Home  »  Company  »  Hind. Organi  »  Quotes  »  Accounting Policy
Union Budget 2017-18
Enter the first few characters of Company and click 'Go'

Accounting Policies of Hindustan Organic Chemicals Ltd. Company

Mar 31, 2015

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared on accrual basis, unless stated otherwise, under the historical cost convention, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 2013.

B. USE OF ESTIMATES

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

C. FIXED ASSETS

a) Fixed Assets are stated at historical cost less depreciation. Costs include all expenses incurred to bring the assets to its present location and condition.

b) The constructed/fabricated capital assets are capitalized as and when the same are installed in the plants.

c) Machinery spares which are procured for use in connection with particular machinery/equipment and stand by equipments which are identified to a particular item of fixed asset and having irregular use are capitalized and written off over the remaining useful life of the machinery/ equipment.

d) In respect of Plant and Machinery, significant expenditure on repairs, renewals and replacement having a separate identity and is capable of being used after the existing assets are disposed off or which are certified by the concerned technical department to have resulted in technical improvement, increased capacity or increased useful life of the assets, is capitalised. The estimated residual value of the replaced parts, determined on technical assessment is charged to Statement of Profit and Loss as loss on scrapping of assets.

e) Items of fixed assets that have been retired from active use and are held for disposal are valued at lower of their net book value or net realisable value.

D. IMPAIRMENT OF ASSETS

The carrying amount of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

E. DEPRECIATION

a) Depreciation is provided during the year at the rates prescribed in Schedule II of the Companies Act, 2013 for all tangible assets.

b) Assets are depreciated upto 95% of their cost and balance 5% is carried in the books as residual value except in case of intangible assets.

c) Intangible Assets consisting of computer software and SAP license cost are amortised over a period of 5 years on straight line basis from the date of acquisition.

d) Assets individually costing less than Rs. 5000 are fully depreciated in the year of acquisition.

e) Lease premium paid on leasehold land is amortised over the life of lease.

F. INVENTORIES

a) Inventories are valued at lower of cost and net realizable value except in case of;

i) Raw materials are valued at cost on weighted average basis.

ii) Stores and spares, which are valued at cost, determined as per weighted average cost method,

iii) By-products which are valued at estimated net realizable value, and

iv) Intermediate products which are exclusively held for captive consumption are valued at cost.

b) For the purpose of valuation of stock-in-process and stock of finished goods pending inspection, the same is converted into equivalent units of finished products held for captive consumption depending upon stage of completion.

c) The cost of Catalyst is amortised over their estimated useful lives. Balance unamortised portion has been shown under the head "Stores and Spares".

d) Provision for non-moving / obsolete stores and spares are made based on technical assessment.

G. SUNDRY DEBTORS

Provision for Doubtful debts/Loans/Advances: Full provision is made in the books, in respect of Sundry Debtors outstanding for more than 3 years except for in respect of receivables from Government departments/Companies.

In respect of other Debtors, Loans & Advances the provisions are made to the extent considered not recoverable by the management.

H. REVENUE RECOGNITION

a) The "Sales" are stated on the basis of invoices net of sales tax and trade discounts.

b) Revenue from sale of Scrap and obsolete stores is accounted for at the time of disposal.

c) Delayed payment charges due from customers other than Government Companies/Departments are accrued as income where Management is certain about its recoverability.

d) Interest income is recognized when no significant uncertainty as to its realization exists.

e) Benefit of Duty Credit are accounted on accrual basis.

I. GOVERNMENT GRANTS

The company is following income approach for accounting for the government grants in-respect of the depreciable assets as described in Accounting Standard 12 - 'Accounting for Government Grants'. The grants related to depreciable assets are treated as deferred income which is recognised in the statement of profit and loss on proportionate basis over the useful life of the assets and allocation to income is made in proportion in which the depreciation on related assets is charged.

J. FOREIGN CURRENCY TRANSACTIONS

Transactions in Foreign currency are recorded in the reporting currency by applying currency rate as at the date of transaction. Receivables and Payables involving foreign currency are translated at the rates of exchange prevalent on the Balance Sheet date. Exchange differences (gains or losses) are treated as Revenue and charged to the statement of profit and loss.

K. BOND ISSUE EXPENSES

Bond Issue Expenses are being charged off against Securities Premium Account as per the provisions of the Companies Act, 2013.

L. RETIREMENT BENEFITS

a) Company's contribution to provident fund is accounted for on accrual basis.

b) Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

c) Post employment and other long term employee benefits are recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and loss in respect of post employment and other long term benefits are charged to the statement of profit and loss.

d) Bonus is provided under the Payment of Bonus Act, 1965, on the basis of profitability of each Unit.

M. INVESTMENTS

a) Long term investments are stated at cost less decline, if any, other than temporary in value on individual investment basis.

b) Investments intended to be held for not more than one year from the date of acquisition are classified as current investments and are carried at lower of cost or fair value determined on individual investment basis.

N. PRIOR PERIOD ADJUSTMENTS

Items of income / expenses above Rs. 10000 in each case relating to previous years, are accounted as prior period adjustments.

O. PREPAID EXPENSES

Prepaid expenses are accounted for only where the amounts relate into unexpired period exceeds Rs. 10000 in each case.

P. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The 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.

Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) 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. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in the financial statements.




Mar 31, 2014

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared on accrual basis, unless stated otherwise, under the historical cost convention, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

B. USE OF ESTIMATES

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

C. FIXED ASSETS

a) Fixed Assets are stated at historical cost less depreciation. Costs include all expenses incurred to bring the assets to its present location and condition.

b) The constructed/fabricated capital assets are capitalized as and when the same are installed in the plants.

c) Machinery spares which are procured for use in connection with particular machinery/equipment and stand by equipments which are identified to a particular item of fixed asset and having irregular use are capitalized and written off over the remaining useful life of the machinery/ equipment.

d) In respect of Plant and Machinery, significant expenditure on repairs, renewals and replacement having a separate identity and is capable of being used after the existing assets are disposed off or which are certified by the concerned technical department to have resulted in technical improvement, increased capacity or increased useful life of the assets, is capitalised. The estimated residual value of the replaced parts, determined on technical assessment is charged to Statement of Profit and Loss as loss on scrapping of assets.

e) Items of fixed assets that have been retired from active use and are held for disposal are valued at lower of their net book value or net realisable value.

D. IMPAIRMENT OF ASSETS

The carrying amount of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

E. DEPRECIATION

The classification of plant and machinery into continuous and non-continuous process is done as per technical certificate and depreciation thereon is provided accordingly.

a) In case of continuous process plants and computer systems

i) Acquired before 1.4.1993 :

The specified period has been recomputed by applying to the original cost, revised rates as prescribed in Schedule XIV as per notification GSR No. 756(E) dated 16.12.1993 and depreciation charge has been calculated on straight-line method by allocating the unamortized value as per books of account over the remaining part of the recomputed specified period. For this purpose the date of acquisition is taken as the last day of each year in which it is acquired/capitalized.

ii) Acquired after 1.4.1993 :

Depreciation is provided at the rates prescribed in Schedule XIV of the Companies Act, 1956.

b) In case of other Fixed Assets :

i) Acquired before 2.4.1987 depreciation is continued to be provided on "Straight Line Method" at the rates approved by the Board on technical assessment of useful life of assets or the rates prescribed under the then provisions of Income Tax Act, 1961 whichever is higher.

ii) Acquired from 2.4.1987 onwards and in existence as on 1.4.1993, depreciation is provided on straight line method at old rates prescribed in the then Schedule XIV of the Companies Act, 1956.

iii) Acquired after 1.4.1993 Depreciation is provided on straight line method as per the rates given in the revised Schedule XIV to the Companies Act, 1956 or on the basis of estimated life of the assets, whichever is higher.

c) Assets are depreciated upto 95% of their cost and balance 5% is carried in the books as residual value except in case of intangible assets.

d) Assets individually costing less than '' 5000 are fully depreciated in the year of acquisition.

e) Lease premium paid on leasehold land is amortised over the life of lease.

f) Intangible Assets consisting of computer software and SAP license cost are amortised over a period of 5 years on straight line basis from the date of acquisition.

F. INVENTORIES

a) Inventories are valued at lower of cost and net realizable value except in case of;

i) Raw materials are valued at cost on weighted average basis.

ii) Stores and spares, which are valued at cost, determined as per weighted average cost method,

iii) By-products which are valued at estimated net realizable value, and

iv) Intermediate products which are exclusively held for captive consumption are valued at cost.

b) For the purpose of valuation of stock-in-process and stock of finished goods pending inspection, the same is converted into equivalent units of finished products held for captive consumption depending upon stage of completion.

c) The cost of Catalyst is amortised over their estimated useful lives. Balance unamortised portion has been shown under the head "Stores and Spares".

d) Provision for non-moving / obsolete stores and spares are made based on technical assessment.

G. SUNDRY DEBTORS

Provision for Doubtful debts/Loans/Advances: Full provision is made in the books, in respect of Sundry Debtors outstanding for more than 3 years except for in respect of receivables from Government departments/Companies.

In respect of other Debtors, Loans & Advances the provisions are made to the extent considered not recoverable by the management.

H. REVENUE RECOGNITION

a) The "Sales" are stated on the basis of invoices net of sales tax and trade discounts.

b) Revenue from sale of Scrap and obsolete stores is accounted for at the time of disposal.

c) Delayed payment charges due from customers other than Government Companies/Departments are accrued as income where Management is certain about its recoverability.

d) Interest income is recognized when no significant uncertainty as to its realization exists.

e) Benefit of Duty Credit are accounted on accrual basis.

I. GOVERNMENT GRANTS

The company is following income approach for accounting for the government grants in-respect of the depreciable assets as described in Accounting Standard 12- ''Accounting for Government Grants''. The grants related to depreciable assets are treated as deferred income which is recognised in the statement of profit and loss on proportionate basis over the useful life of the assets and allocation to income is made in proportion in which the depreciation on related assets is charged.

J. FOREIGN CURRENCY TRANSACTIONS

Transactions in Foreign currency are recorded in the reporting currency by applying currency rate as at the date of transaction. Receivables and Payables involving foreign currency are translated at the rates of exchange prevalent on the Balance Sheet date. Exchange differences (gains or losses) are treated as Revenue and charged to the statement of profit and loss.

K. BOND ISSUE EXPENSES

Bond Issue Expenses are being charged off against Securities Premium Account as per the provisions of the Companies Act, 1956.

L. RETIREMENT BENEFITS

a) Company''s contribution to provident fund is accounted for on accrual basis.

b) Short term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

c) Post employment and other long term employee benefits are recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and loss in respect of post employment and other long term benefits are charged to the statement of profit and loss.

d) Bonus is provided under the Payment of Bonus Act, 1965, on the basis of profitability of each Unit.

M. INVESTMENTS

a) Long term investments are stated at cost less decline, if any, other than temporary in value on individual investment basis.

b) Investments intended to be held for not more than one year from the date of acquisition are classified as current investments and are carried at lower of cost or fair value determined on individual investment basis.

N. PRIOR PERIOD ADJUSTMENTS

Items of income / expenses above Rs. 10000 in each case relating to previous years, are accounted as prior period adjustments.

O. PREPAID EXPENSES

Prepaid expenses are accounted for only where the amounts relate into unexpired period exceeds Rs. 10000 in each case.

P. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The 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.

Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) 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. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in the financial statements.


Mar 31, 2013

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The fi nancial statements have been prepared on accrual basis, unless stated otherwise, under the historical cost convention, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

B. USE OF ESTIMATES

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

C. FIXED ASSETS

a) Fixed Assets are stated at historical cost less depreciation. Costs include all expenses incurred to bring the assets to its present location and condition.

b) The constructed/fabricated capital assets are capitalized as and when the same are installed in the plants.

c) Machinery spares which are procured for use in connection with particular machinery/equipment and stand by equipments which are identifi ed to a particular item of fi xed asset and having irregular use are capitalized and written off over the remaining useful life of the machinery/ equipment.

d) In respect of Plant and Machinery, signifi cant expenditure on repairs, renewals and replacement having a separate identity and is capable of being used after the existing assets are disposed off or which are certifi ed by the concerned technical department to have resulted in technical improvement, increased capacity or increased useful life of the assets, is capitalised. The estimated residual value of the replaced parts, determined on technical assessment is charged to Statement of Profi t and Loss as loss on scrapping of assets.

e) Items of fi xed assets that have been retired from active use and are held for disposal are valued at lower of their net book value or net realisable value.

D. IMPAIRMENT OF ASSETS

The carrying amount of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profi t and Loss in the year in which an asset is identifi ed as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

E. DEPRECIATION

The classifi cation of plant and machinery into continuous and non- continuous process is done as per technical certifi cate and depreciation thereon is provided accordingly.

a) In case of continuous process plants and computer systems i) Acquired before 1.4.1993 :

The specifi ed period has been recomputed by applying to the original cost, revised rates as prescribed in Schedule XIV as per notifi cation GSR No. 756(E) dated 16.12.1993 and depreciation charge has been calculated on straight-line method by allocating the unamortized value as per books of account over the remaining part of the recomputed specifi ed period. For this purpose the date of acquisition is taken as the last day of each year in which it is acquired/capitalized ii) Acquired after 1.4.1993 :

Depreciation is provided at the rates prescribed in Schedule XIV of the Companies Act, 1956.

b) In case of other Fixed Assets :

i) Acquired before 2.4.1987 depreciation is continued to be provided on "Straight Line Method" at the rates approved by the Board on technical assessment of useful life of assets or the rates prescribed under the then provisions of Income Tax Act, 1961 whichever is higher.

ii) Acquired from 2.4.1987 onwards and in existence as on 1.4.1993, depreciation is provided on straight line method at old rates prescribed in the then Schedule XIV of the Companies Act, 1956.

iii) Acquired after 1.4.1993 Depreciation is provided on straight line method as per the rates given in the revised Schedule XIV to the Companies Act, 1956 or on the basis of estimated life of the assets, whichever is higher.

c) Assets are depreciated upto 95% of their cost and balance 5% is carried in the books as residual value except in case of intangible assets.

d) Assets individually costing less than Rs. 5000 are fully depreciated in the year of acquisition.

e) Lease premium paid on leasehold land is amortised over the life of lease.

f) Intangible Assets consisting of computer software and SAP license cost are amortised over a period of 5 years on straight line basis from the date of acquisition.

F. INVENTORIES

a) Inventories are valued at lower of cost and net realizable value except in case of;

i) Raw materials are valued at cost on weighted average basis.

ii) Stores and spares, which are valued at cost, determined as per weighted average cost method,

iii) By-products which are valued at estimated net realizable value, and

iv) Intermediate products which are exclusively held for captive consumption are valued at cost.

b) For the purpose of valuation of stock-in-process and stock of fi nished goods pending inspection, the same is converted into equivalent units of fi nished products held for captive consumption depending upon stage of completion.

c) The cost of Catalyst is amortised over their estimated useful lives. Balance unamortised portion has been shown under the head "Stores and Spares".

d) Provision for non-moving / obsolete stores and spares are made based on technical assessment.

G. SUNDRY DEBTORS

Provision for Doubtful debts/Loans/Advances: Full provision is made in the books, in respect of Sundry Debtors outstanding for more than 3 years except for in respect of receivables from Government departments/ Companies. In respect of other Debtors, Loans & Advances the provisions are made to the extent considered not recoverable by the management.

H. REVENUE RECOGNITION

a) The "Sales" are stated on the basis of invoices net of sales tax and trade discounts.

b) Revenue from sale of Scrap and obsolete stores is accounted for at the time of disposal.

c) Delayed payment charges due from customers other than Government Companies/Departments are accrued as income where Management is certain about its recoverability.

d) Interest income is recognized when no signifi cant uncertainty as to its realization exists.

e) Benefi t of Duty Credit are accounted on accrual basis.

I. GOVERNMENT GRANTS

The company is following income approach for accounting for the government grants in-respect of the depreciable assets as described in Accounting Standard 12 - Accounting for Government Grants''. The grants related to depreciable assets are treated as deferred income which is recognised in the statement of profi t and loss on proportionate basis over the useful life of the assets and allocation to income is made in proportion in which the depreciation on related assets is charged.

J. FOREIGN CURRENCY TRANSACTIONS

Transactions in Foreign currency are recorded in the reporting currency by applying currency rate as at the date of transaction. Receivables and Payables involving foreign currency are translated at the rates of exchange prevalent on the Balance Sheet date. Exchange differences (gains or losses) are treated as Revenue and charged to the statement of profi t and loss.

K. BOND ISSUE EXPENSES

Bond Issue Expenses are being charged off against Securities Premium Account as per the provisions of the Companies Act, 1956.

L. RETIREMENT BENEFITS

a) Company''s contribution to provident fund is accounted for on accrual basis.

b) Short term employee benefi ts are recognized as an expense at the undiscounted amount in the statement of profi t and loss of the year in which the related service is rendered.

c) Post employment and other long term employee benefi ts are recognized as an expense in the statement of profi t and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and loss in respect of post employment and other long term benefi ts are charged to the statement of profi t and loss.

d) Bonus is provided under the Payment of Bonus Act, 1965, on the basis of profi tability of each Unit.

M. INVESTMENTS

a) Long term investments are stated at cost less decline, if any, other than temporary in value on individual investment basis.

b) Investments intended to be held for not more than one year from the date of acquisition are classifi ed as current investments and are carried at lower of cost or fair value determined on individual investment basis.

N. PRIOR PERIOD ADJUSTMENTS

Items of income / expenses above Rs. 10000 in each case relating to previous years, are accounted as prior period adjustments.

O. PREPAID EXPENSES

Prepaid expenses are accounted for only where the amounts relate into unexpired period exceeds Rs. 10000 in each case. P. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefi ts admissible under the provisions of the Income-tax Act, 1961.Deferred tax resulting from "timing differences" between taxable and accounting ncome is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The 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.

Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outfl ow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefi ts) 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 refl ect the current best estimates. Contingent liabilities are not recognized in the fi nancial statements. A contingent asset is neither recognized nor disclosed in the fi nancial statements.


Mar 31, 2012

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Accounting Convention:

The Accounts have been prepared on accrual basis, unless stated otherwise, under the historical cost convention, in accordance with applicable Accounting principles in India, mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

2. FIXED ASSETS

a) Fixed Assets are stated at historical cost less depreciation.

b) The constructed/fabricated capital assets are capitalized as and when the same are installed in the plants.

c) Machinery spares which are procured for use in connection with particular machinery/equipment and stand by equipments which are identified to a particular item of fixed asset and having irregular use are capitalized and written off over the remaining useful life of the machinery/ equipment.

d) In respect of Plant & Machinery, significant expenditure on Repairs, Renewals and Replacement having a separate identity and is capable of being used after the existing assets are disposed off or which are certified by the concerned Technical Department to have resulted in technical improvement, increased capacity or increased useful life of the assets, is capitalised. The estimated residual value of the replaced parts, determined on technical assessment is charged to statement of Profit and Loss under "Repairs & Maintenance".

e) Impairment of Assets :

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

3. DEPRECIATION

The classification of plant and machinery into continuous and non- continuous process is done as per technical certificate and depreciation thereon is provided accordingly.

a) In case of continuous process plants and computer systems

i. Acquired before 1.4.1993 :

The specified period has been recomputed by applying to the original cost, revised rates as prescribed in Schedule XIV as per notification GSR No. 756(E) dated 16.12.1993 and depreciation charge has been calculated on straight-line method by allocating the unamortized value as per books of account over the remaining part of the recomputed specified period. For this purpose the date of acquisition is taken as the last day of each year in which it is acquired/capitalized.

ii. Acquired after 1.4.1993 :

Depreciation is provided at the rates prescribed in Schedule XIV of the Companies Act, 1956.

b) In case of other Fixed Assets :

i. Acquired before 2.4.1987 depreciation is continued to be provided on "Straight Line Method" at the rates approved by the Board on technical assessment of useful life of assets or the rates prescribed under the then provisions of Income Tax Act, 1961 whichever is higher.

ii. Acquired from 2.4.1987 onwards and in existence as on 1.4.1993, depreciation is provided on straight line method at old rates prescribed in the then Schedule XIV of the Companies Act, 1956.

iii. Acquired after 1.4.1993 Depreciation is provided on straight line method as per the rates given in the revised Schedule XIV to the Companies Act, 1956. Or on the basis of estimated life of the assets, whichever is higher.

c) Lease premium paid on leasehold land is amortised over the life of lease.

4. EXPENDITURE DURING CONSTRUCTION PERIOD

All revenue expenses including interest incurred on the funds used/ incurred for acquiring, erecting and commissioning Fixed Assets are transferred to "Expenditure during Construction", which is allocated to capital cost of respective assets on their completion, except in case of assets held for disposal. All indirect revenue expenditures are apportioned as determined by the Management.

5. INVENTORIES

a) Inventories are valued at lower of cost and net realizable value except in case of;

i. Raw materials which are valued at cost, since finished goods which are produced using the same are expected to be sold at above cost.

ii. Stores and spares, which are valued at cost, determined as per weighted average cost method,

iii. By-products which are valued at estimated net realizable value, and

iv. Intermediate products which are valued at cost of production or net realizable value whichever is lower where cost is determined as per average cost of production.

b) For the purpose of valuation of stock-in-process and stock of finished goods pending inspection, the same is converted into equivalent units of finished products held for captive consumption depending upon stage of completion.

c) The cost of Catalyst is amortised over their estimated useful lives. Balance unamortised portion has been shown under the head "Stores and Spares".

6. SUNDRY DEBTORS

Provision for Doubtful debts/Loans/Advances: Full provision is made in the books, in respect of Sundry Debtors outstanding for more than 3 years (except in respect of receivables from Government departments/Companies) except where the company has filed a civil suit for recovery of dues and the suit is yet to be decided, other than wherever found necessary in the circumstances of the case.

In respect of other Debtors, Loans & Advances the provisions are made to the extent considered not recoverable by the management.

7. REVENUE RECOGNITION

a) The "Sales" are stated on the basis of invoices net of sales tax and trade discounts.

b) Revenue from sale of Scrap and obsolete stores is accounted for at the time of disposal.

c) Delayed payment charges due from customers other than Government Companies/Departments are accrued as income where Management is certain about its recoverability.

d) claims for delayed payment charges in case of Government Companies/Departments are referred to the Arbitrators as prescribed by the Government of India and revenue is recognized upon receipts of award from the Arbitrators.

e) Interest income is recognized when no significant uncertainty as to its realization exists.

f) Benefit of Duty Credit are accounted for on the basis of actual utilization or transfer of credit.

8. FOREIGN CURRENCY TRANSACTIONS

Transactions in Foreign currency are recorded in the reporting currency by applying currency rate as at the date of transaction. Receivables and Payables involving foreign currency are translated at the rates of exchange prevalent on the Balance Sheet date. Exchange differences (gains or losses) are treated as Revenue and charged to the Statement of Profit & Loss.

9. BOND ISSUE EXPENSES

Bond Issue Expenses are being charged off against Securities Premium Account as per the provisions of the Companies Act, 1956.

10. RETIREMENT BENEFITS

a) Company's contribution to provident fund is accounted for on accrual basis.

b) Liability on Account of Gratuity and leave encashment to the employees at the end of the year is provided for on the basis of Actuarial Valuation every year.

11. BONUS

Bonus is provided under the Payment of Bonus Act, 1965, on the basis of profitability of each Unit.

12. INVESTMENTS

a) Long term investments are stated at cost less decline, if any, other than temporary in value on individual investment basis.

b) Investments intended to be held for not more than one year from the date of acquisition are classified as current investments and are carried at lower of cost or fair value determined on individual investment basis.

13. PRIOR YEAR / PREPAID EXPENSES

Prepaid /Prior Year expenses not exceeding Rs. 10,000/- in respect of each item, is accounted for under appropriate heads, at the time of payment.

14. CONTINGENT LIABILITIES

Claims against the Company not acknowledged as debts relating to normal business transactions and show cause notices and demands raised by tax authorities disputed by the Company are treated as Contingent Liabilities and disclosure is made in accordance with AS -29.


Mar 31, 2011

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Accounting Convention:

The Accounts have been prepared on accrual basis, unless stated otherwise, under the historical cost convention, in accordance with applicable Accounting principles in India, mandatory Accounting Standards issued by the Institute of Chartered Accountants ot India and the relevant provisions of the Companies Act, 1956.

2. FIXED ASSETS

a) Fixed Assets are stated at historical cost less depreciation.

b) The constructed/fabricated capital assets are capitalized as and when the same are installed in the plants.

c) Machinery spares which are procured for use In connection with particular machinery/equipment and stand by equipments which are identified to a particular item of fixed asset and having irregular use are capitalized and written off over the remaining useful life or the machinery/equipment.

d) In respect of Plant & Machinery, significant expenditure on Repairs, Renewals and Replacement having a separate identity and is capable of being used after the existing assets are disposed off or which are certified by the concerned Technical Department to have resulted in technical improvement, increased capacity or increased useful life of the assets, is capitalised. The estimated residual value of the replaced parts, determined on technical assessment is charged to Profit & Loss Account under "Repairs & Maintenance".

e) Impairment of Assets:

An asset Is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

3. DEPRECIATION

The classification of plant and machinery into continuous and non-continuous process is done as per technical certificate and depreciation thereon is provided accordingly.

a) In case of continuous process plants and computer systems i. Acquired before 1.4.1993:

The specified period has been recomputed by applying to the original cost, revised rates as prescribed in Schedule XIV as per notification GSR No. 756(E) dated 16.12.1993 and depreciation charge has been calculated on straight-line method by allocating the unamortized value as per books of account over the remaining part of the recomputed specified period. For this purpose the date of acquisition is taken as the last day of each year in which it is acquired/capitalized. ii. Acquired after 1.4.1993:

Depreciation is provided at the rates prescribed in Schedule XIV of the Companies Act, 1956,

b) In case of other Fixed Assets:

i. Acquired before 2.4.1987 depreciation is continued to be provided on "Straight Line Method" at the rates approved by the Board on technical assessment of useful life of assets or the rates prescribed under the then provisions of Income Tax Act, 1961 whichever is higher.

H. Acquired from 2.4.1987 onwards and in existence as on 1.4.1993, depreciation is provided on straight-line method at old rates prescribed in the then Schedule XIV of the Companies Act, 1956.

iii. Acquired after 1.4.1993 depreciation Is provided on straight-line method as per the rates given in the revised Schedule XIV to the Companies Act, 1956. Or on the basis of estimated life of the assets, whichever is higher.

c) Lease premium paid on leasehold land is amortised over the life of lease.

4. EXPENDITURE DURING CONSTRUCTION PERIOD

All revenue expenses including interest incurred on the funds used/Incurred for acquiring, erecting and commissioning Fixed Assets are transferred to "Expenditure during Construction", which is allocated to capital cost of respective assets on their completion, except in case of assets held for disposal. All indirect revenue expenditures are apportioned as determined by the Management.

5. INVENTORIES

a) Inventories are valued at lower of cost and net realizable value except in case of;

i. Raw materials which are valued at cost, since finished goods which are produced using the same are expected to be sold at above cost.

ii. Stores and spares, which are valued at cost, determined as per weighted average cost method,

iii. By-products which are valued at estimated net realizable value, and

iv. Intermediate products which are valued at cost of production or net realizable value whichever is lower where cost is determined as per average cost of production.

b) For the purpose of valuation of stock-in-process and stock of finished goods pending inspection, the same is converted into equivalent units of finisfwd products held for captive consumption depending upon stage of completion.

c) The cost of Catalyst is amortised over their estimated useful lives. Balance unamortised portion has been shown under the head "Stores and Sparese.

6. SUNDRY DEBTORS

Provision for Doubtful debts/Loans/Advances: Full provision is made it) the books, in respect of Sundry Debtors outstanding for more than 3 years (exgept in respect of receivables from Government departments/Companies) exsept where the Company has filed a cMI suit for recovery of dues and the suit it yet to be decided, other than wherever found necessary in the circumstances of the case.

In respect of other Debtors, Loans & Advances the provisions are made to the extent considered not recoverable by the management.

7. REVENUE RECOGNITION

a) The "Sales" are stated on the basis of invoices net of sales tax and trade discounts.

b) Revenue from sale of Scrap and obsolete stores is accounted for at the time of disposal.

c) Delayed payment charges due from customers other than Government Companies/Departments are accrued as income where Management is certain about its recoverability.

d) Claims for delayed payment charges in case of Government Companies/Departments are referred to the Arbitrators as prescribed by the Government of India and reyenue is recognized upon receipts of award from the Arbitrators.

e) Interest income is recognized when no significant uncertainty as to its realization exists.

f) Benefit of Duty Credit are accounted for on the basis of actual utilization or transfer of credit.

8. FOREIGN CURRENCY TRANSACTIONS

Transactions in Foreign currency are recorded in the reporting currency by applying currency rate as at the date of transaction. Receivables and Payables involving foreign currency are translated at the rates of exchange prevalent on the Balance Sheet date. Exchange differences (gains or losses) are treateq as Revenue and charged to the Profit & Loss Account.

9. BOND ISSUE EXPENSES

Bond Issue Expenses are being charged off against Securities Premium Account as per the provisions of the Companies Act, 1956.

10. RETIREMENT BENEFITS

a) Company's contribution to provident fund is accounted for on accrual basis.

b) Liability on Account of Gratuity and leave encashment to the employees at the end of the year is provided for on the basis of Acturial Vakifpon every year.

11. BONUS

Bonus is provided under the Payment of Bonus Act, 1965, on the bas|s of profitability of each Unit.

12. INVESTMENTS

a) Long term investments are stated at cost less decline, if any, other than temporary in value on individual investment basis.

b) Investments intended to be held for not more than one year from the date of acquisition are classified as current investments and are carried at lower of cost or fair value determined on individual Investment bftsis.

13. PRIOR PERIOD/PREPAID EXPENSES

Prepaid/Prior period expenses not exceeding Rs. 10,000/- In respect of each item, is accounted for under appropriate heads, at the time of payment.

14. CONTINGENT LIABILITIES

Claims against the Company not acknowledged as debts relating to normal business transactions and show cause notices and demands rased by tax authorities disputed by the Company are treated as Contingent Liabilities and disclosure is made in accordance with AS-29.








Mar 31, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Accounts have been prepared on accrual basis, unless stated otherwise, under the historical cost convention, in accordance with applicable Accounting principles in India, mandatory Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

2. FIXED ASSETS

a) Fixed Assets are stated at historical cost less depreciation.

b) The constructed/fabricated capital assets are capitalized as and when the same are installed in the plants.

c) Machinery Spares which are procured for use in connection with, particular ma- chinery/equipment and stand by equipments which are identified to a particular item of fixed asset and having irregular use are capitalized and written off over the remaining useful life of the machinery/ equipment.

d) In respect of Plant & Machinery, significant expenditure on Repairs, Renewals and Replacement having a separate identity and is capable of being used after the existing assets is disposed off or which are certified by the concerned Tech- nical Department to have resujted in technical improvement, increased capacity or increased useful life of the assets, is capitalised. The estimated residual value of the replaced parts, determined on technical assessment is charged to Profit & Loss Account under "Repairs & Maintenance".

e) Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised-in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

3. DEPRECIATION

The classification of plant and machinery into continuous and non-continuous process-is done as per technical certificate and depreciation thereon is provided accordingly.

a) In case of continuous process plants and computer systems Acquired before 1.4.1993 :

The specified period has been recomputed by applying to theoriginal cost, revised, rates as prescribed in Schedule XIV as per notification GSR No. 756(E) dated 16.12.1993 and depreciation charge has been calculated on straight-line method by allocating the unamortized value as per books of account over the remaining part of the recomputed specified period. For* this purpose the date of acquisition is taken as the last day of each year in which it is acquired/capitalized. ii. Acquired after 1.4.1993 :

Depreciation is provided at the rates prescribed in Schedule XIV of the Companies Act 1956,

b) In case of other Fixed Assets :

i. Acquired before 2.4.1987 depreciation is continued to be provided on- "Straight Line Method" at the rates approved by the Board on technical assessment of useful We of assets or the rates prescribed under the then provisions of Income Tax Act, 1961 whichever is higher.

ii. Acquired from 2.4.1987 onwards and in existence as on 1.4.1993, depre- ciation is provided on straight line method at old rates prescribed in the then Schedule XiV of the Companies Act, 1956.

iii. Acquired after 1.4.1993 Depreciation is provided on straight line method as per the rates given in the revised Schedule XIV to the Companies Act, 1956, or on the basis of estimated life of the assets, whichever is higher.

c) Lease premium paid on leasehold land is amortised over the life of lease.

4. EXPENDITURE DURING CONSTRUCTION PERIOD

Ail revenue expenses including interest incurred on the funds used/incurred for- acquiring, erecting and commissioning Fixed Assets are transferred to "Expendi- ture during Construction", which is allocated to capital cost of respective assets on their completion, except in case of assets held for disposal. All indirect rev- enue expenditures are apportioned as determined by the Management.

5. INVENTORIES

a) Inventories are valued at lower of cost and net realizable value except in case of;

i. Stores and spares, which are valued at cost, determined as per

weighted average cost method, * ii. By-products which are valued at estimated net realizable value, and iii. Intermediate products which are valued at cost of production or.net realizable value whichever is lower where cost is determined as per average cost of production.

b) For the purpose of valuation of stock-in-process and stock of finished goods pending inspection, the same is converted into equivalent units of finished products depending upon stage of completion.

c) The cost of Catalyst is amortised over their estimated useful lives. Balance unamortised portion has been shown under the head "Stores and Spares".

6. SUNDRY DEBTORS

Provision for Doubtful debts/Loans/Advances: Full provision is made in the books, in respect of Sundry Debtors outstanding for more than 3 years (except in re- spect of receivables from Government departments/Companies) except where the company has filed a civil suit for recovery of dues and the suit is yet to be decided, other than wherever found necessary in the circumstances of the case. In respect of other Debtors, Loans & Advances the provisions are made to the extent considered not recoverable by the management.

7. REVENUE RECOGNITION

a) The "Sales" are stated on the basis of invoices net of sales tax and trade discounts.

b) Revenue from sale of Scrap and obsolete stores is accounted for at the time of disposal.

c) Delayed payment charges due from customers other than Government Companies/Departments are accrued as income where Management is certain about its recoverabitity.

d) Claims for delayed payment charges in case of Government Companies/ Departments are referred to the Arbitrators as prescribed by the Govern- ment of India and revenue is recognized upon receipts of award from the Arbitrators.

e) Interest income is recognized when no significant uncertainty as to its real- ization exists.

f) Benefit of Duty Credit are accounted for on the basis of actual utilization or transfer of credit.

8. FOREIGN CURRENCY TRANSACTIONS

Transactions in Foreign currency are recorded in the reporting currency by ap- plying currency rate as at the date of transaction. Receivables and Payables involving foreign cdrrency are translated at the rates of exchange prevalent on the Balance Sheet date. Exchange differences (gains or losses) are treated as Revenue and charged to the Profit & Loss Account.

9. BOND ISSUE EXPENSES

Bond issue Expenses are being charged off against Securities Premium Account as per the provisions of the Companies Act, 1956.

10. VRS EXPENDITURE

The expenditure-incurred including gratuity (net of Grant-in-aid, if any) on Volun* tary Retirement of employees, as per the Voluntary Retirement Scheme is treated as deferred revenue expenditure and is amortised over a period of 5 years and is accounted based on the actual payment made on the date of relieving of the employees.

11. RETIREMENT BENEFITS.

a) Companys contribution to provident fund is accounted for on accrual basis.

b) Liability on Account of Gratuity and leave encashment to the employees at the end of the year is provided for on the basis of Acturial Valuation every year.

12; BONUS

Bonus is provided under the Payment of Bonus Act, 1965, on the basis of profitability of each Unit.

13. INVESTMENTS

a) Long term investments are stated at cost less decline, if any, other than temporary in value on individual investment basis.

b) Investments intended to be held for not more than one year from the date of acquisition are classified as current investments and are carried at lower of cost or fair value determined on individual investment basis.

14. PRIOR PERIOD/PREPAID EXPENSES

Prepaid /prior period expenses not exceeding Rs. 10,000/- in respect of each item, is accounted for under appropriate heads, at the time of.payment.

15. CONTINGENT LIABILITIES.

Claims against the Company not acknowledged as debts relating to normal busi- ness transactions and show cause notices and demands raised by tax authorities disputed by the Company are treated as Contingent Liabilities and disclo- sure is made in accordance with AS -4.



 
Subscribe now to get personal finance updates in your inbox!