Mar 31, 2022
1. CORPORATE INFORMATION
Dhanuka Agritech Limited ("DAL" or "the Company") is a public limited company incorporated under The Companies Act, 1956, domiciled in India and has its registered office at New Delhi. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.
DAL manufactures a wide range of agro-chemicals like herbicides, insecticides, fungicides, plant growth regulators in various forms - liquid, dust, powder and granules. The Company has a Pan-India presence through its Branch offices/Depots in all major states in India.
The Registered office of the company situated at 82, Abhinash Mansion, 1st Floor, Joshi Road, Karol Bagh, New Delhi-110005 and the corporate office is situated at Global Gateway Towers, MG Road, Near Guru Dronacharya Metro Station, Gurugram-122002.
2. BASIS OF PREPARATIONa. Statement of compliance
The financial statements are prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard (''Ind AS'') as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (''the Act'') as amended through rules and other relevant provisions of the Act to the extent applicable.
These financial statements were authorized for issue by the Board of Directors on May 23, 2022.
The financial statements have been prepared on an accrual basis and under the historical cost convention, except for the following:
- Certain financial assets and liabilities that is measured at fair value;
- Defined benefit plans - plan assets measured at fair value.
c. Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates ("the functional currency"). The financial statements are presented in Indian National Rupee (''INR''), which is the Company''s functional and
presentation currency. All amounts have been rounded to the nearest lacs, unless otherwise indicated.
d. Current or Non-current classification
All 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 the Schedule III to the Companies Act, 2013. Based on the nature of products and time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
e. Critical accounting judgements and key source of estimation uncertainty
The preparation of standalone financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Company''s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.
The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Although the Company regularly assesses these estimates, actual results may differ from these estimates. Changes in estimates are recorded in the periods in which they become known.
Application of accounting policies that require critical accounting estimates and assumption judgements having the most significant effect on the amounts recognized in the financial statements are:
- Measurement of defined benefit obligations;
- Recognition of deferred tax assets & minimum alternative tax credit entitlement;
- Useful life and residual value of Property, plant and equipment and intangible assets;
- Impairment test of financial and non-financial assets;
- Measurement of fair value of financial instrument; and
- Recognition and measurement of provisions and contingencies.
- Recognition and measurement of provision for discounts and rebates.
3. SIGNIFICANT ACCOUNTING POLICIES
The Company has consistently applied the following accounting policies to all periods presented in the financial statements.
a. Property, plant and equipmentI. Recognition and measurement
On transition to Ind AS, the Company had elected to continue with the carrying value of all its property, plant and equipment recognized as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
Freehold land is carried at cost. All other items of Property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, after deducting trade discount and rebates, and including import duties, nonrefundable purchase taxes, any directly attributable cost of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials, direct labour and any directly attributable cost of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are included in cost to the extent they relate to the period till such assets are ready for its intended use.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. The cost of replacing part of an item of property, plant and equipment or major inspections performed, are recognized in the
carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of all other repairs and maintenance are recognized in the Statement of Profit & Loss as incurred.
Capital work-in-progress includes cost of property, plant and equipment under installation / under construction as at the balance sheet date.
An item of property, plant and equipment is derecognized when no future economic benefits are expected to arise from the continued use of the asset or upon disposal. Any gain or loss on disposal is recognized in statement of profit & loss.
II. Depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values, recognized in the statement of profit and loss. Depreciation on property, plant and equipment is provided on Written Down Value Method (WDV) at the rate and in the manner based on the useful life of the assets as estimated by the management which coincide with the useful life specified under Schedule II of the Companies Act, 2013, which are as follows:
⢠Building including factory building- 30-60 years
⢠General plant and machinery- 15 years
⢠Plant and Machinery-Vessel/Storage tank- 2 0 years
⢠Furniture and Fittings- 1 0 yea rs
⢠Motor Vehicles- 8-10 years
⢠Office Equipment- 5 years
⢠Computers and data processing units- 3-6 years
⢠Wind Mill- 2 2 y e a r s
⢠*Solar Plant- 25 years
*The useful life considered above is on the basis of the agreement with third party regarding sale of electricity generated from this plant.
Depreciation methods, useful lives and residual values are reviewed at each financial year end and changes, if any, are accounted for prospectively. Depreciation on additions to or on disposal of assets is calculated on pro-rata basis i.e. from (upto) the date on which the property, plant and equipment is available for use (disposed off).
Assets having cost upto ''5000/- have been fully depreciated in the year of acquisition by leaving Re.1 as a nominal value for its identity in fixed assets register.
On transition to Ind AS, company has elected to continue with the carrying value of all of its intangible assets recognized as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets.
Intangible assets are measured at cost less any accumulated amortization and impairment losses, if any.
Cost of an item of intangible asset comprises its purchase price, after deducting trade discount and rebates, and including import duties, non-refundable purchase taxes, any directly attributable cost of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.
Amortization is recognized on a straight line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
The estimated useful lives are as follows:
Computer Software 10 years
An intangible asset is derecognized when no future economic benefits are expected to arise from the continued use of the asset or upon disposal. Any gain or loss on disposal is recognized in statement of profit & loss.
c. Impairment of non-financial assets
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash flows are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (''CGUs'').
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that
refects current market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the statement of profit and loss.
In respect of assets for which impairment loss has been recognized in prior periods, the company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. After impairment, depreciation or amortization is provided on the revised carrying amount of the assets over its remaining useful life.
d. Financial instrumentsI. Initial recognition
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are initially recognized at fair value plus transaction costs directly attributable to its acquisition. The transaction costs incurred for the purchase of financial assets held at fair value through profit and loss are expensed in the statement of profit and loss immediately.
II. Subsequent measurement1) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. When the financial asset is derecognized or impaired, the gain or loss is recognized in the statement of profit and loss.
2) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in statement of profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to the statement of profit and loss.
Equity instruments are subsequently measured at fair value. On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment by investment basis. Fair value gains and losses recognized in OCI are not reclassified to the statement of profit and loss.
3) Financial assets at fair value through protit and loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit and loss.
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts is approximate to the fair value due to the short maturity of these instruments.
Investment in subsidiaries is carried at cost less impairment, if any, in the separate financial statements.
MI. Impairment of financial assets
The company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost and FVOCI debt instruments. Except trade receivables, expected credit losses are measured at an amount equal to the twelve month expected credit loss unless there has been a significant increase in credit risk from initial recognition, in which case those are measured at lifetime ECL.
In case of trade receivables, the Company follows the simplified approach which requires expected lifetime losses to be recognized from the initial recognition of the
trade receivables. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.
IV. Derecognition1) Financial Assets
Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
If the company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
The company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expired.
V. Reclassification of Financial Assets and Financial liabilities
The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. If the company reclassifies financial assets, it applies prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.
VI. Derivative financial instruments
The company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency risk. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value at the end of each reporting period. Derivatives are carried as financial assets when the fair value is positive
and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are recognized immediately in the statement of profit and loss.
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the company has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using other valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
Fair value for measurement and/ or disclosure purposes are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 - This includes financial instruments measured using quoted prices (Unadjusted) in active markets for identical assets and liabilities.
Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Inventories (including Stock-in-transit) of Finished Goods, Stock in Trade, Work in progress, Raw materials, packing materials and Stores & Spares are stated at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Cost includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Cost of Raw Materials, Packing Materials, Stores and Spares, Stock in Trade and other products are determined on First in first out (FIFO) basis and are net of GST
Cost of Work in progress and Finished Goods is determined on First in first out (FIFO) basis considering direct material cost and appropriate portion of manufacturing overheads based on normal operating capacity.
Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and wherever necessary, the same are written off or provision is made for such inventories. Finished goods and work in progress are written down if anticipated net realizable value declines below the carrying amount of the inventories and such write down to inventories are recognized in statement of profit & loss. When reason for such write down ceases to exists, then write down is reversed through statement of profit and loss account.
g. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that refects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement,
unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent liabilities are not recognized but are disclosed in notes.
Contingent assets are not disclosed in the financial statements unless an inflow of economic benefits is probable.
Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.
h. Revenue RecognitionI. Sale of goods
Revenue is generated primarily from sale of agrochemicals.
Revenue is recognized upon transfer of control of promised goods to customers in an amount that refects the consideration which the Company expects to receive i n exchange for those goods.
Revenue from the sale of goods is recognized at the point in time when control is transferred to the customer which is usually on delivery.
Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, rebates, scheme allowances, price concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue excludes taxes collected from customers on behalf of the government. Accruals for discounts/incentives and returns are estimated (using the most likely method) based on accumulated experience and underlying schemes and agreements with customers. Due to the short nature of credit period given to customers, there is no financing component in the contract.
Contract balancesTrade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section 3(d) Financial instruments -initial recognition and subsequent measurement.
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or
services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the asset''s net carrying amount on initial recognition. Interest income is included in other income in the statement of profit and loss.
Dividend income is recognized when the Company''s right to receive dividend is established, and is included in other income in the statement of profit and loss.
IV. Revenue from electricity generation
Revenue from electricity generation is recognized on the basis of electricity units generated and invoice raised on monthly basis.
Insurance claims are accounted for on the basis of claims admitted and to the extent that there is no uncertainty in receiving the claims.
Government grants and subsidies are recognised where there is reasonable assurance that the grant/subsidies will be received and all attached conditions will be complied with. The Grants are presented under the head other operating income.
i. Employee BenefitsI. Short Term Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
II. Defined contribution plans
Employees benefits in the form of the Company''s contribution to Provident Fund, Pension scheme, Superannuation Fund, National Pension scheme and Employees State Insurance are defined contribution
schemes. The Company recognizes contribution payable to these schemes as an expense, when an employee renders the related service.
If the contribution payable exceeds contribution already paid, the deficit payable is recognized as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the end of the reporting period, the Company recognize that excess as an asset (prepaid expense) to the extent that the prepayment will lead to reduction in future payments or a cash refund.
Retirement benefits in the form of gratuity are considered as defined benefit plans. The Company''s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The company provides for its gratuity liability based on actuarial valuation of the gratuity liability as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary. The company contributes to the gratuity fund, which are recognized as plan assets. The defined benefit obligation as reduced by fair value of plan assets is recognized in the Balance Sheet.
When the calculation results in a potential asset for the company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurement of the net defined benefit liability, wh.ich comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in Other Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined
benefit plans are recognized in statement of profit & loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in statement of profit & loss. The company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
IV. Other long term employee benefits
Other long term Employee benefits includes earned leaves and sick leaves. The Company''s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurement are recognized in statement of profit & loss in the period in which they arise.
The liability for long term compensated absences are provided based on actuarial valuation as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary.
j. Foreign currency transactions
The financial statements are presented in Indian rupee, which is the company''s functional and presentation currency, unless stated otherwise. A company''s functional currency is that of the primary economic environment in which the company operates.
Foreign currency transactions are translated into the functional currency using the exchange rate at the date of the transaction. Foreign exchange gains/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 are recognized in the statement of profit and loss.
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
Income tax expense comprises current and deferred tax. It is recognized in statement of profit & loss except to the extent that it relates to items recognized directly in equity or in Other Comprehensive Income
Current tax comprises the expected tax payable on the taxable income for the year after taking credit of the benefits available under the Income Tax Act and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date.
Current tax assets and liabilities are offset only if, the Company:
a) has a legally enforceable right to set off the recognized amounts; and
b) i ntends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax assets/liabilities are generally recognized for all taxable temporary differences, the carry forward balance of unused tax credits and unused tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences, the carry forward balance of unused tax credits and unused tax losses can be utilized.
The carrying value of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized based on the tax rates and tax laws that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company expects, at the end
Deferred tax assets and liabilities are offset only if:
i) The entity has a legally enforceable right to set off current tax assets against current tax liabilities;
and
ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
An operating segment is defined as a component of the entity that represents business activities from which it earns revenues and incurs expenses and for which discrete financial information is available. The operating segments are based on the company''s internal reporting structure and the manner in which operating results are reviewed by the Chief Operating Decision Maker (CODM).
The Chairman, Managing Director, COO and CFO have been identified as CODM by the Company. Refer Note 38 for segment information.
Cash and cash equivalents comprise cash at bank and on hand and short-term deposits 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.
Cash flow statements are prepared in accordance with "Indirect Method" as explained in the Ind AS on Statement of Cash Flows (Ind AS - 7). The cash flows from operating, financing and investing activity of the company are segregated.
The Company''s lease asset classes primarily consist of leases for Building and Vehicles. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases). For these short-term, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Company as a lessorI. Operating Lease
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognized on a straightline basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment in the leases.
Finance lease income is allocated to accounting periods so as to refect a constant periodic rate of return on the net investment outstanding in respect of the lease.
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per Share, the net profit or loss for the period attributable to Equity Shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
r. Dividend to Equity Shareholders
Dividend to equity shareholders is recognized as a liability and deducted from shareholders'' Equity, in the period in which the dividends are approved by the equity shareholders in the general meeting.
s. Research and Development Expenses
Research and Development Expenses of revenue nature are charged to the Statement of Profit and Loss.
Mar 31, 2018
1. CORPORATE INFORMATION
Dhanuka Agritech Limited (âDALâ or âthe Companyâ) is a public limited company incorporated under The Companies Act, 1956, domiciled in India and has its registered office at New Delhi. The shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange.
DAL manufactures a wide range of agro-chemicals like herbicides, insecticides, fungicides, plant growth regulators in various forms - liquid, dust, powder and granules. The Company has a pan-India presence through its Branch offices/Depots in all major states in India.
2. BASIS OF PREPARATION
a. Statement of compliance
The financial statements are prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard (''Ind AS'') as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (''the Act'') as amended through rules and other relevant provisions of the Act to the extent applicable.
The financial statement up to year ended 31 March, 2017 were prepared in accordance with accounting standards notified under section 133 of the Companies Act, 2013 (''The Act'') read with rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI).
As these are the Company''s first financial statements prepared in accordance with Indian Accounting Standards (Ind AS), Ind AS 101, First-time Adoption of Indian Accounting Standards has been applied. Reconciliations and explanations of the effect of the transition from previous GAAP to Ind AS on company''s total equity, total comprehensive income and statement of cash flows are provided in Note no 45
These financial statements were authorized for issue by the Board of Directors on May 22, 2018.
b. Basis of measurement
The financial statements have been prepared on an accrual basis and under the historical cost convention, except for the following:
- Certain financial assets and liabilities that is measured at fair value;
- Defined benefit plans - plan assets measured at fair value.
c. Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (âthe functional currencyâ). The financial statements are presented in Indian National Rupee (''INR''), which is the Company''s functional and presentation currency. All amounts have been rounded to the nearest lacs, unless otherwise indicated.
d. Current or Non-current classification
All 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 the Schedule III to the Companies Act, 2013. Based on the nature of products and time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
e. Use of Judgements and estimates
In preparing the financial statements, the Management has to make certain assumptions and estimates that may substantially impact the presentation of the Company''s financial position and/ or results of operations.
Such assumptions and estimates mainly relate to the useful life of Property, Plant and Equipment, Intangible Assets, Recognition of deferred tax, and the recognition of provisions, including those for litigation and impairment, employee benefits and sales deductions.
The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Although the Company regularly assesses these estimates, actual results may differ from these estimates. Changes in estimates are recorded in the periods in which they become known.
3. SIGNIFICANT ACCOUNTING POLICIES
The Company has consistently applied the following accounting policies to all periods presented in the financial statements.
a. Property, plant and equipment
I. Recognition and measurement
Property, plant and equipment are measured at cost,
less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, after deducting trade discount and rebates, and including import duties, non-refundable purchase taxes, any directly attributable cost of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials, direct labour and any directly attributable cost of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are included in cost to the extent they relate to the period till such assets are ready for its intended use.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. The cost of replacing part of an item of property, plant and equipment or major inspections performed, are recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of all other repairs and maintenance are recognized in the Statement of Profit & Loss as i ncurred.
Capital work-in-progress includes cost of property, plant and equipment under installation / under construction as at the balance sheet date.
An item of property, plant and equipment is derecognized when no future economic benefits are expected to arise from the continued use of the asset or upon disposal. Any gain or loss on disposal is recognized in statement of profit & loss.
II. Transition to IND AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognized as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
III. Depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual *The useful life considered above is on the basis of the agreement with third party regarding sale of electricity generated from this plant.
Depreciation methods, useful lives and residual values are reviewed at each financial year end and changes, if any, are accounted for prospectively. Depreciation on additions to or on disposal of assets is calculated on pro-rata basis i.e. from (up to) the date on which the property, plant and equipment is available for use (disposed off).
Assets having cost up to Rs.5000/- have been fully depreciated in the year of acquisition by leaving Re.1 as a nominal value for its identity in fixed assets register.
b. Intangible assets
I. Recognition and measurement
Intangible Assets are recognized, if the future economic benefits attributable to the assets are expected to flow to the company and cost of the asset can be measured reliably. All other expenditure is expensed as incurred.
Intangible assets are measured at cost less any accumulated amortization and impairment losses, if any and are amortized over their respective individual estimated useful life on straight line method. It is amortized from the point at which the asset is available for use.
Cost of an item of intangible asset comprises its purchase price, after deducting trade discount and rebates, and including import duties, non-refundable purchase taxes, any directly attributable cost of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.
The estimated useful lives are as follows:
Computer Software 10 years
The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period and adjusted prospectively, if appropriate.
An intangible asset is derecognized when no future economic benefits are expected to arise from the continued use of the asset or upon disposal. Any gain or loss on disposal is recognized in statement of profit & loss.
Transition to Ind AS
On transition to Ind AS, company has elected to continue with the carrying value of all of its intangible assets recognized as at 1 April 2016, measured as per the previous GAAP and use that carrying value as the deemed cost of such intangible assets.
c. Impairment of non-financial assets
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash flows are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Units (''CGUs'').
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the statement of profit and loss.
In respect of assets for which impairment loss has been recognized in prior periods, the company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. After impairment, depreciation or amortization is provided on the revised carrying amount of the assets over its remaining useful life.
d. Financial instruments
I. Initial recognition
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are initially recognized at fair value plus transaction costs directly attributable to its acquisition. The transaction costs incurred for the purchase of financial assets held at fair value through profit and loss are expensed in the statement of profit and loss immediately.
II. Subsequent measurement
1) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. When the financial asset is derecognized or impaired, the gain or loss is recognized in the statement of profit and loss.
2) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in statement of profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to the statement of profit and loss.
Equity instruments are subsequently measured at fair value. On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment by investment basis. Fair value gains and losses recognized in OCI are not reclassified to the statement of profit and loss.
3) Financial assets at fair value through profit and loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit and loss.
4) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts is approximate to the fair value due to the short maturity of these instruments.
5) Investment in subsidiaries
Investment in subsidiaries is carried at cost less impairment, if any, in the separate financial statements.
III. Impairment of financial assets
The company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost and FVOCI debt instruments. Except trade receivables, expected credit losses are measured at an amount equal to the twelve month expected credit loss unless there has been a significant increase in credit risk from initial recognition, in which case those are measured at lifetime ECL.
In case of trade receivables, the Company follows the simplified approach which requires expected lifetime losses to be recognized from the initial recognition of the trade receivables. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.
IV. Derecognition
1) Financial Assets
Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
If the company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
2) Financial Liabilities
The company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expired.
V. Reclassification of Financial Assets and Financial liabilities
The company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. If the company reclassifies financial assets, it applies prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The company does not restate any previously recognized gains, losses (including impairment gains or losses) or interest.
VI. Derivative financial instruments
The company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency risk. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value at the end of each reporting period. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are recognized immediately in the statement of profit and loss.
VII. Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the company has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
e. Fair Value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using other valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
Fair value for measurement and/ or disclosure purposes are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 -This includes financial instruments measured using quoted prices (Unadjusted) in active markets for identical assets and liabilities.
Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 - If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
f. Inventories
Inventories (including Stock-in-transit) of Finished Goods, Stock in Trade, Work in progress, Raw materials, packing materials and Stores & Spares are stated at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Cost includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Cost of Raw Materials, Packing Materials, Stores and Spares, Stock in Trade and other products are determined on First in first out (FIFO) basis and are net of GST.
Cost of Work in progress and Finished Goods is determined on First in first out (FIFO) basis considering direct material cost and appropriate portion of manufacturing overheads based on normal operating capacity.
Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and wherever necessary, the same are written off or provision is made for such inventories. Finished goods and work in progress are written down if anticipated net realizable value declines below the carrying amount of the inventories and such write down to inventories are recognized in statement of profit & loss. When reason for such write down ceases to exists, then write down is reversed through statement of profit and loss account.
g. Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement, unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent liabilities are not recognized but are disclosed in notes.
Contingent assets are not disclosed in the financial statements unless an inflow of economic benefits is probable.
h. Revenue Recognition
I. Sale of goods
Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognized when the significant risk and rewards of ownership have been transferred to the customer and it is probable that the economic benefits associated with the transaction will flow to the company. There is no continuing management involvement with the goods to the degree usually associated with the ownership. The amount of revenue and associated costs can be measured reliably. Amounts disclosed as revenue are inclusive of excise duty and net of GST, returns, trade discounts and volume rebates.
Incentives on exports are recognized in books after due consideration of certainty of utilization/ receipt of such incentives.
II. Sale of Services
Revenue from sale of services is recognized as per the terms of the contract with customers based on the stage of completion when the outcome of the transactions involving rendering of services can be estimated reliably.
III. Interest Income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the asset''s net carrying amount on initial recognition. Interest income is included in other income in the statement of profit and loss.
IV. Dividends
Dividend income is recognized when the Company''s right to receive dividend is established, and is included in other income in the statement of profit and loss.
V. Revenue from electricity generation
Revenue from electricity generation is recognized on the basis of electricity units generated and invoice raised on monthly basis.
i. Employee Benefits
I. Short Term Employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably
II. Defined contribution plans
Employees benefits in the form of the Company''s contribution to Provident Fund, Pension scheme, Superannuation Fund, National Pension scheme and Employees State Insurance are defined contribution schemes. The Company recognizes contribution payable to these schemes as an expense, when an employee renders the related service.
If the contribution payable exceeds contribution already paid, the deficit payable is recognized as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the end of the reporting period, the Company recognize that excess as an asset (prepaid expense) to the extent that the prepayment will lead to reduction in future payments or a cash refund.
III. Defined benefit plans
Retirement benefits in the form of gratuity are considered as defined benefit plans. The Company''s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The company provides for its gratuity liability based on actuarial valuation of the gratuity liability as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary. The company contributes to the gratuity fund, which are recognized as plan assets. The defined benefit obligation as reduced by fair value of plan assets is recognized in the Balance Sheet.
When the calculation results in a potential asset for the company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in Other Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognized in statement of profit & loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in statement of profit & loss. The company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
IV. Other long term employee benefits
Employee benefits in the form of long term compensated absences are considered as long term employee benefits. The Company''s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurement are recognized in statement of profit
& loss in the period in which they arise.
The liability for long term compensated absences are provided based on actuarial valuation as at the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary.
j. Foreign currency transactions
The financial statements are presented in Indian rupee, which is the company''s functional and presentation currency. A company''s functional currency is that of the primary economic environment in which the company operates.
Foreign currency transactions are translated into the functional currency using the exchange rate at the date of the transaction. Foreign exchange gains/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 are recognized in the statement of profit and loss.
k. Borrowing costs
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalized as part of the cost of that asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
l. Income Tax
Income tax expense comprises current and deferred tax. It is recognized in statement of profit & loss except to the extent that it relates to items recognized directly in equity or in Other Comprehensive Income
I. Current Tax
Current tax comprises the expected tax payable on the taxable income for the year after taking credit of the benefits available under the Income Tax Act and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date.
Current tax assets and liabilities are offset only if, the Company:
a) has a legally enforceable right to set off the recognized amounts; and
b) intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
II. Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences. In contrast, deferred tax assets are only recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.
The carrying value of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized based on the tax rates and tax laws that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company expects, at the end of the reporting period, to cover or settle the carrying value of its assets and liabilities.
Deferred tax assets and liabilities are offset only if:
i) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability.
m. Segment Reporting
An operating segment is defined as a component of the entity that represents business activities from which it earns revenues and incurs expenses and for which discrete financial information is available. The operating segments are based on the company''s internal reporting structure and the manner in which operating results are reviewed by the Chief Operating Decision Maker (CODM).
n. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand and short-term deposits 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.
o. Statement of cash flow
Cash flow statements are prepared in accordance with "Indirect Methodâ as explained in the Ind AS on Statement of Cash Flows (Ind AS - 7). The cash flows from operating, financing and investing activity of the company are segregated.
p. Lease
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
I. Finance Lease
Finance Lease that transfer substantially all of the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and a reduction in the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
II. Operating Lease
Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by lessor are classified as operating leases. Payments under operating lease are recorded in the Statement of Profit and Loss on a straight line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
q. Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per Share, the net profit or loss for the period attributable to Equity Shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
r. Research and Development Expenses
Research and Development Expenses of revenue nature are charged to the Statement of Profit and Loss.
*Pursuant to the approval of the Board of Directors on November 10, 2016 and Shareholders of the Company through postal ballot, results of which were declared on January 2, 2017, the Company bought back 9,41,176 equity shares (representing 1.88% of the equity capital) at a price of Rs. 850/per equity share aggregating to Rs. 80 Crores through the tender offer route, in terms of Public Announcement dated January 4, 2017. After extinguishment of 9,41,176 Equity Shares on March 27, 2017, the Issued, Subscribed and Paid-up Equity Capital of the Company reduced from 5,00,19,500 equity shares to 490,78,324 equity shares.
b. Terms/Rights attached to Issued Equity Shares
1 The Company has only one class of Equity Shares having at par value of Rs.2/- per share. Each Equity share is entitled to one vote.
2 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 preferential amounts.
3 The distribution will be in proportion to the number of Equity Shares held by the shareholders.
Mar 31, 2016
a) Basis of Accounting
These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (IGAAP) under the historical cost convention on the accrual basis. IGAAP comprises mandatory Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (''The Act'') read with rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the The Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting Policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
b) Use of estimates
The preparation of the financial statements in conformity with IGAAP requires the management to make estimates and assumptions that effect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amount of income and expenses during the period.
Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of changes in circumstances surrounding the estimates. Changes in the estimates are reflected in the financial statements in the period in which changes are made and, if material, there effects are disclosed in the notes to the financial statements.
c) Fixed Assets
(Tangible and Intangible assets)
Fixed Assets are stated at Cost of Acquisition (Net of recoverable taxes, wherever applicable), less accumulated depreciation and impairment loss, if any. Cost is inclusive of freight, duties, levies, installation expenses and any directly attributable cost of bringing the assets to their working condition for intended use which is capitalized till the assets are ready to be put to use.
Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.
Projects/ Units under which assets are not ready for their intended use are disclosed under Capital Work-In-Progress.
d) Impairment
Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
An impairment loss is recognized in the Statement of Profit and Loss if the carrying amount of an asset exceeds its recoverable amount.
e) Depreciation and Amortization Tangible Assets :
Depreciation on Tangible Assets is provided on Written Down Value Method (WDV) at the rate and in the manner based on the useful life of the assets as prescribed in Schedule II of the Companies Act, 2013. On the addition of the assets, depreciation has been provided from the day on which the asset was actually put to use. Depreciation in case of disposal/sale of assets is provided up to the date of disposal/sale of assets on pro-rata basis. Assets having cost up to Rs.5000/- have been fully depreciated in the year of acquisition by leaving Re.1 as a nominal value for its identity in fixed assets register.
Intangible Assets :
Amortization in respect of intangible assets is provided on Straight Line basis considering 10 years as the estimated period of its economic life.
f) Revenue Recognition
Revenue from sale of goods is recognized when risk and rewards in respect of ownership of goods are transferred to the customers and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods.
Revenue from sale of products is stated exclusive of Returns, Sales Tax/VAT and applicable Rebates & Discounts as per Policy of the Company.
Revenue from Wind mill electricity generation is recognized on the basis of electricity units generated and invoice raised on monthly basis.
Interest income is accounted for on accrual basis taking into account, the amount outstanding and applicable interest rate. Dividend income on Investments is accounted for, when the right to receive the payment is established. Rental income is also accounted for on accrual basis.
g) Inventories
- Inventories of Raw Materials and Packing Materials are valued at Cost (net of CENVAT) on first-in first-out basis.
- Inventory of Work-in-Progress is valued at cost of Raw Material plus conversion cost wherever applicable.
- Finished Goods are valued at the lower of Cost (including overheads and excise duty) or Net Realizable Value.
- Excise duty in respect of closing inventory of Finished goods is included as a part of inventory.
h) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.
i) Foreign Currency Transactions
(i) Initial Recognition:
Foreign Currency Transactions are recorded in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency on the date of the transaction.
(ii) Conversion:
At the year-end, monetary items denominated in the foreign currencies are converted into equivalent rupee value by applying prevalent exchange rates at the year-end.
(iii) Exchange Differences:
All the exchange differences arising on settlement / reinstatement of foreign currency transactions are adjusted in the Statement of Profit and Loss.
(iv) Forward Exchange and Option Contracts not intended for trading or speculation purposes:
The Company''s derivative instruments comprise of forward exchange and option contracts which are not intended for trading or speculation purposes. The premium paid or discount arising at the inception of forward exchange/ option contract is amortized and recognized as an expense/ income over the life of the contract. Gains/ Losses arising on settlement are recognized as an expense/ income except in case where they relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.
j) Investments
Current investments are carried at lower of cost or quoted/ fair value. Long term investments are stated at cost.
k) Employee Benefits
(i) Defined Contribution Plans:
The Company has Defined Contribution Plans for post employment benefits namely Provident Fund and Superannuation Fund which are administered by appropriate Authorities.
The Company contributes to a Government administered Provident Fund, Employees'' Deposit Linked Insurance Scheme and Employee Pension Scheme, on behalf of its employees and has no further obligation beyond making its contribution.
The Superannuation Fund applicable to certain employees is a Defined Contribution Plan as the Company contributes to Employees Group Superannuation Scheme which is administered by an Insurance Company and has no further obligation beyond making the payment to the Insurance Company.
The Company contributes to State Plans namely Employees'' State Insurance Fund and has no further obligation beyond making the payment to them.
The Company''s contributions to the above funds are charged to revenue every year.
(ii) Defined Benefit Plans:
The Company has a Defined Benefit Plan namely Gratuity and Pension covering its employees. The Gratuity scheme is funded through Group Gratuity-cum-Life Assurance Scheme and the liability for the Defined Benefit Plan of Gratuity and Pension is provided based on an actuarial valuation at the year-end.
iii) Other Employee Benefits:
The employees of the Company are entitled to leave encashment and incentives as per the Policy of the Company. The liability in respect of the same is provided based on an actuarial valuation at the year-end.
l) Leases
Lease payments under operating leases are recognized as expense in the statement of profit and loss account on a straight-line basis over the lease term.
m) Taxes on Income
Provision for Income Tax comprises of Current Tax and Deferred Tax charge. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred Tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income and expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is "virtual certaintyâ that sufficient future taxable income will be available against which such deferred tax assets will be realized.
n) Provisions and Contingencies
The Company recognizes a Provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.
A disclosure for a Contingent Liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure as specified in Accounting Standard 29 -"Provisions, Contingent Liabilities and Contingent Assetsâ is made.
Contingent Assets are not recognized in the Financial Statements.
o) Earnings Per Share (EPS)
The earnings considered in ascertaining the Company''s EPS, is the Net Profit after Tax. The number of Equity Shares used in computing basic EPS is the weighted average number of Equity Shares outstanding during the year.
p) Research and Development Expenses
Research and Development Expenses of revenue nature are charged to Profit and Loss Account.
q) Government Grants
Where a grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related assets. Other Government grants or subsidies are credited to Profit and Loss Account or adjusted from related expenses.
r) Principles of Consolidation
The Consolidated Financial Statements relate to Dhanuka Agritech Ltd. (''the Company'') and its Subsidiary Company -Dhanuka Agri-Solutions Private Limited. The Consolidated Financial Statements have been prepared on the following basis:
i) The Financial Statements of the Company and its Subsidiary Company are combined on a line by line basis by adding together the book values of like items of Assets, Liabilities, Income and Expenses after fully eliminating intra-group balances and intra-group transactions in accordance with Accounting Standard (AS) - 21 "Consolidated Financial Statements."
ii) As far as possible, the Consolidated Financial Statements are prepared using uniform Accounting Policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company''s separate Financial Statements.
Mar 31, 2015
A) Basis of Accounting
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles (GAAP) under the historical
cost convention on the accrual basis. GAAP comprises mandatory
Accounting Standards as prescribed under section 133 of the Companies
Act, 2013 (The Act) read with rule 7 of the Companies (Accounts) Rules,
2014, the provisions of the The Act (to the extent notified) and
guidelines issued by the Securities and Exchange Board of India (SEBI).
Accounting Policies have been consistently applied except where a
newly-issued accounting standard is initially adopted or a revision to
an existing accounting standard requires a change in the accounting
policy hitherto in use.
b) Use of estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that effect
the reported balances of assets and liabilities and disclosures
relating to contingent liabilities as at the date of the financial
statements and reported amount of income and expenses during the
period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates are
made as the management becomes aware of changes in circumstances
surrounding the estimates. Changes in the estimates are reflected in
the financial statements in the period in which changes are made and,
if material, there effects are disclosed in the notes to the financial
statements.
c) Fixed Assets
(Tangible and Intangible assets)
Fixed Assets are stated at Cost of Acquisition (Net of recoverable
taxes, wherever applicable), less accumulated depreciation and
impairment loss, if any. Cost is inclusive of freight, duties, levies,
installation expenses and any directly attributable cost of bringing
the assets to their working condition for intended use which is
capitalized till the assets are ready to be put to use.
Subsequent expenditures related to an item of fixed asset are added to
its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Projects/ Units under which assets are not ready for their intended use
are disclosed under Capital Work-In-Progress.
d) Impairment
Fixed assets are reviewed for impairment whenever events or changes in
circumstances indicate that their carrying amount may not be
recoverable.
An impairment loss is recognized in the Statement of Profit and Loss if
the carrying amount of an asset exceeds its recoverable amount.
e) Depreciation and Amortisation Tangible Assets :
Depreciation on Tangible Assets is provided on Written Down Value
Method (WDV) at the rate and in the manner based on the useful life of
the assets as prescribed in Schedule II of the Companies Act, 2013. On
the addition of the assets, depreciation has been provided from the day
on which the asset was actually put to use. Depreciation in case of
disposal/sale of assets is provided up to the date of disposal/sale of
assets on pro-rata basis. Assets having cost upto Rs.5000/- have been
fully depreciated in the year of acquisition.
Intangible Assets :
Amortization in respect of intangible assets is provided on Straight
Line basis considering 10 years as the estimated period of its economic
life.
f) Revenue Recognition
Revenue from sale of goods is recognized when risk and rewards in
respect of ownership of goods are transferred to the customers and
no significant uncertainty exists regarding the amount of
consideration that is derived from the sale of goods.
Revenue from sale of products is stated exclusive of Returns, Sales
Tax/VAT and applicable Rebates & Discounts as per Policy of the
Company.
Revenue from Wind mill electricity generation is recognized on the
basis of electricity units generated and invoice raised on monthly
basis.
Interest income is accounted for on accrual basis taking into account,
the amount outstanding and applicable interest rate. Dividend income
on Investments is accounted for, when the right to receive the payment
is established. Rental income is also accounted for on accrual basis.
g) Inventories
- Inventories of Raw Materials and Packing Materials are valued at Cost
(net of CENVAT) on first-in first-out basis.
- Inventory of Work-in-Progress is valued at cost of Raw Material plus
conversion cost wherever applicable.
- Finished Goods are valued at the lower of Cost (including overheads
and excise duty) or Net Realizable Value.
- Excise duty in respect of closing inventory of Finished goods is
included as a part of inventory.
h) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the company are segregated. i)
Foreign Currency Transactions
(i) Initial Recognition: Foreign Currency Transactions are recorded in
the reporting currency, by applying to the foreign currency amount, the
exchange rate between the reporting currency and the foreign currency
on the date of the transaction.
(ii) Conversion: At the year-end, monetary items denominated in the
foreign currencies are converted into equivalent rupee value by
applying prevalent exchange rates at the year-end.
(iii) Exchange Differences: All the exchange differences arising on
settlement / reinstatement of foreign currency transactions are
adjusted in the Statement of Profit and Loss.
(iv) Forward Exchange Contracts not intended for trading or speculation
purposes: The Company's derivative instruments comprise of forward
exchange contracts which are not intended for trade or speculation
purposes.
j) Investments
Current investments are carried at lower of cost or quoted /fair value.
Long term investments are stated at cost.
k) Employee Benefits
i) Defined Contribution Plans:
The Company has Defined Contribution Plans for post employment benefits
namely Provident Fund and Superannuation Fund which are administered by
appropriate Authorities.
The Company contributes to a Government administered Provident Fund,
Employees' Deposit Linked Insurance Scheme and Family Pension Fund, on
behalf of its employees and has no further obligation beyond making its
contribution. The Superannuation Fund applicable to certain employees
is a Defined Contribution Plan as the Company contributes to Officers'
Superannuation Scheme which is administered by an Insurance Company and
has no further obligation beyond making the payment to the Insurance
Company. The Company contributes to State Plans namely Employees State
Insurance Fund and has no further obligation beyond making the payment
to them.
The Company's contributions to the above funds are charged to revenue
every year.
ii) Defined Benefit Plans:
The Company has a Defined Benefit Plan namely Gratuity and Pension
covering its employees. The Gratuity scheme is funded through Group
Gratuity-cum-Life Assurance Scheme and the liability for the Defined
Benefit Plan of Gratuity and Pension is provided based on an actuarial
valuation at the year-end. iii) Other Employee Benefits:
The employees of the Company are entitled to leave encashment and
incentives as per the Policy of the Company The liability in respect of
the same is provided based on an actuarial valuation at the year-end.
l) Leases
Lease payments under operating leases are recognized as expense in the
statement of profit and loss for the year to which they pertains.
m) Taxes on Income
Provision for Income Tax comprises of Current Tax and Deferred Tax
charge. Current Income Tax is measured at the amount expected to be
paid to the tax authorities in accordance with the Indian Income Tax
Act, 1961.
Deferred Tax is recognized, subject to consideration of prudence, on
timing differences, being difference between taxable and accounting
income and expenditure that originate in one period and are capable of
reversal in one or more subsequent period(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
assets will be realized.
n) Provisions and Contingencies
The Company recognizes a Provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation.
A disclosure for a Contingent Liability is made when there is possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation or
a present obligation that the likelihood of outflow of resources is
remote, no provision or disclosure as specified in Accounting Standard
29 -"Provisions, Contingent Liabilities and Contingent Assets" is made.
Contingent Assets are not recognized in the Financial Statements.
o) Earnings Per Share (EPS)
The earnings considered in ascertaining the Company's EPS, is the Net
Profit after Tax. The number of Equity Shares used in computing basic
EPS is the weighted average number of Equity Shares outstanding during
the year. p) Research and Development Expenses Research and
Development Expenses of revenue nature are charged to Profit and Loss
Account.
q) Government Grants
Where a grant or subsidy relates to an asset, its value is deducted in
arriving at the carrying amount of the related assets. Other
Government grants or subsidies are credited to Profit and Loss Account
or adjusted from related expenses. r) Deferred Revenue Expenditure
Revenue expenditure where benefit is expected to accrue over a longer
period is amortized equally over a period of 5 years.
s) Principles of Consolidation
The Consolidated Financial Statements relate to Dhanuka Agritech Ltd.
(the Company') and its Subsidiary Company - Dhanuka Agri- Solutions
Private Limited. The Consolidated Financial Statements have been
prepared on the following basis:
i) The Financial Statements of the Company and its Subsidiary
Company are combined on a line by line basis by adding together the
book values of like items of Assets, Liabilities, Income and Expenses
after fully eliminating intra-group balances and intra-group
transactions in accordance with Accounting Standard (AS) - 21
"Consolidated Financial Statements."
ii) As far as possible, the Consolidated Financial Statements are
prepared using uniform Accounting Policies for like transactions and
other events in similar circumstances and are presented in the same
manner as the Company's separate Financial Statements.
Mar 31, 2012
Not Available
Mar 31, 2011
A) Basis of Accounting:
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting with the
accounting principles generally accepted in India (GAAP) and comply
with the mandatory Accounting standards (AS) issued by the Institute
of Chartered Accountants of India to the extent applicable and with the
relevant provisions of the Companies Act, 1956.
b) Fixed Assets:
Fixed Assets are stated at cost of acquisition (net of CENVAT, wherever
applicable), less accumulated depreciation till the end of financial
year. Cost is inclusive of freight, duties, levies, installation
expenses and any directly attributable cost of bringing the assets to
their working condition for intended use which are capitalized till the
assets are ready to be put to use.
c) Depreciation:
Depreciation on fixed assets is provided on written down value method
(WDV) at the rate and in the manner prescribed in schedule XIV to the
Companies Act, 1956. On the addition of the assets, depreciation has
been provided from the day on which the asset was actually put to use.
Depreciation in case of disposal/sale of assets is provided up to the
date of disposal/sale of assets on pro rata basis.
d) Revenue Recognition:
Revenue from sales of goods is recognized when risk and rewards in
respect of ownership of goods are transferred to the customers and no
significant uncertainty exists regarding the amount of consideration
that is derived from the sale of goods.
Revenue from sales of products is stated exclusive of Returns, Sales
TaxA^AT, and applicable rebates & discounts as per policy of the
Company.
Insurance claims are booked on the basis of best estimates/loss as
surveyed/assessed.
Interest income is accounted for on accrual basis.
e) Inventories:
- Inventories of raw materials, packing materials and work in progress
(WIP) are valued at the lower of cost (net of CENVAT) and net
realizable value on First in First out basis.
- Finished Goods are valued at the lower of cost (including overheads
and excise duty) or net realizable value.
- Costs are generally calculated at standards adjusted to actual in
case of raw materials & packing materials & in the case of manufactured
inventories & the work in progress (WIP) same is valued at cost. The
finished goods cost includes cost of conversion and other cost incurred
in bringing the inventories to their present location and condition.
- Excise duty in respect of closing inventory of finished goods is
included as a part of inventory.
- CENVAT credits in respect of raw materials consumed and packing
materials used for manufacture of goods is deducted from the cost of
raw materials and packing materials consumed in the production of
finished goods.
f) Foreign Currency Transactions:
(i) Initial Recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
(ii) Conversion:
At the year end, monetary items denominated in the foreign currencies
are converted into equivalent rupee value by applying prevalent
exchange rates at the year end.
(iii) Exchange Differences:
All the exchange differences arising on settlement / reinstatement of
foreign currency transactions are adjusted in the Profit and Loss
Account, except in cases where they relate to the acquisition of fixed
assets acquired from outside India, in that case they are adjusted in
the cost of the corresponding assets.
(iv) Forward Exchange Contracts not intended for trading or speculation
purposes:
The Companys derivative instruments comprise of forward exchange
contracts which are not intended for trade or speculation purposes. In
respect of Derivative contracts, provision for losses on restatement
and gains/losses on settlement are recognized along with the underlying
transaction and charged to Profit and Loss Account.
g) Investments:
Unquoted Shares are valued at cost.
h) Employee Benefits:
i) Defined Contribution Plans:
The Company has Defined Contribution plans for post employment benefits
namely Provident Fund and Superannuation Fund which are administered
through appropriate authorities.
The Company contributes to a Government administered Provident Fund,
Employees Deposit Linked Insurance Scheme and Family Pension Fund on
behalf of its employees and has no further obligation beyond making its
contribution.
The Superannuation Fund applicable to certain employees is a defined
contribution plan as the Company makes contributions to Officers
Superannuation Scheme which is administered by an insurance Company and
has no further obligation beyond making the payment to the insurance
Company.
The Company makes contributions to State plans namely Employees State
Insurance Fund and has no further obligation beyond making payment to
them.
The Companys contributions to the above funds are charged to revenue
every year.
ii) Defined Benefit Plans:
The Company has a Defined Benefit Plan namely Gratuity covering its
employees. The gratuity scheme is funded through Group Gratuity-cum-
Life Assurance Scheme and the liability for the defined benefit plan of
Gratuity and Pension is provided based on an actuarial valuation at the
year-end.
(iii) Termination benefits are recognized as an expense as and when
incurred.
(iv) Other Employee Benefits:
The employees of the Company are entitled to leave encashment and long
service awards as per the policy of the Company. The liability in
respect of the same is provided, based on an actuarial valuation
carried out by an independent actuary at the year-end.
(i) Taxes on Income:
Provision for Income Tax comprises of current tax,
deferred tax charge or release. Current Income Tax is measured at the
amount expected to be paid to the tax authorities in accordance with
the Indian Income Tax Act, 1961.
Deferred Tax is recognized, subject to consideration of prudence, on
timing differences, being difference between taxable and accounting
income and expenditure that originate in one period and are capable of
reversal in one or more subsequent period (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
assets will be realized.
(j) Provisions and Contingencies:
Provision, Contingent Liabilities and Contingent
Assets:
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation.
A disclosure for a contingent liability is made when there is possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation or
a present obligation that the likelihood of outflow of resources is
remote, no provision or disclosure as specified in Accounting Standard
29 -"Provisions, Contingent Liabilities and Contingent Assets" is made.
Contingent Assets are not recognised in the financial statements.
k) Earnings Per Share (EPS)
The earnings considered in ascertaining the Companys EPS comprises the
net profit after tax. The number of shares used in computing basic EPS
is the weighted average number of shares outstanding during the year.
Dilutive potential equity shares are deemed to be converted as of the
beginning of the year, unless they have been issued at a later date.
The number of shares used for computing the diluted EPS is the weighted
average number of shares outstanding during the year after considering
the dilutive potential equity shares.
Mar 31, 2010
A) Basis of Accounting:
The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting with the
accounting principles generally accepted in India (GAAP) and comply
with the mandatory Accounting standards (AS) issued by the Institute
of Chartered Accountants of India to the extent applicable and with the
relevant provisions of the Companies Act, 1956.
b) Fixed Assets:
Fixed Assets are stated at cost of acquisition (net of CENVAT, wherever
applicable), less accumulated depreciation till the end of Financial
Year. Cost is inclusive of freight, duties, levies, installation
expenses and any directly attributable cost of bringing the assets to
their working condition for intended use which are capitalized till the
assets are ready to be put to use.
c) Depreciation:
Depreciation on fixed assets is provided on written down value method
(WDV) at the rate and in the manner prescribed in schedule XIV to the
Companies Act,1956 .On the addition of the assets depreciation have
been provided from the day on which the asset was actually put to use.
Depreciation in case of disposal/sale of assets is provided upto the
date of disposal/sale of assets on pro rata basis.
d) Revenue Recognition:
Revenue from sales of goods is recognized when risk and rewards in
respect of ownership of goods are transferred to the customers. Revenue
from sales of products is stated exclusive of returns, Sales Tax/VAT,
and applicable rebates & discounts as per policy of the Company.
Insurance claims are booked on the basis of best estimates/loss as
surveyed/ assessed.
e) Inventories:
Inventories of raw materials, packing materials and work in progress
(WIP) are valued at the lower of cost (net of CENVAT) and net
realizable value on First in First out basis.
Finished Goods are valued at the lower of cost (including overheads and
excise duty) or net realizable value.
Costs are generally calculated at standards adjusted to actual in case
of raw materials, packing materials; in the case of manufactured
inventories , WIPs valued at cost .Finished goods cost includes cost
of conversion and other cost incurred in bringing the inventories to
their present location and condition.
Excise duty in respect of closing inventory of finished goods is
included as a part of inventory.
CENVAT credits in respect of raw materials consumed and packing
materials used for manufacture of Goods is deducted from the cost of
raw materials and packing materials consumed in the production of
finished goods.
f) Foreign Currency Transactions:
(i) Initial Recognition :
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
(ii) Conversion :
At the year end, monetary items denominated in the foreign currencies
are converted into equivalent rupee value by applying prevalent
exchange rates at the year end.
(iii) Exchange Differences:
All the exchange differences arising on settlement / reinstatement of
foreign currency transactions are adjusted in the Profit and Loss
Account, except in cases where they relate to the acquisition of fixed
assets acquired from outside India, in which case they are adjusted in
the cost of the corresponding assets.
(iv) Forward Exchange Contracts not intended for trading or speculation
purposes
The Companys derivative instruments comprises of forward exchange
contracts which are intended for trade or speculation purposes. In
respect of Derivatives contracts, provision for losses on restatement
and gains/losses on settlement are recognized along with the underlying
transaction and charged to Profit and Loss Account.
g) Investments:
Unquoted Shares are valued at cost.
h) Retirement Benefits:
The Company has floated various Schemes of retirement benefits for the
welfare of employees, which comprise payments under approved Provident
Fund Plans, Leave Encashment and Gratuity to eligible employees.
Payments under approved Provident Funds plans are charged to revenue.
Liability in respect of Leave Encashment is provided as per the policy
of the Company on accrual basis. The gratuity liability is provided and
charged off as revenue expenditure based on actuarial valuation.
(i) Taxes on Income:
Provision for Income Tax comprises of current tax, deferred tax charge
or release. Current Income Tax is measured at the amount expected to be
paid to the tax authorities in accordance with the Indian Income Tax
Act, 1961.
Deferred Tax is recognized, subject to consideration of prudence, on
timing differences, being difference between taxable and accounting
income and expenditure that originate in one period and are capable of
reversal in one or more subsequent period(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
assets will be realized.
(j) Provisions and Contingencies:
Contingent liabilities are estimated on the basis of available
information and are disclosed by way of notes on accounts. These are
reviewed at each Balance Sheet date and adjusted to reflect the current
Management estimates.
k) Earnings Per Share (EPS)
The earnings considered in ascertaining the Companys EPS comprises the
net profit after tax. The number of shares used in computing basic EPS
is the weighted average number of shares outstanding during the year.
Dilutive potential equity shares are deemed to be converted as of the
beginning of the year, unless they have been issued at a later date.
The number of shares used for computing the diluted EPS is the weighted
average number of shares outstanding during the year after considering
the dilutive potential equity shares.
l) Deferred Revenue Expenditure:
Revenue expenditure where benefit is expected to accrue over a longer
period is amortized equally over a period of 5 years.