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Accounting Policies of Hindustan Flurocarbons Ltd. Company

Mar 31, 2015

BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared under the historical cost convention on accrual basis to comply in all material aspects and in accordance with generally accepted accounting principles in India and the relevant provisions of the Companies Act, 2013. The accounting policies have been consistently applied by the Company unless otherwise stated.

(A) USE OF ESTIMATES:

The preparation of financial statements requires estimates and assumptions to be made that affect the reporting amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

(B) RECOGNITION OF REVENUE AND EXPENDITURE :

(i) Revenues/Incomes and Costs/ Expenditures are generally accounted on accrual, as they are earned or incurred.

(ii) Sales are recognized when significant risks and rewards of ownership have been transferred to the buyer. In case of development projects / Research income is recognized on achieving the set milestones or targets.

(iii) Carbon credit revenue is recognized on achieving the set milestones or targets as prescribed by an agency and where reasonable assessment of certainty of future economic benefits.

(iv) Export incentives under various schemes are recognized as Income on certainty of realization.

(v) Sale of realizable scrap is accounted on receipt basis.

(vi) Insurance claims are accounted on accrual basis on admission of claims.

(vii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

(C) FIXED ASSETS:

(i) Fixed Assets (including capital work-in- progress) are accounted at cost less accumulated depreciation net of modvat credit.

(ii) Constructed and fabricated capital assets are capitalized as and when the plant is put into commercial production.

(iii) Expenditure during construction period including interest on loans borrowed is included in the Capital cost.

(iv) Significant items of separate identity capable of enhancing life and capacity of the machinery are capitalized at cost inclusive of installation cost.

(D) DEPRECIATION

(i) The depreciable amount of an asset is the cost of an asset or other amount substituted for cost less residual value. Depreciation is provided in accordance with Schedule II of the Companies Act, 2013, as amended treating plant and machinery as continuous process plant.

(ii) Depreciation on assets costing less than Rs.5000/- is provided at 100%.

(E) VOLUNTARY RETIREMENT SCHEME (VRS)

(i) The Company has introduced Voluntary Retirement Scheme in accordance with BIFR Modified Draft Rehabilitation Scheme. The Company followed the policy guidelines issued by BIFR by amortizing the VRS payment over a period of 3 years.

(F) REFURBISHMENT EXPENDITURE

The company has followed the policy of amortizing refurbishment expenditure met on Plant and Machinery over a period of five years from the year of expenditure in accordance with the BIFR Modified Draft Rehabilitation Scheme.

(G) INVENTORIES:

(i) The closing stock of raw materials, packing material, stores and spares are valued at cost by adopting weighted average method or net realizable value whichever is less. Stock-in process (intermediate products) and finished goods are valued at cost or net realizable value whichever is lower.

Cost of Stock-in-process includes costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

(ii) Excise duty payable on finished goods manufactured but not removed is included in the Valuation of such stocks.

(iii) By-products are valued at NIL value.

(H) EMPLOYEE BENEFITS:

a. Short Term Employee Benefits:

Undiscounted value of short term employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia and performance incentives are recognized as expense in the period in which the employees render the related service.

b. Post Employment Benefits

Defined Contribution plans:

Contribution to defined contribution plans being Employee Provident Fund, Employee State Insurance, Employee Insurance Scheme etc. are recognized in the Statement of profit and loss during the period in which the employees render the related services.

Defined Benefit Plans:

Liabilities in respect of defined benefit plans being Gratuity and Leave encashment are determined based on an actuarial valuation using the projected unit credit method. Actuarial gains or losses are recognized immediately in the Statement of Profit and Loss account.

(I) PROVISION FOR DOUBTFUL DEBTS:

Provision for doubtful debts/loans/advances:

Provision for doubtful debts is made in the books in respect of debtors outstanding for more than 3 years except Govt. Debts. In respect of cases under Civil suits/tribunals for recovery of dues which are yet to be decided, provisions are made to the extent considered necessary by the Management.

(J) FOREIGN CURRENCY TRANSACTIONS:

(i) Foreign currency transactions are accounted for at the exchange rates prevailing on the date of transaction.

(ii) Fixed assets are translated at the exchange rates on the date of transaction. The exchange difference in each financial year, up to the period of settlement is taken to Statement of profit and loss.

(iii) The monetary items in foreign currencies are translated at the closing exchange rate on the date of balance sheet and difference in translation and realized gains/losses thereon adjusted in the Statement of profit and loss.

(K) BORROWING COST:

Borrowing costs relating to acquisition of fixed assets which takes substantial period of the time to get ready for its intended use are included to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are charged to revenue. Borrowing costs consist of interest and other costs that the company incurs in connection with borrowing of funds on acquisition of fixed assets are capitalized as part of the cost of asset.

(L) TAXES ON INCOME:

(i) The Current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company on the estimated total income for the year.

(ii) Deferred tax assets and liabilities are recognized on timing differences between taxable income and accounting income, originating in one period and expected to reverse in subsequent periods. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

(iii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted as on the Balance Sheet date.

(M) SEGMENT REPORTING:

The company's operation mainly comprises manufacturing of PTFE (Suspension & Emulsion). These activities constitutes the primary segment i.e. manufacturing in chemicals.

(N) EARNING PER SHARE:

Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(O) IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such an indication exists, then the carrying value is reduced to the higher of the net selling price or the value in use. The value in use is the present value of estimated future net income expected from use of the asset.

(P) PROVISIONS / CONTINGENT LIABILITIES:

Provisions are recognized, when the Company has a present legal or constructive obligation, as a result of past events, for which it is probable that an out flow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation. The disclosure is made for all present or possible obligations that may but probably will not require outflow as contingent liability in the financial statements.


Mar 31, 2014

1(A) USE OF ESTIMATES:

The preparation of financial statements requires estimates and assumptions to be made that affect the reporting amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized. 1(B) RECOGNITION OF REVENUE AND EXPENDITURE :

(i) Revenues/Incomes and Costs/ Expenditures are generally accounted on accrual, as they are earned or incurred.

(ii) Sales are recognized when significant risks and rewards of ownership have been transferred to the buyer. In case of development projects / Research income is recognized on achieving the set milestones or targets.

(iii) Carbon credit revenue is recognized on achieving the set milestones or targets as prescribed by an agency and where reasonable assessment of certainty of future economic benefits.

(iv) Export incentives under various schemes are recognized as Income on certainty of realization.

(v) Sale of realizable scrap is accounted on receipt basis.

(vi) Insurance claims are accounted on accrual basis on admission of claims.

(vii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

1(C) FIXED ASSETS:

(i) Fixed Assets (including capital work-in- progress) are accounted at cost less accumulated depreciation net of modvat credit.

(ii) Constructed and fabricated capital assets are capitalised as and when the plant is put into commercial production.

(iii) Expenditure during construction period including interest on loans borrowed is included in the Capital cost.

(iv) Significant items of separate identity capable of enhancing life and capacity of the machinery are capitalised at cost inclusive of installation cost.

1(D) DEPRECIATION

(i) Depreciation is provided on Straight-Line Method in accordance with Schedule XIV of the Companies Act, 1956, as amended treating plant and machinery as continuous process plant.

(ii) Depreciation on assets costing less than Rs.5000/- is provided at 100%.

1(E) VOLUNTARY RETIREMENT SCHEME (VRS)

(i) The Company has introduced Voluntary Retirement Scheme in accordance with BIFR Modified Draft Rehabilitation Scheme. The Company followed the policy guidelines issued by BIFR by amortizing the VRS payment over a period of 3 years.

1 (F) REFURBISHMENT EXPENDITURE

The company has followed the policy of amortizing refurbishment expenditure met on Plant and Machinery over a period of five years from the year of expenditure in accordance with the BIFR Modified Draft Rehabilitation Scheme.

1(G) INVENTORIES:

(i) The closing stock of raw materials, packing material, stores and spares are valued at cost by adopting weighted average method or net realizable value whichever is less. Stock-in process (intermediate products) and finished goods including CERs are valued at cost or net realizable value whichever is lower. Cost of Stock-in-process includes costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

(ii) Excise duty payable on finished goods manufactured but not removed is included in the Valuation of such stocks.

(iii) By-products are valued at NIL value.

1 (H) EMPLOYEE BENEFITS:

a. Short Term Employee Benefits: Undiscounted value of short term employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia and performance incentives are recognized as expense in the period in which the employees render the related service

b. Post Employment Benefits Defined Contribution plans:

Contribution to defined contribution plans being Employee Provident Fund, Employee State Insurance, Employee Insurance Scheme etc. are recognized in the Statement of profit and loss during the period in which the employees render the related services.

Defined Benefit Plans:

Liabilities in respect of defined benefit plans being Gratuity and Leave encashment are determined based on an actuarial valuation using the projected unit credit method. Actuarial gains or losses are recognized immediately in the Statement of Profit and Loss account.

1(I) PROVISION FOR DOUBTFUL DEBTS: Provision for doubtful debts/loans/advances:

Provision for doubtful debts is made in the books in respect of debtors outstanding for more than 3 years except Govt. Debts. In respect of cases under Civil suits/tribunals for recovery of dues which are yet to be decided, provisions are made to the extent considered necessary by the Management. 1(J) FOREIGN CURRENCY TRANSACTIONS:

(i) Foreign currency transactions are accounted for at the exchange rates prevailing on the date of transaction.

(ii) Fixed assets are translated at the exchange rates on the date of transaction. The exchange difference in each financial year, up to the period of settlement is taken to Statement of profit and loss.

(iii) The monetary items in foreign currencies are translated at the closing exchange rate on the date of balance sheet and difference in translation and realized gains/losses thereon adjusted in the Statement of profit and loss.

1(K) BORROWING COST:

Borrowing costs relating to acquisition of fixed assets which takes substantial period of the time to get ready for its intended use are included to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are charged to revenue. Borrowing costs consist of interest and other costs that the company incurs in connection with borrowing of funds on acquisition of fixed assets are capitalised as part of the cost of asset.

1(L) TAXES ON INCOME:

(i) The Current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company on the estimated total income for the year.

(ii) Deferred tax assets and liabilities are recognized on timing differences between taxable income and accounting income, originating in one period and expected to reverse in subsequent periods. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

(iii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted as on the Balance Sheet date.

1(M) SEGMENT REPORTING:

The company''s operation mainly comprises manufacturing of PTFE (Suspension & Emulsion). These activities constitutes the primary segment i.e. manufacturing in chemicals.

1(N) EARNING PER SHARE:

Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1(O) IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such an indication exists, then the carrying value is reduced to the higher of the net selling price or the value in use. The value in use is the present value of estimated future net income expected from use of the asset.

1 (P) PROVISIONS / CONTINGENT LIABILITIES: Provisions are recognized, when the Company has a present legal or constructive obligation, as a result of past events, for which it is probable that an out flow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation. The disclosure is made for all present or possible obligations that may but probably will not require outflow as contingent liability in the financial statements.


Mar 31, 2013

1(A) USE OF ESTIMATES:

The preparation of financial statements requires estimates and assumptions to be made that affect the reporting amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

1(B) RECOGNITION OF REVENUE AND EXPENDITURE :

(i) Revenues/Incomes and Costs/Expenditures are generally accounted on accrual, as they are earned or incurred.

(ii) Sales are recognized when significant risks and rewards of ownership have been transferred to the buyer. In case of development projects / Research income is recognized on achieving the set milestones or targets.

(iii) Carbon credit revenue is recognized on achieving the set milestones or targets as prescribed by an agency and where reasonable assessment of certainty of future economic benefits.

(iv) Export incentives under various schemes are recognized as Income on certainty of realization.

(v) Sale of realizable scrap is accounted on receipt basis.

(vi) Insurance claims are accounted on accrual basis on admission of claims.

(vii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

1(C) FIXED ASSETS:

(i) Fixed Assets (including capital work-in- progress) are accounted at cost less accumulated depreciation net of modvat credit.

(ii) Constructed and fabricated capital assets are capitalised as and when the plant is put into commercial production.

(iii) Expenditure during construction period including interest on loans borrowed is included in the Capital cost.

(iv) Significant items of separate identity capable of enhancing life and capacity of the machinery are capitalised at cost inclusive of installation cost.

1(D) DEPRECIATION

(i) Depreciation is provided on Straight-Line Method in accordance with Schedule XIV of the Companies Act, 1956, as amended treating plant and machinery as continuous process plant.

(ii) Depreciation on assets costing less than Rs.5000/- is provided at 100%.

1(E) VOLUNTARY RETIREMENT SCHEME (VRS)

(i) The Company has introduced Voluntary Retirement Scheme in accordance with BIFR Modified Draft Rehabilitation Scheme. The Company followed the policy guidelines issued by BIFR by amortizing the VRS payment over a period of 3 years.

1(F) REFURBISHMENT EXPENDITURE

The company has followed the policy of amortizing refurbishment expenditure met on Plant and Machinery over a period of five years from the year of expenditure in accordance with the BIFR Modified Draft Rehabilitation Scheme.

1(G) INVENTORIES:

(i) The closing stock of raw materials, packing material stores and spares are valued at cost by adopting weighted average method or net realizable value whichever is less. Stock-in process (intermediate products) and finished goods including CERs are valued at cost or net realizable value whichever is lower.

Cost of Stock-in-process includes costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

(ii) Excise duty payable on finished goods manufactured but not removed is included in the Valuation of such stocks.

(iii) By-products are valued at NIL value.

1(H) EMPLOYEE BENEFITS:

a. Short term employee benefits:

Undiscounted value of short term employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia and performance incentives are recognized as expense in the period in which the employees render the related service

b. Post Employment Benefits

Defined Contribution plans: Contribution to defined contribution plans being Employee Provident Fund, Employee State Insurance, Employee Insurance Scheme etc. are recognized in the Statement of profit and loss during the period in which the employees render the related services.

Defined Benefit Plans: Liabilities in respect of defined benefit plans being Gratuity and Leave encashment are determined based on an actuarial valuation using the projected unit credit method. Actuarial gains or losses are recognized immediately in the Statement of Profit and Loss account.

1(I) PROVISION FOR DOUBTFUL DEBTS:

Provision for doubtful debts/loans/advances:

Provision for the doubtful debts is made in the books in respect of debtors outstanding for more than 3 years except Govt. Debts. In respect of cases under Civil suits/tribunals for recovery of dues which are yet to be decided, provisions are made to the extent considered necessary by the Management.

1(J) FOREIGN CURRENCY TRANSACTIONS:

(i) Foreign currency transactions are accounted for at the exchange rates prevailing on the date of transaction.

(ii) Fixed assets are translated at the exchange rates on the date of transaction. The exchange difference in each financial year, up to the period of settlement is taken to Statement of profit and loss.

(iii) The monetary items in foreign currencies are translated at the closing exchange rate on the date of balance sheet and difference in translation and realized gains/losses thereon adjusted in the Statement of profit and loss.

1(K) BORROWING COST:

Borrowing costs relating to acquisition of fixed assets which takes substantial period of the time to get ready for its intended use are included to the extent they relate to the period till such assets are ready to be put to use, All other borrowing costs are charged to revenue. Borrowing costs consists of interest and other costs that the company incurs in connection with borrowing of funds on acquisition of fixed assets are capitalised as part of the cost of asset.

1(L) TAXES ON INCOME:

(i) The Current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the company on the estimated total income for the year.

(ii) Deferred tax assets and liabilities are recognized on timing differences between taxable income and accounting income, originating in one period and expected to reverse in subsequent periods. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

(iii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted as on the Balance Sheet date.

1(M) SEGMENT REPORTING:

The company''s operation mainly comprises manufacturing of PTFE (Suspension & Emulsion). These activities constitutes the primary segment i.e. manufacturing in chemicals.

1(N)EARNING PER SHARE:

Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1(O) IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such an indication exists, then the carrying value is reduced to the higher of the net selling price or the value in use. The value in use is the present value of estimated future net income expected from use of the asset.

1(P) PROVISIONS / CONTINGENT LIABILITIES:

Provisions are recognized, when the company has a present legal or constructive obligation, as a result of past events, for which it is probable that an out flow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation. The disclosure is made for all present or possible obligations that may but probably will not require outflow as contingent liability in the financial statements.


Mar 31, 2012

1(A). USE OF ESTIMATES:

The preparation of financial statements requires estimates and assumptions to be made that affect the reporting amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recongnised in the period in which the results are known/ materialised.

1(B). RECOGNITION OF REVENUE AND EXPENDITURE:

(i) Revenues/Incomes and Costs/Expenditures are generally accounted on accrual, as they are earned or incurred.

(ii) Sales are recognized when significant risks and rewards of ownership have been transferred to the buyer. In case of development projects/Research income, revenue is recognized on achieving the set milestones or targets.

(iii) Export incentives under various schemes are recognized as Income on certainty of realization

(iv) Sale of realizable scrap is accounted on receipt basis.

(v) Insurance claims are accounted on accrual basis on admission of claims.

(vi) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.

(vii) Revenue (income) is recognised when no significant uncertainties as to its determinations or realisations exists. Turnover includes carbon credits (Carbon Emission Reductions) which are recognised as delivery thereof or sale of right therein as the case may be, in terms of contracts with respective buyers.

1(C). FIXED ASSETS:

(i) Fixed assets (including capital work-in-progress) are accounted at cost less accumulated depreciation net of modvat credit.

(ii) Constructed and fabricated capital assets are capitalized as and when the plant is put into commercial production.

(iii) Expenditure during construction period including interest on loans borrowed is included in the Capital cost.

(iv) Significant items of separate identity capable of enhancing life and capacity of the machinery are capitalized at cost inclusive of installation cost.

1(D). DEPRECIATION

(i) Depreciation is provided on Straight-Line Method in accordance with Schedule XIV of the Companies Act, 1956, as amended, treating plant and machinery as continuous process plant.

(ii) Depreciation on assets costing less than Rs.5000/- is provided at 100%.

1(E). VOLUNTARY RETIREMENT SCHEME (VRS)

(i) The Company has introduced Voluntary Retirement Scheme in accordance with BIFR Modified Draft Rehabilitation Scheme. The Company followed the policy guidelines issued by BIFR by amortizing the VRS payment over a period of 3 years.

1(F). REFURBISHMENT EXPENDITURE

The company has followed the policy of amortizing refurbishment expenditure met on Plant and Machinery over a period of five years from the year of expenditure in accordance with the BIFR Modified Draft Rehabilitation Scheme.

1(G). INVENTORIES:

(i) The closing stock of raw materials, packing material stores and spares are valued at cost by adopting weighted average method or net realizable value whichever is less. Stock-in-process (intermediate products) and finished goods are valued at cost or net realizable value whichever is lower.

Cost of Stock-in-process includes costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

(ii) Excise duty payable on finished goods manufactured but not removed is included in the Valuation of such stocks.

(iii) By-products are valued at NIL value.

(iv) Closing stock of CERs are treated as finished goods and are valued at market price as reported in International Stock exchange market, New York at the yearend date (after deducting marginal expenses) upto 31.03.2011.

1(H). EMPLOYEE BENEFITS:

a. Short term employee benefits:

Undiscounted value of short term employee benefits such as salaries, wages, short term compensated absences, bonus, exgratia and performance incentives are recognised as expense in the period in which the employees render the related service.

b. Post Employment Benefits Defined Contribution plans:

Contribution to defined contribution plans being Employee Provident Fund, Employee State Insurance, Employee Insurance Scheme etc. are recognised in the Statement of profit and loss during the period in which the employees render the related services.

Defined Benefit Plans:

Liabilities in respect of defined benefit plans being Gratuity and Leave encashment are determined based on an actuarial valuation using the projected unit credit method. Actuarial gains or losses are recognised immediately in the Statement of Profit and Loss account.

1(I). PROVISION FOR DOUBTFUL DEBTS:

Provision for doubtful debts/loans/advances:

Provision for the doubtful debts is made in the books in respect of debtors outstanding for more than 3 years except Govt. Debts. In respect of cases under Civil suits/tribunals for recovery of dues which are yet to be decided, provisions are made to the extent considered necessary by the Management.

1(J). FOREIGN CURRENCY TRANSACTIONS:

(i) Foreign currency transactions are accounted for at the exchange rates prevailing on the date of transaction.

(ii) Fixed assets are translated at the exchange rates on the date of transaction. The exchange difference in each financial year, up to the period of settlement is taken to Statement of profit and loss.

(iii) The monetary items in foreign currencies are translated at the closing exchange rate on the date of balance sheet and difference in translation and realized gains/losses thereon adjusted in the Statement of profit and loss.

1(K). BORROWING COST:

Borrowing costs relating to acquisition of fixed assets which takes substantial period of the time to get ready for its intended use are included to the extent they relate to the period till such assets are ready to be put to use, Ail other borrowing costs are charged to revenue. Borrowing costs consist of interest and other costs that the company incurs in connection with borrowing of funds.

1(L).TAXES ON INCOME:

(i) The Current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company on the estimated total income for the year.

(ii) Deferred tax assets and liabilities are recognised on timing differences between taxable income and accounting income, originating in one period and expected to reverse in subsequent periods.

Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

(iii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted as on the Balance Sheet date.

1(M). SEGMENT REPORTING:

The company's operation mainly comprises manufacturing of PTFE (Suspension & Emulsion). These activities constitutes the primary segment i.e. manufacturing in chemicals.

1(N). EARNING PER SHARE:

Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1(O). IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such an indication exists, then the carrying value is reduced to the higher of the net selling price or the value in use. The value in use is the present value of estimated future net income expected from use of the asset.

1(P). PROVISIONS/CONTINGENT LIABILITIES:

Provisions are recognised, when the Company has a present legal or constructive obligation, as a result of past events, for which it is probable that an out flow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation. The disclosure is made for all present or possible obligations that may but probably will not require outflow as contingent liability in the financial statements.


Mar 31, 2011

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Accounts have been prepared on accrual basis unless stated otherwise under historical cost convention and in accordance with the accounting standards issued by ICAI and provisions of Companies Act. The deviations from the above are stated in the notes.

2. FIXED ASSETS:

2.1. Fixed assets (including capital work-in-progress) are accounted at cost, net of modvat credit.

2.2. Machinery spares procured for maintenance of machinery are taken as Stock of spares and are valued as closing stock at cost.

2.3 In respect of Plant and machinery, the routine expenditure for repairs of the plant and machinery are charged to P & L Account. Only significant items of separate identity capable of enhancing Life and capacity of the machinery are capitalized at cost inclusive of installation cost.

2.4. Constructed and fabricated capital assets are capitalized as and when the plant is put into commercial production.

2.5. Expenditure during construction period including interest on loans borrowed is included in the Capital cost.

2.6. Machinery, Spares relating to a particular Machinery are capitalized to fixed assets and those of general in nature are taken to closing stock.

3. DEPRECIATION

3.1. Depreciation is provided on Straight-Line Method in accordance with Schedule XIV of the Companies Act, 1956, as amended, treating plant and machinery as continuous process plant.

3.2. Depreciation on assets costing less than Rs.5000/- is provided at 100%.

4. VOLUNTARY RETIREMENT SCHEME (VRS)

4.1. The Company has introduced Voluntary Retirement Scheme in accordance with BIFR Modified Draft Rehabilitation Scheme. The Company followed the policy guidelines issued by BIFR by amortizing the VRS payment over a period of 3 years.

5. REFURBISHMENT EXPENDITURE

The company has followed the policy of amortizing refurbishment expenditure met on Plant and Machinery over a period of five years from the year of expenditure. This is in accordance with the BIFR Modified Draft Rehabilitation Scheme.

6. REVENUE RECOGNITION

6.1. Sales are recognized when all significant risks and rewards of ownership have been transferred to the buyer. Gross value of sale is recognized and the Excise Duty is later on shown as deduction. In case of development projects / research income, revenue is recognised on achieving the set of milestone or targets.

6.2. Export incentives under various schemes are recognized as Income on certainty of realization.

6.3. Sale of realizable scrap is accounted on receipt basis.

6.4. Insurance claims are accounted on accrual basis on admission of claims.

7. INVENTORIES

7.1 The closing stock of raw materials, stores and spares are valued at cost by adopting weighted average method after giving due credit for VAT or net realizable value which ever is less. Stock- in-process (intermediate products) and finished goods are valued at cost or net realizable value whichever is lower after giving due credit for VAT. However, the CERs confirmed by UNFCCC are valued as finished goods at market price of CERs in the international Stock Exchange of CERs at the year end date after considering some margin.

7.2. Excise duty payable on finished goods manufactured but not removed is included in the Valuation of such stocks.

7.3. By-products are valued at NIL value.

8. RETIREMENT BENEFITS

8.1. In respect of gratuity the company has taken an Insurance Policy with Life Insurance Corporation of India to cover the gratuity that may be payable to employees on retirement. The premium on the policy is being charged to Profit and Loss account.

8.2. Leave encashment, gratuity and other retirement benefits are accounted on accrual basis and provided in books of accounts on the basis of acturial valuation.

8.3. Contributions to Provident Fund are charged to P& L A/c on accrual basis.

8.4. Bonus is provided as per Payment of Bonus Act 1965.

9. FOREIGN CURRENCY TRANSACTIONS:

9.1. Foreign currency transactions are accounted for at the exchange rates prevailing on the date of transaction.

9.2. Fixed assets are translated at the exchange rates on the date of transaction. The exchange difference in each financial year, up to the period of settlement is taken to profit and loss account.

9.3. The monetary items in foreign currencies are translated at the closing exchange rate on the date of balance sheet and gains/losses there on adjusted in the profit and loss account

10. SUNDRY DEBTORS:

10.1.Provision for doubtful debts/loans/advances : Full provision for the doubtful debts is made in the books in respect of debtors outstanding for more than 3 years except Govt. Debts. In respect of cases under Civil suits/tribunals for recovery of dues which are yet to be decided, Provisions are made to the extent considered necessary by the Management.

11. CONTINGENT LIABILITIES

11.1. Claims against the company not acknowledged as debts relating to normal business transactions and show cause notices/demands raised by authorities disputed by the company are treated as Contingent Liabilities and necessary disclosures are made as per AS-4. Wage revision amount due to employees quantified on estimated basis is treated on contingent liability.

12. PRIOR PERIOD/PRE-PAID EXPENSES

12.1 Prior period and prepaid expenses are recognized taking the cut off date as 31st March of the financial year.


Mar 31, 2010

1. GENERAL

1.1 The Accounts have been prepared on historical cost basis.

1.2 All revenues and expenses are accounted on accrual basis except to the extent stated otherwise.

2. FIXED ASSETS:

2.1 Fixed assets (including capital work-in-progress) are accounted at cost, net of modvat credit.

2.2 Expenditure during construction period including interest on loans borrowed is included in the Capital cost.

3. DEPRECIATION

3.1 Depreciation is provided on Straight-Line Method in accordance with Schedule XIV of the Companies Act, 1956, as amended, treating plant and machinery as continuous process plant.

3.2 Depreciation on assets costing less than Rs.5000/- is provided at 100%.

3.3 Expenditure not represented by assets is written off over a period of 5 years.

4. VOLUNTARY RETIREMENT SCHEME

4.1 Last year an amount of Rs.223.57 lacs had incurred towards VRS payments for 31 employees in accordance with BIFRs Modified Draft Rehabilitation Scheme(MDRS). Out of this, an amount Rs.74.52 lacs was charged to P&L Account in the current year. The balance will be written off in the next two years (Rs.74.52 Lacs in 2010-11 and Rs.37.27 Lacs in 2011 -12) in accordance with BIFRs Modified Draft Rehabilitation Scheme (MDRS). As per AS-15 issued by ICAI , VRS expenditure is to be written off over the pay back period, but the deferred VRS Expenditure cannot be carried forward beyond 31.03.2010. The Company is following the guide lines contained in the BIFRs MDRS in this matter deviating from AS issued by ICAI.

5. REFURBISHMENT EXPENDITURE

5.1 This year an amount of Rs. 17.84 lacs was incurred whereas last year an amount of Rs.285.14 lacs has been incurred towards Refurbishment Expenditure on Plant and Machinery. Out of which Rs.61.49 lacs was charged to Profit & Loss account during the Current year. The balance will be written off in 3 equal installments of Rs.61.49 Lacs in the next three years in accordance with BIFRs Modified Draft Rehabilitation Scheme (MDRS). As per AS-6 issued by ICAI, any expenditure incurred for improvement in performance of the Plant & Machinery, should be capitalized and depreciated accordingly as per Schedule -XIV applicable to the Company. However the Company is following the guide lines contained in the BIFRs MDRS in this matter deviating from AS issued by ICAI.

6. REVENUE RECOGNITION.

Sales are recognized when all significant risks and rewards of ownership have been transferred to the buyer.

6.1) Export incentives under various schemes are recognized as Income on certainty of realization.

7. INVENTORIES

7.1) The closing stock of raw materials, stores and spares etc., are valued at cost by adopting weighted average method after giving due credit for VAT. Stock-in-process and finished goods are valued at cost or net realizable value whichever is lower after giving due credit for VAT. HFC- 23 Gas is converted into eligible CERs and are valued at the lowest quoted price during the year in the international market.

7.2) Excise duty payable on finished goods manufactured but not removed is included in the Valuation of such stocks.

7.3) Sales of realizable scrap are accounted on receipt basis.

7.4) Insurance claims are accounted on accrual basis on admission of claims.

8. RETIREMENT BENEFITS

8.1. In respect of gratuity the company has taken an Insurance Policy with Life Insurance Corporation of India to cover the gratuity that may be payable to employees on retirement. The premium on the policy is being charged to Profit and Loss account.

8.2. Leave encashment and other retirement benefits are accounted on accrual basis and charged to P&L Account.

8.3. Contributions to Provident Fund are charged to P& L A/c.

9. FOREIGN CURRENCY TRANSACTIONS:

Foreign currency transactions are accounted for at the exchange rates prevailing on the date of transaction.

9.1 Fixed assets are translated at the exchange rates on the date of transaction. The exchange difference in each financial year, upto the period of settlement is taken to profit and loss account.

9.2 The monetary items in foreign currencies are translated at the closing exchange rate on the date of balance sheet and gains/losses there on adjusted in the profit and loss account.

 
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