighted average cost.

iii) Material-in-process :

The cost includes direct costs and appropriate overheads.

(iv) Finished goods :

Cost includes direct cost, related overheads and excise duty.

(v) By Product

Estimated Net Realisable Value

(e) Revenue Recognition:

i) Domestic Sales are accounted on dispatch of products and are stated net of returns.

ii) Export Sales in foreign currency are accounted at the exchange rate prevailing on the date of Bill of Lading.

(iii) Sales are inclusive of services, excise duty, duty drawback but exclude sales tax/VAT.

(iv) Other income including interest is accounted on accrual basis.

(v) Dividend Income is accounted when the right to receive is established

(vi) Insurance Claims are recognized on the basis of claims preferred with Insurance Company after careful evaluation.

(f) Borrowing Cost:

Borrowing cost that are attributable to the acquisition, construction or production of a qualifying assets are capitalized. Other borrowings costs are expensed out.

(g) Leases:

Lease rentals in respect of assets acquired under operating lease are charged to Profit and Loss.

(h) Earnings per Share:

Earnings per Share calculated by dividing net profit /loss for the period is attributable to equity shareholder (after deducting preference dividend and attributable taxes)-by the weighted average number of Equity Shares outstanding during the period.

(i) Foreign Currency Transactions :

i) Foreign currency transactions are accounted at the rate prevailing on the date of the transaction. Monetary items denominated in foreign currency are translated at the exchange rate prevailing on the last day of the accounting period, in respect of items covered by forward exchange contracts the premium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or expense for the period.

ii) Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit and Loss Account, except in cases where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

(j) Depreciation :

i) Depreciation on Fixed Assets is provided on Straight Line Method except for Chemical Division where it is provided on Written Down Value method for all assets other than Plant & Machinery added after 1st April 1987 which are provided on Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

ii) Depreciation calculated in (i) above for Chemical Division includes additional charge of Depreciation, on account of revaluation of certain Fixed Assets as at 31st March 1986. However, the difference between the depreciation on revalued book value of Fixed Assets and the original cost is withdrawn from the Revaluation Reserve and credited to the Profit and Loss Account.

iii) Intangible asset are amortised over a period of ten years.

iv) Cost of leasehold land is amortised over the lease period.

(k) Impairment of assets:

The carrying cost of assets is reviewed at each Balance Sheet date for any indication of impairment based on internal/ external factors. An impairment loss is recognised whenever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital.

Post impairment depreciation is provided on the revised carrying value of the assets over its remaining useful life.

(I) Employee Benefits:

i) Defined Contribution Plan: Company''s contributions paid/payable during the year to Provident Fund, Employee''s Superannuation Fund, Gratuity, ESIC and Labour Welfare Fund are recognised in the Profit and Loss Account. There are no other obligations other than the contribution payable to the respective trusts.

ii) Defined Benefit Plan: Company''s liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(m) Taxation:

(i) Income tax expense comprises current tax and deferred tax charge or credit. The deferred tax charged or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess realisation/ liabilities.

(ii) Deferred tax in respect of timing differences which reverse after tax holiday period, are recognised in the year in which the timing differences originate.

(n) Contingencies / Provisions:

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation; in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2012

(a) System of Accounting :

(i) The Company adopts the accrual concept in the preparation of its accounts except in the case of insignificant items and also in respect of significant uncertainties.

(ii) Assets and Liabilities are recorded at historical cost to the company except for assets which were revalued. These costs are not adjusted to reflect the changing value of purchasing power of money.

(iii) During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(b) Fixed Assets:

i) Fixed Assets are carried at historical cost less depreciation (except freehold land), impairment losses and specific grants received, if any. (except for assets which have been revalued). Any other attributable costs (including interest) for bringing the assets to its working condition for its intended use are capitalized.

ii) Substantial expenditure on System Software Development is treated as intangible asset.

iii) Treatment of Expenditure during the construction period :

The expenditure incurred during the period of construction (including cost of trial runs) is debited to the capital work-in- progress and on completion the costs are allocated to the respective fixed assets.

(c) Investments:

Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. Current investments are stated at cost or fair value whichever is lower. Cost is determined on a weighted average basis.

(d) Inventories:

Inventories are valued at cost or net realisable value; whichever is lower. Further the cost is determined on following basis:

i) Raw material : Imported and indigenous raw material on weighted average basis for Chemical Division and on FIFO basis for Other Divisions.

ii) Stores & Spares and packing : At weighted average cost, material

iii) Material-in-process : The cost includes direct costs and appropriate overheads.

(iv) Finished goods : Cost includes direct cost, related overheads and excise duty.

(v) By Product : Estimated Net Realisable Value.

(e) Revenue Recognition:

i) Domestic Sales are accounted on despatch of products and are stated net of returns.

ii) Export Sales in foreign currency are accounted at the exchange rate prevailing on the date of Bill of Lading.

iii) Sales are inclusive of services, excise duty, duty drawback but exclude sales tax/VAT.

iv) Other income including interest is accounted on accrual basis.

v) Dividend Income is accounted when the right to receive is established.

vi) Insurance Claims are recognized on the basis of claims preferred with Insurance Company after careful evaluation.

(f) Borrowing Cost:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying assets are capitalized. Other borrowings cost are expensed out.

(g) Leases:

Lease rentals in respect of assets acquired under operating lease are charged to Profit and Loss.

(h) Earning per Share:

Earning per Share calculated by dividing net profit /loss for the period is attributable to equity shareholder (after deducting preference dividend and attributable taxes) by the weighted average number of Equity Shares outstanding during the period.

(i) Foreign Currency Transactions :

i) Foreign currency transactions are accounted at the rate prevailing on the date of the transaction. Monetary items denominated in foreign currency are translated at the exchange rate prevailing on the last day of the accounting period. In respect of items covered by forward exchange contracts the premium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or expense for the period.

ii) Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit and Loss Account, except in cases where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

(j) Depreciation:

i) Depreciation on Fixed Assets is provided on Straight Line Method except for Chemical Division where it is provided on Written Down Value method for all assets other than Plant & Machinery added after 1st April 1987 which are provided on Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act,1956

ii) Depreciation calculated in (i) above for Chemical Division includes additional charge of Depreciation, on account of revaluation of certain Fixed Assets as at 31st March 1986. However, the difference between the depreciation on revalued book value of Fixed Assets and the original cost is withdrawn from the Revaluation Reserve and credited to the Profit and Loss Account.

iii) Intangible asset are amortised over a period of ten years.

iv) Cost of leasehold land is amortised over the lease period.

(k) Impairment of assets:

The carrying cost of assets is reviewed at each Balance Sheet date for any indication of impairment based on internal/ external factors. An impairment loss is recognised whenever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital. ,

Post impairment depreciation is provided on the revised carrying value of the assets over its remaining useful life.

(I) Employee Benefits: .

i) Defined Contribution Plan: Company's contributions paid/payable during the year to Provident Fund, Employee's Superannuation Fund, Gratuity, ESIC and Labour Welfare Fund are recognised in the Profit and Loss Account. There are no other obligations other than the contribution payable to the respective trusts.

ii) Defined Benefit Plan: Company's liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at . the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(m) Taxation:

(i) Income tax expense comprises current tax and deferred tax charge or credit. The deferred tax charged or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess realisation/liabilities.

(ii) Deferred tax in respect of timing differences which reverse after tax holiday period, are recognised in the year in which the timing differences originate.

(n) Contingencies / Provisions:

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation; in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote. Contingent assets are neither recognized nor disclosed in the financial statements.

b Terms/rights attached to shares:

The Company has only one class of equity shares having a per of value of Rs. 10/- per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the apporoval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferencial amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

Note 3 (a)

Capital Reserves

Capital Reserve represents capital subsidy of Rs. 15 lacs and Rs. 20 lacs received from State Industrial Promotion Corporation of Tamil Nadu Ltd. and Maharashtra Energy Development Agency respectively.

4.1 Additional Information to Secured/Unsecured Long Term Borrowings:

The long term portion of term loans are shown under long term borrowings and the current maturities of the long term borrowings are shown under the current liabilties as per the disclosure requirements of the Revised Schedule VI.

4.2 Details of Securities and Terms of repayment

I. Secured Term Loans :

(a) Indian Renewable Energy Development Agency (IREDA)

The loans are secured by mortgage of immovable properties & hypothecation of movable properties of the Company situated at Village Thoseghar (Project No.908 & 1009), Village Maloshi (Project No.1136) and Village Vankusawade (Project No.1324), all situated in Satara District in the State of Maharashtra. The Loan for Project No. 1324 at Vankusawade, is further secured by the mortgage/charge created on the immovable properties, hypothecation of movable properties at Village Thosegar (Project No. 908 & 1009) and Village Maioshi (Project No.1136). The loan has been repaid on paying final installment of Rs. 3,65 lacs on 21st June 2011.

(b) Hire Purchase Loans

Secured by hypothecation on respective vehicle. Rate of interest @ 10.53% . The loan installment is 36 months and the period of maturity w.r.t. balance sheet date is two months.

II. Unsecured Loan:

(a) Fixed Deposits:

Interest on Fixed Deposit for one year is @ 9.50% & for three years @ 10.50% ( Additional @ 0.5% interest will be paid on deposits accepted from shareholders of the Company.)

(b) Deferred payment Credit/leasehold land:

The loan of Rs. 118.26 lacs is @ 13% interest p.a. and is repayable in 4 equal quarterly installments of Rs. 4.73 lacs each. The loan has been fully repaid during the current year.

(c) Loan from Related parties:

The loan taken from Related parties as interest free loan and repayable after two years from the date of received. .

Secured

Cash Credit (Note 8 (I))

Cash Credit including Export Packing Credit (Secured by hypothecation of stock-in-trade,stores and book debts). Further secured, by way of second charge by a simple registered mortgage on the land of Chemical Division at Ambarnath in the state of Maharashtra.

Unsecured:

Corporate loan from HDFC Ltd (Note 8(11) (b))

Corporate loan from HDFC Ltd. @ 15.75% interest, repayable in a single installment at the end of next year.

Note -1) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 30 days at the Balance Sheet date, computed on unit wise basis. Further, no interest has been paid or is payable to any Micro, Small and Medium Enterprise on the Balance Sheet date. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

Note- 2) Derivative Instruments & Unhedged Foreign Currency Exposure

Note: 2(b):

Company's long term investment in Dharamsi Morarji Chemical Co. Ltd.(DMCC) Represented by 2,34,196 fully paid up equity shares is considered at face value after making provision for diminution of Rs. 152.06 lacs in the year 2007-08). Taking into account, intrinsic business value of the DMCC and its business synergies to the Company no further diminution in value is considered necessary, other loans and advance includes

(i) Insurance claim of Rs. 64.73 lacs being non-settlement of the Company's claim by the The New India Assurance Company Limited (NIACL), in respect of loss of stock in the Chemical Division due to flood during June 2002. The Consumer Disputes Redressal Commission, Maharashtra State, Mumbai, wherein the Company had filed the complaint,vide its interim order dated 14th November 2008 while allowing the interim relief, directed NIACL to deposit a sum of Rs. 6.93 lacs with the Commission, which the Company has withdrawn upon furnishing necessary bank guarantee. The Commission's notice for final hearing of this matter is awaited.

(ii) An amount Rs. 14.22 lacs receivable from the State Trading Corporation of India Ltd.(STC), New Delhi, on account of rate difference and dispatch money earned. The Tis Hazari Court, Delhi, wherein the Company filed suit against STC for recovery of this amount, has upheld Company's claim alongwith interest @ 6% per annum from the date of filing of the suit. STC has preferred further appeal in the Delhi High Court which is yet to be decided;

(iii) An Amount of Rs. 37.84 lacs (Previous Year Rs. 19.84 lacs) paid to Gratuity Trust.

Note 19(b)(i)

An amount of Rs.. 47.67 lacs on account of expenses towards proposed Right Issue expenses. The same will be charged off against Securities Premium as and when the issue is actually made.

* The Company has capitalised interest of Rs. 88.60 lacs paid on acquisition of certain qualifying assets relating to Dahej Project in terms of Accounting Standard AS-16 recoverable 'Long Term Loans & Advances" & has furnished bank guarantee for the balance of demand.)

Iv) Excise Duty demanded by Commissioner of Central Excise, Thane-I" 272.31

** (The Company has prefered an appeal with CESTAT against the above demand and unconditional stay on the demand has also been granted by the CESTAT.)

(c) Some of the retrenched employees of Export Oriented Unit (EOU) of the erstwhile Timber Division have not accepted the retrenchment compensation offered by the company on the closure of the unit and matter is in the court. The amount as offered by the company has been duly provided for and as per legal opinion the possibility of any further liability is remote. The additional liability if any is presently not ascertainable.


Mar 31, 2010

(a) System of Accounting:

(i) The Company adopts the accrual concept in the preparation of its accounts except in the case of insignificant items and also in respect of significant uncertainties.

(ii) Assets and Liabilities are recorded at historical cost to the company except for assets which were revalued. These costs are not adjusted to reflect the changing value of purchasing power of money.

(b) Fixed Assets:

(i) Fixed Assets are carried at historical cost less depreciation (except freehold land), impairment losses and specific grants received, if any, (except for assets which have been revalued). Any other attributable costs (including interest) for bringing the assets to its working condition for its intended use are capitalized.

(ii) Substantial expenditure on System Software Development is treated as intangible asset.

(iii) Treatment of Expenditure during the construction period:

The expenditure incurred during the period of construction (including cost of trial runs) is debited to the capital work-in- progress and on completion the costs are allocated to the respective fixed assets.

(c) Investments:

Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. Current investments are stated at cost or fair value whichever is lower. Cost is determined on a weighted average basis.

(d) Inventories:

Inventories are valued at cost or net realisable value; whichever is lower Further the cost is determined on following basis:

(i) Raw material : Imported and indigenous raw material on weighted average basis for Chemical division and on FIFO basis for other divisions.

(ii) Stores & Spares and packing material : At weighted average cost.

(iii) Material-in-process : The cost includes direct costs and appropriate overheads.

(iv) Finished goods : Cost includes direct cost, related overheads and excise duty.

(v) By Product : Estimated Net Realisable Value.

(e) Sales:

(i) Domestic Sales are accounted on despatch of products and are stated net of returns.

(ii) Export Sales in foreign currency are accounted at the exchange rate prevailing on the date of Bill of Lading.

(iii) Sales are inclusive of services, excise duty, duty drawbacks but exclude sales tax/VAT.

(f) Insurance Claims:

Insurance Claims are recognized on the basis of claims preferred with Insurance Company after careful evaluation.

(g) Foreign Currency Transactions:

(i) Foreign currency transactions are accounted at the rate prevailing on the date of the transaction. Monetary items denominated in foreign currency are translated at the exchange rate prevailing on the last day of the accounting period. In respect of items covered by forward exchange contracts the premium or discount arising at the inception of such a forward exchange contract is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or expense for the period.

(ii) Gain or loss arising out of translation/conversion is taken credit for or charged to the Profit and Loss Account.

(h) Depreciation:

(i) Depreciation on Fixed Assets is provided on Straight Line Method except for Chemical Division where it is provided on Written Down Value method for all assets other than Plant & Machinery added after 1st April 1987 which are provided on Straight Line Method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

(ii) Depreciation calculated in (i) above for Chemical Division includes additional charge of Depreciation, on account of revaluation of certain Fixed Assets as at 31st March 1986. However, the difference between the depreciation on revalued book value of Fixed Assets and the original cost is withdrawn from the Revaluation Reserve and credited to the Profit and Loss Account.

(iii) Intangible asset are amortised over a period of ten years.

(iv) Cost of leasehold land is amortised over the lease period.

(i) Impairment:

The carrying cost of assets is reviewed at each Balance Sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognised whenever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to the present value at the weighted average cost of capital.

Post impairment depreciation is provided on the revised carrying value of the assets over its remaining useful life.

(j) Employee Benefits:

(i) Defined Contribution Plan: Companys contributions paid/payable during the year to Provident Fund, Employees Superannuation Fund, Gratuity, ESIC and Labour Welfare Fund are recognised in the Profit and Loss Account. There are no other obligations other than the contribution payable to the respective trusts.

(ii) Defined Benefit Plan: Companys liabilities towards gratuity and leave encashment are determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognised on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds where the currency and terms of the Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

(k) Taxation:

(i) Income tax expense comprises current tax, fringe benefit tax and deferred tax charge or credit. The deferred tax charged or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws, to reassess realisation/liabilities.

(ii) Deferred tax in respect of timing differences which reverse after tax holiday period, are recognised in the year in which the timing differences originate.

(l) Contingencies/Provisions:

Provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation; in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate of the expenditure required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote.

 
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