Home  »  Company  »  Excel Crop Care Ltd.  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Excel Crop Care Ltd. Company

Mar 31, 2016

1. CORPORATE INFORMATION

Excel Crop Care Limited (the Company) is a public company domiciled in India. Its shares are listed on two stock exchanges in
India. The Company is engaged in the business of agro chemicals and manufactures technical grade pesticides and formulations. The
Company also manufactures and markets other agri inputs like soil enrichers, bio-pesticides, plant growth regulators and soil and
plant nutrition products. The Company has presence in both domestic and international markets.

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting
standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts)
Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for
the change in accounting policy explained below.

2.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Change in accounting policies

The Company has adopted component accounting as required under Schedule II to the Companies Act, 2013, from 1 April, 2015. The
Company was previously not identifying components of fixed assets separately for depreciation purposes; rather, a single useful
life/depreciation rate was used to depreciate each item of fixed assets.

Considering the applicability of Schedule II of the Companies Act, 2013, the management has carried out the exercise of
identifying and determining the cost of each components/parts of the assets and its lives separately with the help of technical
advice. Based on the Technical advice, the management believes that the useful lives of the components/parts so identified are
not different from the useful lives of the principal assets, except for Plant and Machinery, where management believes that the
useful lives of the components/parts so identified are different from the useful lives of the principal assets. As a result, the
charge for depreciation is higher by Rs.2,03.66 lacs for the year ended 31 March, 2016.

(a) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting
period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about
these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.

(b) Tangible Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost comprises the
purchase price and directly attributable cost of bringing the asset to its working condition for its intended use. Borrowing
costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also
included to the extent they relate to the period till such assets are ready to be put to use. Any trade discounts and rebates are
deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from
the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets,
including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and
loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and
the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(c) Depreciation:

(i) In respect of Buildings, Electrical Installations, Furniture & Fixtures, Vehicles, Laboratory Equipments and Office
Equipments depreciation has been provided on straight line (SL) basis using the rates arrived at based on the useful lives as
those prescribed under the Schedule II to the Companies Act, 2013.

(ii) Leasehold Improvements are depreciated on straight line basis over the lease period up to 60 months.

(iii) The Company identifies and determines cost of asset significant to the total cost of the asset having useful life that is
materially different from that of the remaining life.

(d) Intangible Assets and Amortisation:

(i) Intangible assets are stated at cost less accumulated amortisation.

(ii) Amortisation:

Data Registration expenses (including registration fees) are amortised on a straight line basis over a period of three years,
Computer software/ licence fees and data compensation charges are amortised on a straight line basis over a period of four years
and Technical Know How are amortised on a straight line basis over a period of five years.

(iii) Research and Development Costs:

Research costs (other than cost of Fixed Assets acquired) are charged as an expense in the year in which they are incurred and
are reflected under the appropriate heads of accounts. Development expenditure incurred on an individual project is carried
forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over
the period of expected future sales from the related project, not exceeding ten years.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when
events or changes in circumstances indicate that the carrying value may not be recoverable.

(e) Impairment of tangible and intangible assets:

(i) The carrying amounts of assets are reviewed for impairment at each reporting date if there is any indication of impairment
based on internal/ external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and risks specific to the asset.

(ii) After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(iii) A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the
carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation
if there was no impairment.

(f) Borrowing costs:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised as a part of the cost of the respective
asset. All other borrowing costs are expensed in the period they occur. Interest and other costs incurred for acquisition and
construction of qualifying assets, up to the date of commissioning/installation, are capitalised as part of the cost of the said
assets.

(g) Leased Assets:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are
classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a
straight line basis over the lease term. Lease income is recognised in the statement of profit and loss on a straight line basis
over the lease term.

(h) Investments:

Presentation and Disclosure

Investments, which are readily realisable and intended to be held for not more than one year from reporting date are classified
as current investments. All other investments are classified as long term investments.

Recognition and Measurement

Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term
investments are carried at cost of acquisition. However, provision for diminution in value is made to recognise a decline, other
than temporary, in the value of the investments.

(j) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can
be reliably measured. Sale of Goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Gross turnover
includes Excise Duty but does not include Sales Tax and VAT.

Export benefits

Duty free imports of raw materials under Advance License for Imports as per the Export and Import Policy are matched with the
exports made against the said licenses and the benefit / obligation is accounted by making suitable adjustments in raw material
consumption.

The benefit accrued under the Duty Drawback scheme and other schemes as per the Export and Import Policy in respect of exports
made under the said Schemes is included under the head "Revenue from Operations" as ''Incentives on Exports''.

Income from Services

Revenue from service contracts are recognised pro-rata over the period of the contract as and when services are rendered and are
net of service tax. Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Interest
income is included under the head "Other Income" in the statement of profit and loss.

Dividends

Revenue is recognised when the shareholders'' right to receive payment is established by the Reporting date.

Other Income

Certain items of income such as insurance claims, overdue interest from customers and other benefits are considered to the extent
the amount is ascertainable/accepted by the parties.

(k) Foreign currency translations:

(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:

Foreign currency monetary items are reported using the closing exchange rate on the Reporting date. Non-monetary items which are
carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the
transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency
are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences:

Exchange differences arising on the settlement of monetary items or on reporting monetary items of Company at rates different
from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as
income or as expenses in the year in which they arise.

(iv) Forward Exchange Contracts:

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of
the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income
or as expense for the year.

(v) Accounting for Derivatives:

The Company uses derivative financial instruments such as currency swap and interest rate swaps to hedge its risks associated
with foreign currency fluctuations and interest rate fluctuations. As per ICAI announcement regarding accounting for derivative
contracts, other than covered under AS 11, these are marked to market on the portfolio basis and net loss after considering the
offsetting effect on the underlying hedged item is charged to the statement of profit and loss. Net gains are ignored.

Marked to market of derivative contracts entered into for hedging with underlying assets/liabilities are adjusted with the
corresponding assets/ liabilities.

(l) Retirement and other employee benefits:

(i) Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than
the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an
expenditure, when an employee renders the related service.

(ii) Retirement benefits in the form of Superannuation Fund is a defined contribution scheme and the contribution is charged to
the statement of profit and loss for the year when the contribution accrues. There are no obligations other than the contribution
payable to the Superannuation Fund Trust. The scheme is funded with an Insurance company in the form of a qualifying insurance
policy.

(iii) Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected
unit credit method made at the end of each financial year. The scheme is funded with an Insurance company in the form of a
qualifying insurance policy.

(iv) Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee benefit.
The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused
entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for
measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected
unit credit method at the year-end.

(v) Actuarial gains / losses are recognised immediately to the statement of profit and loss and are not deferred for gratuity and
leave benefits.

(vi) Payments made under the Voluntary Retirement Scheme are charged to the statement of profit and loss immediately.

(m) Income Taxes:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income-tax Act, 1961 enacted in India. Deferred income taxes reflects the impact of current
year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier
years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Reporting date. Deferred
tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same
governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient
future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised against future taxable profits.

Wealth Tax is provided in accordance with the provisions of the Wealth Tax Act, 1957.

(n) Earnings Per Share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders
(after deducting attributable taxes) 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.

(o) Provisions:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow
of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not
discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting
date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.

(p) Contingent Liability:

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not
recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured
reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.

(q) Cash and Cash equivalents:

Cash and cash equivalents in the Cash Flow Statement comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.

(r) Segment Reporting:

Identification of segments:

Segments are identified in line with AS-17 "Segment Reporting", taking into consideration the internal organisation and
management structure as well as the differential risk and returns of the segment.

Based on the Company''s business model, Agri Inputs have been considered as the only reportable business segment and hence no
separate disclosures provided in respect of its single business segment. The analysis of geographical segments is based on the
areas in which major operating divisions of the Company operate.

Segment Policies:

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the
financial statements of the Company as a whole.

(s) Corporate Social Responsibility (CSR) expenditure:

The CSR spent for the year is charged off to the statement of profit and loss as an expense


Mar 31, 2015

(a) Use of estimates:

The preparation of fnancial statements in conformity with generally accepted accounting principles requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities at the date of the fnancial statements and the results of operations during the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(b) Tangible Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and directly attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fxed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(c) Depreciation:

(i) In respect of Buildings, Plant & Machinery, Electrical Installations and Technical books, depreciation has been provided on Straight Line (SL) basis using the rates arrived at based on the useful lives as those prescribed under the Schedule II to the Companies Act, 2013.

(ii) In respect of its others assets i.e. Furniture & Fixtures, Vehicles, Laboratory Equipments and Offce Equipments, depreciation is provided on written down value basis. With effect from 1st April 2014, the Company has prospectively changed its method of providing depreciation in respect of these assets to straight line method basis based on useful life as those prescribed under the Schedule II to the Companies Act, 2013.

(iii) Leasehold Improvements are depreciated on straight line basis over the lease period upto 60 months.

(iv) Effective from April 1, 2014, the Company has provided depreciation with reference to the useful lives of tangible assets as specifed in Schedule II to the Companies Act, 2013. Accordingly, the carrying amount, net of residual value, as on that date has been depreciated over the revised remaining useful lives of the assets. The Company has also rationalised the depreciation policy and has decided to provide 100% depreciation on additions to assets costing Rs. 25,000 or less. As a result, the charge for depreciation is higher by Rs. 1,81.61 lacs for the year ended 31st March, 2015.

(d) Intangible Assets and Amortisation:

(i) Intangible assets are stated at cost less accumulated amortisation.

(ii) Amortisation:

Data Registration expenses (including registration fees) are amortised on a straight line basis over a period of three years, Computer software/ licence fees and data compensation charges are amortised on a straight line basis over a period of four years and Technical Know How are amortised on a straight line basis over a period of fve years.

(iii) Research and Development Costs:

Research costs (other than cost of Fixed Assets acquired) are charged as an expense in the year in which they are incurred and are refected under the appropriate heads of accounts. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

(e) Impairment of tangible and intangible assets:

(i) The carrying amounts of assets are reviewed for impairment at each reporting date if there is any indication of impairment based on internal/ external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash fows are discounted to their present value using a pre-tax discount rate that refects current market assessments of the time value of money and risks specifc to the asset.

(ii) After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(iii) A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(f) Borrowing costs:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as a part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Interest and other costs incurred for acquisition and construction of qualifying assets, upto the date of commissioning/installation, are capitalised as part of the cost of the said assets.

(g) Leased Assets:

Leases where the lessor effectively retains substantially all the risks and benefts of ownership of the leased term, are classifed as operating leases. Operating lease payments are recognised as an expense in the statement of proft and loss on a straight-line basis over the lease term. Lease income is recognised in the statement of proft and loss on a straight-line basis over the lease term.

(h) Government Grants and Subsidies:

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received. When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

(i) Investments:

Presentation and Disclosure

Investments, which are readily realisable and intended to be held for not more than one year from reporting date are classifed as current investments. All other investments are classifed as long term investments.

Recognition and Measurement

Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost of acquisition. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the investments.

(j) Inventories:

Raw materials, containers, stores and spares

Lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the fnished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a moving weighted average basis.

Finished goods and Work-in-progress

Lower of cost and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of fnished goods includes excise duty. Cost is determined on standard costing basis which approximates the actual cost.

Traded Goods

Lower of cost and net realisable value. Cost is determined on a moving weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.

(k) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefts will fow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognised when the signifcant risks and rewards of ownership of the goods have passed to the buyer. Gross turnover includes Excise Duty but does not include Sales Tax and VAT.

Export benefts

Duty free imports of raw materials under Advance License for Imports as per the Export and Import Policy are matched with the exports made against the said licenses and the beneft/obligation is accounted by making suitable adjustments in raw material consumption.

The beneft accrued under the Duty Drawback scheme and other schemes as per the Export and Import Policy in respect of exports made under the said Schemes is included under the head "Revenue from Operations" as ''Incentives on Exports''.

Income from Services

Revenue from service contracts are recognised pro-rata over the period of the contract as and when services are rendered and are net of service tax.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Interest income is included under the head "Other Income" in the statement of proft and loss.

Dividends

Revenue is recognised when the shareholders'' right to receive payment is established by the Reporting date.

Royalties

Revenue is recognised on an accrual basis in accordance with the terms of relevant agreement.

Other Income

Certain items of income such as insurance claims, overdue interest from customers and other benefts are considered to the extent the amount is ascertainable/accepted by the parties.

(l) Foreign currency translations:

(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:

Foreign currency monetary items are reported using the closing exchange rate on the Reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences:

Exchange differences arising on the settlement of monetary items or on reporting monetary items of Company at rates different from those at which they were initially recorded during the year, or reported in previous fnancial statements, are recognised as income or as expenses in the year in which they arise.

(iv) Forward Exchange Contracts:

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of proft and loss in the year in which the exchange rates change. Any proft or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

(v) Accounting for Derivatives:

The Company uses derivative fnancial instruments such as currency swap and interest rate swaps to hedge its risks associated with foreign currency fuctuations and interest rate fuctuations. As per ICAI announcement regarding accounting for derivative contracts, other than covered under AS 11, these are marked to market on the portfolio basis and net loss after considering the offsetting effect on the underlying hedged item is charged to the statement of proft and loss. Net gains are ignored.

Marked to market of derivative contracts entered into for hedging with underlying assets/liabilities are adjusted with the corresponding assets/ liabilities.

(m) Retirement and other employee benefts:

(i) Retirement beneft in the form of provident fund is a defned contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expenditure, when an employee renders the related service.

(ii) Retirement benefts in the form of Superannuation Fund is a defned contribution scheme and the contribution is charged to the statement of proft and loss for the year when the contribution accrues. There are no obligations other than the contribution payable to the Superannuation Fund Trust. The scheme is funded with an Insurance company in the form of a qualifying insurance policy.

(iii) Gratuity liability is a defned beneft obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each fnancial year. The scheme is funded with an Insurance company in the form of a qualifying insurance policy.

(iv) Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee beneft. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee beneft for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end.

(v) Actuarial gains/losses are recognised immediately to the statement of proft and loss and are not deferred for gratuity and leave benefts.

(vi) Payments made under the Voluntary Retirement Scheme are charged to the statement of proft and loss immediately.

(n) Income Taxes:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. Deferred income taxes refects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Reporting date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profts.

Wealth Tax is provided in accordance with the provisions of the Wealth Tax Act, 1957.

(o) Earnings Per Share:

Basic earnings per share are calculated by dividing the net proft or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net proft 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.

(p) Provisions:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to refect the current best estimates.

(q) Contingent Liability:

A contingent liability is a possible obligation that arises from past events whose existence will be confrmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outfow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the fnancial statements.

(r) Cash and Cash equivalents:

Cash and cash equivalents in the Cash Flow Statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(s) Segment Reporting:

Identifcation of segments:

Segments are identifed in line with AS-17 "Segment Reporting", taking into consideration the internal organisation and management structure as well as the differential risk and returns of the segment.

Based on the Company''s business model, Agri Inputs have been considered as the only reportable business segment and hence no separate disclosures provided in respect of its single business segment. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Segment Policies:

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the fnancial statements of the Company as a whole.

(t) Corporate Social Responsibility (CSR) expenditure:

The CSR spent for the year is charged off to the statement of proft and loss as an expense.


Mar 31, 2014

(a) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(b) Tangible Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and directly attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(c) Depreciation:

(i) In respect of Buildings, Plant and Machinery and Electrical Installations, on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956, at the straight line rates specified in Schedule XIV to the Companies Act, 1956 which coincides with useful life estimated by the management, except for certain items of Plant and Machinery, rate of 10% on straight line basis has been applied based on the estimate of useful life by management in place of 5.28% specified in Schedule XIV.

(ii) Leasehold Improvements are depreciated on straight line basis over the lease period upto 60 months.

(iii) In respect of additions to/deletions from the Fixed Assets, on pro-rata basis with reference to the date of addition/deletion of the assets except for assets costing Rs. 5,000 or less which have been fully depreciated.

(iv) In respect of all other Fixed Assets, on written down value basis in accordance with Section 205(2)(a) of the Companies Act, 1956, at the rates specified in Schedule XIV to the Companies Act, 1956.

(d) Impairment of tangible and intangible assets:

(i) The carrying amounts of assets are reviewed for impairment at each reporting date if there is any indication of impairment based on internal/ external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that refects current market assessments of the time value of money and risks Specific to the asset.

(ii) After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(iii) A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(e) Intangible Assets and Amortisation:

(i) Intangible assets are stated at cost less accumulated amortisation.

(ii) Amortisation:

Data Registration expenses (including registration fees) are amortised on a straight line basis over a period of three years and computer software/licence fees and data compensation charges are amortised on a straight line basis over a period of four years.

(iii) Research and Development Costs:

Research costs (other than cost of Fixed Assets acquired) are charged as an expense in the year in which they are incurred and are refected under the appropriate heads of accounts. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

(f) Leased Assets:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classifed as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term. Lease income is recognised in the statement of profit and loss on a straight-line basis over the lease term.

(g) Government Grants and Subsidies:

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received. When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

(h) Investments:

Presentation and Disclosure

Investments, which are readily realisable and intended to be held for not more than one year from reporting date are classifed as current investments. All other investments are classifed as long term investments.

Recognition and Measurement

Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost of acquisition. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the investments.

(i) Inventories:

Raw materials, containers, stores and spares

Lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the fnished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a moving weighted average basis.

Finished goods and Work-in-progress

Lower of cost and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of fnished goods includes excise duty. Cost is determined on standard costing basis which approximates the actual cost.

Traded Goods Lower of cost and net realisable value. Cost is determined on a moving weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.

(j) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will fow to the Company and the revenue can be reliably measured.

Sale of Goods

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Gross turnover includes Excise Duty but does not include Sales Tax and VAT.

Export benefits

Duty free imports of raw materials under Advance License for Imports as per the Export and Import Policy are matched with the exports made against the said licenses and the benefit/obligation is accounted by making suitable adjustments in raw material consumption.

The benefit accrued under the Duty Drawback scheme and other schemes as per the Export and Import Policy in respect of exports made under the said Schemes is included under the head "revenue from operations" as ''Incentives on Exports''.

Income from Services

Revenue from service contracts are recognised pro-rata over the period of the contract as and when services are rendered and are net of service tax.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Interest income is included under the head "Other Income" in the statement of profit and loss.

Dividend

Revenue is recognised when the shareholders'' right to receive payment is established by the Reporting date.

Royalties

Revenue is recognised on an accrual basis in accordance with the terms of relevant agreement.

Other Income

Certain items of income such as insurance claims, overdue interest from customers and other benefits are considered to the extent the amount is ascertainable/accepted by the parties.

(k) Foreign currency translations:

(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:

Foreign currency monetary items are reported using the closing exchange rate on the Reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences:

Exchange differences arising on the settlement of monetary items or on reporting monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

(iv) Forward Exchange Contracts:

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

(v) Accounting for Derivatives:

The Company uses derivative financial instruments such as currency swap and interest rate swaps to hedge its risks associated with foreign currency fuctuations and interest rate fuctuations. As per ICAI announcement regarding accounting for derivative contracts, other than covered under AS 11, these are marked to market on the portfolio basis and net loss after considering the offsetting effect on the underlying hedged item is charged to the statement of profit and loss. Net gains are ignored.

Marked to market of derivative contracts entered into for hedging with underlying assets/liabilities are adjusted with the corresponding assets/ liabilities.

(l) Retirement and other employee benefits:

(i) Retirement benefit in the form of provident fund is a Defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expenditure, when an employee renders the related service.

(ii) Retirement benefits in the form of Superannuation Fund is a Defined contribution scheme and the contribution is charged to the statement of profit and loss for the year when the contribution accrues. There are no obligations other than the contribution payable to the Superannuation Fund Trust. The scheme is funded with an Insurance Company in the form of a qualifying insurance policy.

(iii) Gratuity liability is a Defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The scheme is funded with an Insurance company in the form of a qualifying insurance policy.

(iv) Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end.

(v) Actuarial gains/losses are recognised immediately to the statement of profit and loss and are not deferred for gratuity and leave benefits.

(vi) Payments made under the Voluntary Retirement Scheme are charged to the statement of profit and loss immediately.

(m) Income Taxes:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. Deferred income taxes refects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Reporting date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

Wealth Tax is provided in accordance with the provisions of the Wealth Tax Act, 1957.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the same at each reporting date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(n) Earnings Per Share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) 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.

(o) Provisions:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to refect the current best estimates.

(p) Contingent Liability:

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.

(q) Cash and Cash equivalents:

Cash and cash equivalents in the Cash Flow Statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(r) Segment Reporting:

Identifcation of segments:

Segments are identified in line with AS-17 "Segment Reporting", taking into consideration the internal organisation and management structure as well as the differential risk and returns of the segment.

Based on the Company''s business model, Agri Inputs have been considered as the only reportable business segment and hence no separate disclosures provided in respect of its single business segment. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Segment Policies:

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

(s) Borrowing costs:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as a part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Interest and other costs incurred for acquisition and construction of qualifying assets, upto the date of commissioning/installation, are capitalised as part of the cost of the said assets.

(b) The Company has only one class of equity shares having par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2014, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 12.50 (Previous Year: Rs. 3).

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. The distribution will be in proportion to the number of equity shares held by the shareholders.

(a) Indian Rupee term loan from bank carries interest @ 10.41% p.a. The loan is repayable initially in 8 quarterly instalments of Rs. 1,65 lacs and subsequently in 8 quarterly instalments of Rs. 85 lacs each from 30.06.2011. The loan is secured by frst exclusive charge on Windmill at Vandhiya (Kutch) and Plant and Machinery and Equipments situated at Gajod and Silvassa units of the Company.

(b) Foreign currency term loan carries interest @ LIBOR 150 bps (8.15% p.a. on a fully hedged basis). The loan is repayable in 8 half yearly instalments of Rs. 2,86.56 lacs each from 07.03.2013. The Loan is secured by mortgage of a plot of land and Plant and Machinery and Equipments situated at Bhavnagar.

(c) Term loan under vehicle finance scheme was taken during the financial year 2008-09 and carries interest rate ranging from 11.72% to 11.74% p.a. The loan is repayable in 59 monthly instalments of Rs. 2.87 lacs each along with interest, from the date of loan and secured by hypothecation of the vehicles acquired by utilising the said loan.

Note:

The secured borrowings from banks are secured by way of hypothecation of all tangible movable assets, both present and future, including stock of raw materials, fnished goods, work-in- process, stores and trade receivables.

# Excise duty on sales amounting to Rs. 76,26.86 lacs (Previous Year: Rs. 51,06.48 lacs) has been reduced from sales in the statement of profit and loss and Excise Duty paid/on (increase)/decrease in inventories in note 27 includes Rs. 5,87.71 lacs (Previous Year: Rs. 1,78.94 lacs) being excise duty on increase/decrease in stocks.


Mar 31, 2013

(a) Use of estimates:

The preparation of fnancial statements in conformity with generally accepted accounting principles requires management to make judgements, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and disclosure of contingent liabilities at the date of the fnancial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

(b) Tangible Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and directly attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fxed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(c) Depreciation:

(i) In respect of Buildings, Plant and Machinery and Electrical Installations, on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956, at the straight line rates specifed in Schedule XIV to the Companies Act, 1956, except for certain items of Plant and Machinery, rate of 10% on straight line basis has been applied in place of 5.28% specifed in Schedule XIV.

(ii) Leasehold Improvements are depreciated on straight line basis over the lease period upto 60 months.

(iii) In respect of additions to/deletions from the Fixed Assets, on pro-rata basis with reference to the date of addition/deletion of the assets except for assets costing Rs. 5,000 or less which have been fully depreciated.

(iv) In respect of all other Fixed Assets, on written down value basis in accordance with Section 205(2)(a) of the Companies Act, 1956, at the rates specifed in Schedule XIV to the Companies Act, 1956.

(d) Impairment of tangible and intangible assets:

(i) The carrying amounts of assets are reviewed for impairment at each reporting date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash fows are discounted to their present value using a pre-tax discount rate that refects current market assessments of the time value of money and risks specifc to the asset.

(ii) After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(iii) A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(e) Intangible Assets and Amortisation:

(i) Intangible assets are stated at cost less accumulated amortisation.

(ii) Amortisation:

Data Registration expenses (including registration fees) are amortised on a straight line basis over a period of three years and computer software/licence fees and data compensation charges are amortised on a straight line basis over a period of four years.

(iii) Research and Development Costs:

Research costs (other than cost of Fixed Assets acquired) are charged as an expense in the year in which they are incurred and are refected under the appropriate heads of accounts. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

(f) Leased Assets:

Leases where the lessor effectively retains substantially all the risks and benefts of ownership of the leased term, are classifed as operating leases. Operating lease payments are recognised as an expense in the statement of proft and loss on a straight-line basis over the lease term. Lease income is recognised in the statement of proft and loss on an accrual basis.

(g) Government Grants and Subsidies:

When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

(h) Investments:

Presentation and Disclosure

Investments, which are readily realisable and intended to be held for not more than one year from reporting date are classifed as current investments. All other investments are classifed as long term investments.

Recognition and Measurement

Investments that are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are recognised as current investments. All other investments are recognised as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost of acquisition. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the investments.

(i) Inventories:

Raw materials, containers, stores and spares Lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the fnished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a moving weighted average basis.

Finished goods and Work-in-progress Lower of cost and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of fnished goods includes excise duty. Cost is determined on standard costing basis which approximates the actual cost.

Traded Goods Lower of cost and net realisable value. Cost is determined on a moving weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.

(j) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefts will fow to the Company and the revenue can be reliably measured.

Sale of Goods:

Revenue is recognised when the signifcant risks and rewards of ownership of the goods have passed to the buyer. Gross turnover includes Excise Duty but does not include Sales Tax and VAT.

Export benefts:

Duty free imports of raw materials under Advance License for Imports as per the Export and Import Policy are matched with the exports made against the said licenses and the net beneft/obligation is accounted by making suitable adjustments in raw material consumption.

The beneft accrued under the Duty Drawback scheme and other schemes as per the Export and Import Policy in respect of exports made under the said Schemes is included under the head "revenue from operations" as ‘Incentives on Exports’.

Income from Services:

Revenue from service contracts are recognised pro-rata over the period of the contract as and when services are rendered and are net of service tax.

Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Interest income is included under the head "Other Income" in the statement of proft and loss.

Dividends:

Revenue is recognised when the shareholders’ right to receive payment is established by the Reporting date.

Royalties:

Revenue is recognised on an accrual basis in accordance with the terms of relevant agreement.

Other Income:

Certain items of income such as minor insurance claims, overdue interest from customers and other benefts are considered to the extent the amount is ascertainable/accepted by the parties.

(k) Foreign currency translations:

(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:

Foreign currency monetary items are reported using the closing exchange rate on the Reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences:

Exchange differences arising on the settlement of monetary items or on reporting monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous fnancial statements, are recognised as income or as expenses in the year in which they arise.

(iv) Forward Exchange Contracts:

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of proft and loss in the year in which the exchange rates change. Any proft or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

(v) Accounting for Derivatives:

The Company uses derivative fnancial instruments such as currency swap and interest rate swaps to hedge its risks associated with foreign currency fuctuations and interest rate fuctuations. As per ICAI announcement regarding accounting for derivative contracts, other than covered under AS 11, these are marked to market on the portfolio basis and net loss after considering the offsetting effect on the underlying hedged item is charged to the statement of proft and loss. Net gains are ignored.

(l) Retirement and other employee benefts:

(i) Retirement benefts in the form of Provident Fund is a defned contribution scheme established under a State plan and the contributions are charged to the statement of proft and loss for the year when the contribution to the fund accrues.

(ii) Retirement benefts in the form of Superannuation Fund is a defned contribution scheme and the contribution is charged to the statement of proft and loss for the year when the contribution accrues. There are no obligations other than the contribution payable to the Superannuation Fund Trust. The scheme is funded with Insurance Company in the form of a qualifying insurance policy.

(iii) Gratuity liability is a defned beneft obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each fnancial year. The scheme is funded with an Insurance company in the form of a qualifying insurance policy.

(iv) Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee beneft. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee beneft for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end.

(v) Actuarial gains/losses are recognised immediately to the statement of proft and loss and are not deferred for gratuity and leave benefts.

(vi) Payments made under the Voluntary Retirement Scheme are charged to the statement of proft and loss immediately.

(m) Income Taxes:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. Deferred income taxes refects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Reporting date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profts.

The carrying amount of deferred tax assets are reviewed at each Reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available.

Wealth Tax is provided in accordance with the provisions of the Wealth Tax Act, 1957.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specifed period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of proft and loss and shown as MAT Credit Entitlement. The Company reviews the same at each reporting date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specifed period.

(n) Earnings Per Share:

Basic earnings per share are calculated by dividing the net proft or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net proft 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.

(o) Provisions:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to refect the current best estimates.

(p) Contingent Liability:

A contingent liability is a possible obligation that arises from past events whose existence will be confrmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outfow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the fnancial statements.

(q) Cash and Cash equivalents:

Cash and cash equivalents in the Cash Flow Statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(r) Segment Reporting:

Identifcation of segments:

Segments are identifed in line with AS-17 "segment Reporting", taking into consideration the internal organisation and management structure as well as the differential risk and returns of the segment.

Based on the Company’s business model, Agro Inputs have been considered as the only reportable business segment and hence no separate disclosures provided in respect of its single business segment. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Segment Policies:

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the fnancial statements of the Company as a whole.

(s) Borrowing costs:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are expensed in the period they occur. Interest and other costs incurred for acquisition and construction of qualifying assets, upto the date of commissioning/installation, are capitalised as part of the cost of the said assets.


Mar 31, 2011

(a) Basis of Preparation:

The financial statements have been prepared to comply in all material respects with the Notifed Accounting Standards by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(b) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

(c) Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(d) Depreciation:

(i) In respect of Buildings, Plant and Machinery and Electrical Installations, on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956, at the straight line rates specifed in Schedule XIV to the Companies Act, 1956, except for certain items of Plant and Machinery, rate of 10% on straight line basis has been applied in place of 5.28% specifed in Schedule XIV.

(ii) Leasehold Improvements are depreciated on straight line basis over the lease period.

(iii) In respect of additions to/deletions from the Fixed Assets, on pro-rata basis with reference to the date of addition/deletion of the assets except for assets costing ` 5,000 or less which have been fully depreciated.

(iv) In respect of all other Fixed Assets, on written down value basis in accordance with Section 205(2)(a) of the Companies Act, 1956, at the rates specifed in Schedule XIV to the Companies Act, 1956.

(e) Impairment:

(i) The carrying amounts of assets are reviewed for impairment at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash fows are discounted to their present value using a pre-tax discount rate that refects current market assessments of the time value of money and risks specifc to the asset.

(ii) Afiter impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(iii) A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value afiter reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(f) Intangible Assets and Amortisation:

(i) Intangible assets are stated at cost less accumulated amortisation.

(ii) Amortisation:

Data Registration expenses (including registration fees) are amortised on a straight line basis over a period of three years and computer sofitware/licence fees and data compensation charges are amortised on a straight line basis over a period of four years.

(iii) Research and Development Costs:

Research costs (other than cost of Fixed Assets acquired) are charged as an expense in the year in which they are incurred and are refected under the appropriate heads of accounts. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

(g) Leased Assets:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classifed as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term. Lease income is recognised in the Profit and Loss Account on an accrual basis. (h) Government Grants and Subsidies:

When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

(i) Investments:

Investments that are readily realisable and intended to be held for not more than a year are classifed as current investments. All other investments are classifed as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis.

NOTES TO ACCOUNTS

Long-term investments are carried at cost of acquisition. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the investments.

(j) Accounting for Derivatives:

Derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss afiter considering the offsetting effect on the underlying hedge item is charged to the income statement. Net gains are ignored.

(l) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will fow to the Company and the revenue can be reliably measured.

Sale of Goods:

Revenue is recognised when the signifcant risks and rewards of ownership of the goods have passed to the buyer. Gross turnover includes Excise Duty but does not include Sales Tax and VAT.

Income from Services:

Revenue from service contracts are recognised pro-rata over the period of the contract as and when services are rendered and are net of service tax.

Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends:

Revenue is recognised when the shareholders right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognised even if same are declared afiter the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of schedule VI of the Companies Act, 1956.

Royalties:

Revenue is recognised on an accrual basis in accordance with the terms of relevant agreement.

Other Income:

Certain items of income such as insurance claims, overdue interest from customers and other benefits are considered to the extent the amount is

ascertainable/accepted by the parties.

(m) Foreign currency translations:

(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:

Foreign currency monetary items are reported using the closing exchange rate on the Balance Sheet date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences:

Exchange differences arising on the settlement of monetary items or on reporting monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise except those arising from investments in non-integral operations.

(iv) Forward Exchange Contracts:

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

(n) Retirement and other employee benefits:

(i) Retirement benefits in the form of Provident Fund is a defned contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contribution to the fund accrues. There are no obligations other than the contribution payable to the Provident Fund Trust.

(ii) Retirement benefits in the form of Superannuation Fund is a defned contribution scheme and the contribution is charged to the Profit and Loss account of the year when the contribution accrues. There are no obligations other than the contribution payable to the Superannuation Fund Trust. The scheme is funded with Insurance Company in the form of a qualifying insurance policy.

(iii) Gratuity liability is a defned benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The scheme is funded with Insurance companies in the form of qualifying insurance policies.

(iv) Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method.

(v) Actuarial gains/losses are recognised immediately to the profit and loss account and are not deferred.

(vi) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account immediately.

(o) Tax Expense:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. Deferred income taxes refects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that suffcient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that suffcient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that suffcient future taxable income will be available.

(p) Earnings Per Share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (afiter deducting preference dividends and attributable taxes) 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.

(q) Provisions and contingent liabilities:

A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outfow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to refect the current best estimates. Contingent liabilities are disclosed when the Company has a possible obligation and it is not probable that an outfow of resources embodying economic benefits will be required to settle the obligation.

(r) Cash and Cash equivalents:

Cash and cash equivalents in the Cash fow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(s) Segment Reporting:

Identifcation of segments:

The Companys operating businesses are organised and managed separately according to the nature of products and services with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Segment Policies:

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial

statements of the Company as a whole.

t) Export Benefits:

Duty free imports of raw materials under Advance License for Imports as per the Export and Import Policy are matched with the exports made against the said licenses and the net benefit/obligation is accounted by making suitable adjustments in raw material consumption. The benefit accrued under the Duty Entitlement Pass Book Scheme as per the Export and Import Policy in respect of exports made under the said Scheme is included under the head "Other Income from Operations" as Incentives on Exports.


Mar 31, 2010

(a) Basis of Preparation:

The financial statements have been prepared to comply in all material respects with the Notified Accounting Standards by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

(b) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

(c) Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

(d) Depreciation:

(i) In respect of Buildings, Plant and Machinery and Electrical Installations, on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956, at the straight line rates specified in Schedule XIV to the Companies Act, 1956.

(ii) Leasehold Improvements are depreciated on straight line basis over the lease period.

(iii) In respect of additions to/deletions from the Fixed Assets, on pro-rata basis with reference to the date of addition/deletion of the assets except for assets costing Rs 5,000 or less which have been fully depreciated.

(iv) In respect of all other Fixed Assets, on written down value basis in accordance with Section 205(2)(a) of the Companies Act, 1956, at the rates specified in Schedule XIV to the Companies Act, 1956.

(e) Impairment:

(i) The carrying amounts of assets are reviewed for impairment at each balance sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

(ii) After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

(iii) A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

(f) Intangible Assets and Amortisation:

(i) Intangible assets are stated at cost less accumulated amortisation.

(ii) Amortisation:

Data Registration expenses (including registration fees) are amortised on a straight line basis over a period of three years and computer software/licence fees and data compensation charges are amortised on a straight line basis over a period of four years.

(iii) Research and Development Costs:

Research costs (other than cost of Fixed Assets acquired) are charged as an expense in the year in which they are incurred and are reflected under the appropriate heads of accounts. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

(g) Leased Assets:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss account on a straight line basis over the lease term.

(h) Government Grants and Subsidies:

When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

(i) Investments:

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis.

Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the investments.

(j) Accounting (or Derivatives:

Derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis, and the net loss after considering the offsetting effect on the underlying hedge item is charged to the income statement. Net gains are ignored.

(k) Inventories:

Raw materials, containers, stores and spares

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 is determined on a moving weighted average basis.

Finished goods and Work-in-progress

Lower of cost and net realizable value. Cost includes direct materials, labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on standard costing basis.

Traded Goods

Lower of cost and net realizable value. Cost is determined on a moving weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.

(l) Revenue recognition:

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Sale of Goods:

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Gross turnover includes Excise Duty but does not include Sales Tax and VAT.

Interest:

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends:

Revenue is recognised when the shareholders right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognised even it same are declared after the balance sheet date but pertains to period on or before the date of balance sheet as per the requirement of schedule VI of the Companies Act, 1956.

Royalty:

Revenue is recognised on an accrual basis in accordance with the terms of relevant agreement.

Other Income:

Certain items of income such as insurance claims, overdue interest from customers and other benefits are considered to the extent the amount is ascertainahle/accepted by the parties.

(m) Foreign currency translations: 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:

Foreign currency monetary items are reported using the closing exchange rate on the Balance Sheet date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

(iii) Exchange Differences:

Exchange differences arising on the settlement of monetary items or on reporting monetary items of company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which (hey arise except those arising from investments in non-integral operations.

(iv) Forward Exchange Contracts:

The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year.

(n) Retirement and other employee benefits:

(i) Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contribution to the fund accrues. There are no obligations other than the contribution payable to the Provident Fund Trust.

(ii) Retirement benefits in the form of Superannuation Fund is a defined contribution scheme and the contribution is charged to the Profit and Loss account of the year when the contribution accrues. There are no obligations other than the contribution payable to the Superannuation Fund Trust.

(iii) Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

(iv) Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method.

(v) Actuarial gains/losses are recognised immediately to the profit and loss account and are not deferred.

(vi) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account immediately.

(o) Tax Expense:

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised.

(p) Earning Per Share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) 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.

(q) Provisions:

A provision is recognised when an enterprise has a present obligation as a result of past event: it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

(r) Cash and Cash equivalents:

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

(s) Segment Reporting:

Identification of segments:

The Companys operating businesses are organised and managed separately according to the nature of products and services with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Segment Policies:

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.



 
Subscribe now to get personal finance updates in your inbox!