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Accounting Policies of Insecticides (India) Ltd. Company

Mar 31, 2015

1. CORPORATE INFORMATION

Insecticides (India) Limited (The Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The company has its primary listings on the BSE Limited and National Stock Exchange in India. The Company is engaged in the manufacturing activities of Agro Chemicals, Pesticides and Technical Products for agriculture purposes. The Company caters to both domestic and international markets.

A. ACCOUNTING CONVENTION

These financial statements have been prepared to comply with Generally accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act,2013.

The Financial statements are prepared on accrual basis under the historical cost convention. Accounting Policies not specifically referred to otherwise, are consistent and in consonance with generally accepted Accounting Principles.

B. USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of Assets & Liabilities, disclosure of Contingent Liabilities on the date of Financial Statements and the reported amount of Expenses and Income during the reporting period. Difference between the estimates and actual results are recognized in the period in which the results are known /materialized.

C. TANGIBLE FIXED ASSETS (OWNED)

Fixed Assets are stated at cost of acquisition net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost of tangible assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets.

Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from existing asset beyond its previously assessed standard of performance.

Projects under which assets are not ready for their intended use are shown as Capital Work in Progress.

D. INTANGIBLE ASSETS

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

E. LEASED ASSETS

The Company do not have any leased assets.

F. DEPRECIATION, AMORTISATION & DEPLETION

Depreciation on Fixed Assets has been provided on Straight Line Method based on useful life of the assets as prescribed in Schedule II of the Companies Act, 2013 except in respect of following assets, where useful life is different than those prescribed in Schedule II are used;

Particulars Depreciation

Office/Godown Building (Useful Life : 60 years) Over a period of 30 years as technically assessed Plant & Machinery (Useful Life : 15 years) Over a period of 20 years as technically assessed Depreciation on assets acquired/disposed off during the year has been provided on pro-rata basis with reference to the date of use/ addition/disposal.

Intangible Assets are amortized on Straight Line Method over their useful life.

Impact of change in Depreciation due to change in Companies Act, 2013

According to the new provisions of Schedule II of Companies Act, 2013 the depreciation on assets comes out to be 1416.82 Lacs as against the depreciation of 878.22 Lacs as per Companies Act,1956.

The profits for the period were decreased by 538.60 Lacs due to changes adopted pursuant to the Schedule II of Companies Act, 2013.

G. INVESTMENTS

Current investments, if any, are stated at lower of cost or fair value determined on individual investment basis. Non Current investments are stated at cost. Provision for diminution in the value of non current investments is made only if such decline is other than temporary.

H. PURCHASES

Purchases are net of rebate/special discounts, excise duty, goods returned etc.

I. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

Sales of goods: Sale are recognized when substantial risks and rewards of ownership in the goods transferred to the buyer, usually on delivery of the goods. Turnover includes sales of goods & excise duty (net of sales returns, sales tax/ value added tax)

Other Income: Interest income is recognized on time proportion basis taking in to account the amount outstanding and the interest rate applicable.

Dividend Income is recognized when the right to receive payment is established.

Export Incentives: Export incentives are recognized in the statement of Profit & Loss when the right to receive incentives is established in respect of exports made and when there is no significant uncertainty regarding the collection of the relevant export proceeds.

J. FOREIGN CURRENCY TRANSACTIONS

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b) Monetary items denominated in foreign currency at the yearend are restated at the yearend rate. In case of items which are covered by forward exchange contracts, the difference between the yearend rate and rate on the date of contract is recognized as exchange rate difference and the premium paid on forward contracts is recognized over the life of the contract.

c) Non monetary foreign currency items are carried at cost.

d) Any Gain or Loss on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss except in case they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

K. RETIREMENT BENEFITS

a) Contribution to provident fund and family pension fund are accounted for on accrual basis.

b) The company provides for Leave Encashment Benefits. The expenses towards leave encashment are recognized in the Statement of Profit & Loss on the basis of an actuarial valuation based on projected unit credit method carried out at the year-end.

c) The Company provides for gratuity, a defend benefit retirement plan ('the Gratuity Plan') covering eligible employees. The Company has Gratuity Fund covered by the scheme with LIC of India. The expenses towards gratuity are recognized in the Statement of Profit & Loss on the basis of an actuarial valuation based on projected unit credit method carried out at the year-end.

L. IMPAIRMENT OF ASSETS

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period(s), if any, is reversed if there has been a change in the estimate of the recoverable amount.

M. EXCISE DUTY

Excise duty is accounted on the basis of both, payments made in respect of goods cleared and also provision made for goods lying in branches/factories.

N. INVENTORIES

The items of inventories are measured at cost after providing for obsolescence, if any. Cost of inventories comprise of cost of purchase, cost of conversion and appropriate portion of variable and fixed proportion overheads and such other costs incurred in bringing them to their respective present location and condition including excise duty wherever applicable. Fixed production overheads are based on normal capacity of production facilities. Cost of raw material, process chemicals, stores and spares packing materials, trading and other products are determined on weighted average basis.

O. BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time as the asset is ready for its intended use. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use.

All other borrowing costs are recognized as expense in the statement of profit & loss in the period in which they are incurred.

P. PROPOSED DIVIDEND

Dividend proposed by the Board of Directors is provided for in the books of account and is pending for approval at the Annual General Meeting.

Q. RESEARCH & DEVELOPMENT

The expenditure on Research & Development for technical plants at Dahej & Chopanki is recognized as an expense in the Statement of Profit & Loss on an accrual basis. The fixed assets acquired for carrying out the research & development activities are capitalized and depreciation thereon is recognized as an expense in the Statement of Profit & Loss.

R. PROVISION FOR CURRENT & DEFERRED TAX

Ta x expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

S. FINANCIAL DERIVATIVES HEDGING TRANSACTIONS

In respect of derivatives contracts, premium paid, gain/loss on settlement and losses on restatement are recognized in the Statement of Profit & Loss except in case they relates to the acquisition or construction of fixed assets, they are adjusted to the carrying cost of such assets.

T. Claims by or against the Company are accounted when acknowledged/ accepted/ settled/ received.

U . Interest on Late Payments by the customers & to the suppliers and differential interest to the bankers are accounted for on acceptance basis.

V . The bonus is accounted for on accrual basis.

W. The Company has already initiated the process and entitled for subsidy on account of certain revenue and capital nature of expenditures incurred at Samba & Udhampur Units in earlier years. The company's policy is to account for subsidy on cash/acceptance basis as under:

Subsidy of capital nature and related to specific Fixed Asset shall be deducted from the gross value of assets.

Subsidy related to revenue shall be recognized in the Statement of Profit & Loss to match them with related costs.

X. PROVISIONS, CONTINGENT LIABILITIES, CONTINGENT ASSETS

Provision is recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent Liabilities are not recognized but are disclosed in the notes.

Contingent Assets are neither recognized nor disclosed in the financial statements.

Y. MAT CREDIT ENTITLEMENTS

The Company is liable to pay income tax u/s 115JA & 115JB of the Income Tax Act during the year. In terms of the Guidance Note issued by the Council of the Institute of Chartered Accountants of India "on accounting for credit available in respect to MAT under the Income Ta x act", the MAT Credit available is treated as an "Asset" if the MAT credit has expected future economic benefits in the form of its adjustment against the discharge of the normal tax liability if the same arises during the specified period and accordingly the necessary provisions has been made by the company during the year.


Mar 31, 2014

A. ACCOUNTING CONVENTION

These Financial Statements have been prepared to comply with Accounting Principles Generally accepted in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act,1956.

The Financial Statements are prepared on accrual basis under the Historical Cost Convention. Accounting Policies not specifically referred to otherwise, are consistent and in consonance with generally accepted Accounting Principles.

B. USE OF ESTIMATES

The preparation of Financial Statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of Assets & Liabilities, Disclosure of Contingent Liabilities on the date of Financial Statements and the reported amount of Expenses and Income during the reporting period. Difference between the estimates and actual results are recognized in the period in which the results are known /materialized.

C. TANGIBLE FIXED ASSETS (OWNED)

Fixed Assets are stated at cost of acquisition Net of Recoverable Taxes, Trade Discounts and Rebates and includes all attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation and impairment loss, if any. The cost of tangible assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the Fixed Assets.

Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from existing asset beyond its previously assessed standard of performance. Projects under which assets are not ready for their intended use are shown as Capital Work in Progress.

D. INTANGIBLE ASSETS

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the Intangible Assets.

E. LEASED ASSETS

The Company do not have any Leased Assets.

F. DEPRECIATION, AMORTISATION & DEPLETION

Depreciation on Fixed Assets has been provided on Straight Line Method over their useful life as per the classification, rates and manner prescribed in Schedule XIV of the Companies Act, 1956 as amended up to date. Depreciation on assets acquired/disposed off during the year has been provided on pro-rata basis with reference to the date of use/addition/ disposal. Intangible Assets are amortized on Straight Line Method over their useful life.

G. INVESTMENTS

Current Investments, if any, are stated at lower of cost or fair value determined on individual investment basis. Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

H. PURCHASES

Purchases are net of rebate/special discounts, excise duty, goods returned etc.

I. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

Sales of Goods: Sale are recognized when substantial risks and rewards of ownership in the goods transferred to the buyer, usually on delivery of the goods. Turnover includes Sales of Goods & Excise Duty (Net of Sales Returns, Sales Tax/ Value Added Tax)

Other Income: Interest income is recognized on time proportion basis taking in to account the amount outstanding and the rate applicable.

Export Incentives: Export incentives are recognized in the Statement of Profit & Loss when the right to receive incentives is established in respect of exports made and when there is no significant uncertainty regarding the collection of the relevant Export Proceeds.

J. FOREIGN CURRENCY TRANSACTIONS

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b. Monetary items denominated in foreign currency at the year end are restated at the year end rate. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognized as exchange rate difference and the premium paid on forward contracts is recognized over the life of the contract.

c. Non monetary foreign currency items are carried at cost.

d. Any Gain or Loss on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss except in case they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

K. RETIREMENT BENEFITS

a) Contribution to Provident Fund and Family Pension Fund are accounted for on accrual basis.

b) Leave Encashment Benefits are accounted for on cash basis.

c) The Company has Gratuity Fund covered by the scheme with LIC of India. The expenses towards gratuity are recognized in the Statement of Profit & Loss on the basis of an actuarial valuation based on projected unit credit method carried out at the year-end.

L. IMPAIRMENT OF ASSETS An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period(s), if any, is reversed if there has been a change in the estimate of the recoverable amount.

M. EXCISE DUTY

Excise Duty is accounted on the basis of both, payments made in respect of goods cleared and also provision made for goods lying in Branches/Factories.

N. INVENTORIES

The items of Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of Inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw material, process chemicals, stores and spares packing materials, trading and other products are determined on weighted average basis.

O. BORROWING COSTS

Borrowing Costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale.

All other Borrowing Costs are recognized as expense in the period in which they are incurred.

P. PROPOSED DIVIDEND

Dividend proposed by the Board of Directors is provided for in the books of account pending approval at the Annual General Meeting.

Q. RESEARCH & DEVELOPMENT

The expenditure on Research & Development is recognized as an expense in the Statement of Profit & Loss on an accrual basis. The Fixed Assets acquired for carrying out the Research & Development Activities are capitalized and depreciation thereon is recognized as an expense in the Statement of Profit & Loss.

R. PROVISION FOR CURRENT & DEFERRED TAX

Tax Expense comprises of Current Tax and Deferred Tax. Current Tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred Income Tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing difference of earlier years/period. Deferred Tax Assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

Deferred Tax Assets and Liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

S. FINANCIAL DERIVATIVES HEDGING TRANSACTIONS

In respect of derivatives contracts, premium paid, gain/loss on settlement and losses on restatement are recognized in the Statement of Profit & Loss except in case they relates to the acquisition or construction of fixed assets, they are adjusted to the carrying cost of such assets.

T. Claims by or against the Company are accounted when acknowledged/ accepted/ settled/ received.

U. Interest on Late Payments by the Customers & to the Suppliers and differential interest to the Bankers are accounted for on acceptance basis.

V. The Bonus is accounted for on accrual basis.

W. The Company has already initiated the process and entitled for subsidy on account of certain revenue and capital nature of expenditures incurred at Samba, Udhampur & Dahej Units in earlier years. The Company''s policy is to account for subsidy on cash/acceptance basis as under:

Subsidy of capital nature and related to specific Fixed Asset shall be deducted from the gross value of assets.

Subsidy related to revenue shall be recognized in the Statement of Profit & Loss to match them with related costs.

X. PROVISIONS, CONTINGENT LIABILITIES, CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

Y. MAT CREDIT ENTILEMENTS

The Company is liable to pay income tax Under Section 115JA & 115JB of the Income Tax Act during the year. In terms of the Guidance Note issued by the Council of the Institute of Chartered Accountants of India "on accounting for credit available in respect to MAT under the Income Tax Act''; the MAT Credit available is treated as an "Asset” if the MAT Credit has expected future economic benefits in the form of its adjustment against the discharge of the normal tax liability if the same arises during the specified period and accordingly the necessary provisions has been made by the Company during the year.


Mar 31, 2013

A. Accounting Convention

Accounts are prepared on the basis of historical cost convention. Accounting Policies not specifically referred to otherwise, are consistent and in consonance with generally accepted accounting principles, followed by the Company. The Financial Statements have been prepared in accordance with the relevant presentational requirement of the Companies Act 1956. A summary of important accounting policies which have been applied consistently are set out below.

B. Use of Estimates

The preparation of financial statements requires certain assumptions and estimates to be made that affect the reported amount of Assets & Liabilities on the date of Financial Statements and the reported amount of Expenses and Income during the reporting period. Difference between the estimates and actual results are recognized in the period in which the results are materialized.

C. Tangible Fixed Assets (Owned)

Fixed Assets are stated at cost of acquisition net of recoverable taxes and includes all attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation. All costs, including financial costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

D. Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization. All costs, including financial costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized.

E. Leased Assets

The Company do not have any leased assets.

F. Depreciation & Amortisation

Depreciation on Fixed Assets has been provided on Straight Line Method over their useful life as per the classification, rates and manner prescribed in Schedule XIV of the Companies Act, 1956 as amended up to date. Depreciation on assets acquired/disposed off during the year has been provided on pro-rata basis with reference to the date of use/addition/disposal. Intangible Assets are amortized on Straight Line Method over their useful life.

G. Investments

Current Investments, if any, are stated at lower of cost or fair value determined on individual investment basis. Long Term Investments, if any, are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

H. Purchases

Purchases are net of rebate/special discounts, excise duty, goods returned etc.

I. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

Sales of Goods: Sale are recognized when substantial risks and rewards of ownership in the goods transferred to the buyer, usually on delivery of the goods. Turnover includes Sales of Goods & Excise Duty (Net of Sales Returns, Sales Tax/ Value Added Tax).

Other Income: Interest Income is recognized on time proportion basis taking in to account the amount outstanding and the rate applicable.

J. Foreign Currency Transactions

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b. Monetary items denominated in foreign currency at the year end are restated at the year end rate. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognized as exchange rate difference and the premium paid on forward contracts is recognized over the life of the contract.

c. Non monetary foreign currency items are carried at cost.

d. Any Gain or Loss on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss except in case they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

K. Retirement Benefits

a) Contribution to provident fund and family pension fund are accounted for on accrual basis.

b) Leave Encashment Benefits are accounted for on cash basis.

c) The Company has Gratuity Fund covered by the scheme with LIC of India. The expenses towards gratuity are recognized in the Statement of Profit & Loss on the basis of an Actuarial Valuation based on projected unit credit method carried out at the year-end.

L. Impairment of Assets

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period(s), if any, is reversed if there has been a change in the estimate of the recoverable amount.

M. Excise Duty

Excise duty is accounted on the basis of both, payments made in respect of goods cleared and also provision made for goods lying in Branches/Factories.

N. Inventories

The items of Inventories are measured at lower of cost and net realizable value after providing for obsolescene, if any. Cost of inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw material, process chemicals, stores and spares packing materials, trading and other products are determined on weighted average basis.

O. Borrowing Costs

Borrowing Costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale.

All other borrowing costs are recognized as expense in the period in which they are incurred.

P. Proposed Dividend

Dividend proposed by the Board of Directors is provided for in the books of accounts pending approval at the Annual General Meeting.

Q. Research & Development

The expenditure on Research & Development is recognized as an expense in the Statement of Profit & Loss on an accrual basis. The fixed assets acquired for carrying out the research & development activities are capitalized and depreciation thereon is recognized as an expense in the Statement of Profit & Loss.

R. Provision for Current & Deffered Tax

Provision for income tax is made after availing exemptions & deductions at the rate(s) applicable under the Income Tax Act, 1961 for the year under consideration.

Provision for Wealth Tax is made after availing exemptions & deductions at the rate(s) applicable under the Wealth Tax Act, 1957 for the year under consideration.

Deferred tax resulting from "Timing Difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is reasonable certainty that the assets will be realized in future.

S. Financial Derivatives Hedging Transactions

In respect of derivatives contracts, premium paid, gain/loss on settlement and losses on restatement are recognized in the Statement of Profit & Loss except in case they relates to the acquisition or construction of fixed assets, they are adjusted to the carrying cost of such assets.

T. Claims by or against the company are accounted when acknowledged/accepted/settled/received.

U. Interest on Late Payments by the Customers & to the Suppliers and differential interest to the Bankers are accounted for on acceptance basis.

V. The Bonus is accounted for on accrual basis.

W. The Company has already initiated the process and entitled for subsidy on account of certain revenue and capital nature of expenditures incurred at Samba, Udhampur & Dahej Units in earlier years as well as during the year. The same shall be accounted for on cash/acceptance basis as under:

Subsidy of capital nature and related to specific Fixed Asset shall be deducted from the gross value of assets.

Subsidy related to revenue shall be recognized in the Statement of Profit & Loss to match them with related costs.

X. Provisions, Contingent Liabilities, Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

Y. MAT Credit Entitlements

The Company is liable to pay income tax u/s 115JA & 115JB of the Income Tax Act during the year. In terms of the Guidance Note issued by the Council of the Institute of Chartered Accountants of India "on accounting for credit available in respect to MAT under the Income Tax act", the MAT Credit available is treated as an "Asset" if the MAT credit has expected future economic benefits in the form of its adjustment against the discharge of the normal tax liability if the same arises during the specified period and accordingly the necessary provisions has been made by the company during the year.


Mar 31, 2012

A. ACCOUNTING CONVENTION

Accounts are prepared on the basis of historical cost convention. Accounting Policies not specifically referred to otherwise, are consistent and in consonance with generally accepted accounting principles, followed by the Company. The Financial Statements have been prepared in accordance with the relevant presentational requirement of the Companies Act 1956. A summary of important accounting policies which have been applied consistently are set out below.

B. USE OF ESTIMATES

The preparation of financial statements requires certain assumptions and estimates to be made that affect the reported amount of Assets & Liabilities on the date of Financial Statements and the reported amount of Expenses and Income during the reporting period. Difference between the estimates and actual results are recognized in the period in which the results are materialized.

C. TANGIBLE FIXED ASSETS

Fixed Assets are stated at cost of acquisition net of recoverable taxes and includes all attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation. All costs, including financial costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

D. INTANGIBLE ASSETS

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization. All costs, including financial costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized.

E. DEPRECIATION & AMORTISATION

Depreciation on Fixed Assets has been provided on Straight Line Method over their useful life as per the classification, rates and manner prescribed in Schedule XIV of the Companies Act, 1956 as amended up to date. Depreciation on assets acquired/disposed off during the year has been provided on pro-rata basis with reference to the date of use/addition/disposal. Intangible Assets are amortized on Straight Line Method over their useful life

F. INVESTMENTS

Current Investments, if any, are stated at lower of cost or fair value determined on individual investment basis. Long Term Investments, if any, are stated at cost. Provision for diminution in the value of Long Term Investments is made only if such decline is other than temporary.

G. PURCHASES

Purchases are net of rebate/special discounts, excise duty, goods returned etc.

H. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

Sales of goods: Sale are recognized when substantial risks and rewards of ownership in the goods transferred to the buyer, usually on delivery of the goods. Turnover includes sales of goods & excise duty (net of sales returns, sales tax/ value added tax)

Other Income: Interest income is recognized on time proportion basis taking in to account the amount outstanding and the rate applicable.

I. FOREIGN CURRENCY TRANSACTIONS

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b. Monetary items denominated in foreign currency at the year end are restated at the year end rate. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognized as exchange rate difference and the premium paid on forward contracts is recognized over the life of the contract.

c. Non monetary foreign currency items are carried at cost.

d. Any Gain or Loss on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss except in case they relate to acquisition of fixed assets, they are adjusted to the carrying cost of such assets.

J. RETIREMENT BENEFITS

a) Contribution to provident fund and family pension fund are accounted for on accrual basis.

b) Leave Encashment Benefits are accounted for on cash basis.

c) The Company has Gratuity Fund covered by the scheme with LIC of India. The expenses towards gratuity are recognized in the Statement of Profit & Loss on the basis of an actuarial valuation based on projected unit credit method carried out at the year-end.

K. IMPAIRMENT OF ASSETS

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period(s), if any, is reversed if there has been a change in the estimate of the recoverable amount.

L. EXCISE DUTY

Excise duty is accounted on the basis of both, payments made in respect of goods cleared and also provision made for goods lying in branches/factories.

M. INVENTORIES: Inventories are valued as under

(a) FINISHED GOODS (Manufactured Goods) Cost of Production or Net Realizable Value whichever is lower

(b) RAW MATERIAL & CONSUMABLE GOODS At cost or market price, whichever is lower (On Weighted Average Basis)

(c) OTHER INVENTORIES Packing material etc. are valued at cost (On Weighted Average Basis)

(d) SEMI FINISHED GOODS At Weighted Average Cost

(e) TRADED GOODS At Cost (On Weighted Average Basis)

(f) STORES & SPARES AND FUEL At Cost (On Weighted Average Basis)

Notes: The Valuation of stocks are in accordance with Section 145A of the Income Tax Act, 1961.

N. BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of cost of such asset till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale.

All other borrowing costs are recognized as expense in the period in which they are incurred.

O. PROPOSED DIVIDEND

Dividend proposed by the Board of Directors is provided for in the books of account pending approval at the Annual General Meeting.

P. RESEARCH & DEVELOPMENT

The expenditure on Research & Development is recognized as an expense in the Statement of Profit & Loss on an accrual basis. The fixed assets acquired for carrying out the research & development activities are capitalized and depreciation thereon is recognized as an expense in the Statement of Profit & Loss.

Q. PROVISION FOR CURRENT & DEFFERED TAX

Provision for income tax is made after availing exemptions & deductions at the rate(s) applicable under the Income Tax Act, 1961 for the year under consideration.

Provision for Wealth Tax is made after availing exemptions & deductions at the rate(s) applicable under the Wealth Tax Act, 1957 for the year under consideration.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is reasonable certainty that the assets will be realized in future.

R. FINANCIAL DERIVATIVES HEDGING TRANSACTIONS

In respect of derivatives contracts, premium paid, gain/loss on settlement and losses on restatement are recognized in the Statement of Profit & Loss except in case they relates to the acquisition or construction of fixed assets, they are adjusted to the carrying cost of such assets.

S. Claims by or against the Company are accounted when acknowledged/ accepted/ settled/ received.

T. Interest on Late Payments by the Customers & to the Suppliers and differential interest to the Bankers are accounted for on acceptance basis.

U. The bonus is accounted for on accrual basis.

V. The Company has already initiated the process and entitled for subsidy on account of certain revenue and capital nature of expenditures incurred at Samba & Udhampur Unit (Jammu & Kashmir) in earlier years as well as during the year. The same shall be accounted for on cash/acceptance basis as under:

Subsidy of capital nature and related to specific Fixed Asset shall be deducted from the gross value of assets.

Subsidy related to revenue shall be recognized in the Statement of Profit & Loss to match them with related costs.

W. PROVISIONS, CONTINGENT LIABILITIES, CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

ACCOUNTING CONVENTION

Accounts are prepared on the basis of historical cost convention. Accounting Policies not specifically referred to otherwise, are consistent and in consonance with generally accepted accounting principles, followed by the Company. Financial Statements have also been prepared in accordance with the relevant presentational requirement of the Companies Act 1956. A summary of important account policies which have been applied consistently are setout below.

USE OF ESTIMATES

The preparation of financial statements requires certain assumptions and estimates to be made that affect the reported amount of assets & liabilities on the date of Financial Statements and the reported amount of Expenses and Income during the reporting period. Difference between the estimates and actual results are recognized in the period in which the results are materialized.

1. FIXED ASSETS

a. Fixed Assets are stated at cost net of Cenvat /Value Added Tax and includes any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

b. All costs / expenses incurred relating to project prior to commencement of commercial production have been allocated / attributed to the cost of Fixed Assets.

2. DEPRECIATION

Depreciation on Fixed Assets has been provided on Straight Line Method as per the classification, rates and manner prescribed in Schedule XIV of the Companies Act, 1956 as amended up to date. Depreciation on assets acquired/disposed off during the year has been provided on Pro-rata basis with reference to the date of use/addition/disposal.

3. INVESTMENTS

The Company came out with an IPO during the financial year 2007-08 and the remaining amount to be utilized out of IPO has been kept separately in the shape of investments in the Units of Mutual Funds under dividend plan. The said investments are stated at cost.

4. PURCHASES

Purchases are net of rebate/special discounts, excise duty, goods returned etc.

5. TURNOVER

Turnover includes sale of goods (Net of Sales Returns, Sales Tax/ Value Added Tax) & Excise Duty.

6. FOREIGN CURRENCY TRANSACTIONS

a. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

b. Any Gain or Loss on account of exchange difference either on settlement or on translation is being debited &/or credited to Profit & Loss Account under the captioned head "Exchange Fluctuation". Similarly, where they relate to acquisition of fixed assets, they are being adjusted to the carrying cost of such assets.

7. RETIREMENT BENEFITS

a) Contribution to provident fund and family pension fund are accounted for on accrual basis.

b) Leave Encashment Benefits are accounted for on cash basis

c) The Company has Gratuity Fund covered by the scheme with LIC of India. However, the same has been provided during the year on the basis of an actuarial valuation based on projected unit credit method made after the end of the financial year.

8. IMPAIRMENT OF ASSETS,

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior period(s), if any,, is reversed if there has been a change in the estimate of the recoverable amount.

9. EXCISE DUTY

Excise Duty has been accounted on the basis of both, payments made in respect of goods cleared and also provision made for goods lying in Branches/Factories.

Note : The Valuation of Stocks are inclusive of taxes/duties incurred as required by Section 145A of the Income Tax Act, 1961.

11. STORES & SPARES

The Company has adopted the practice of treating stores & spares purchased during the year as consumed and no account is taken of closing stock.

12. Claims by or against the Company are accounted when acknowledged/ accepted/ settled/ received.

13. Interest on late payments by the customers & to the suppliers and differential interest to the bankers are accounted for on acceptance basis.

14. The bonus is accounted for on accrual basis.

15. The Company has already initiated the process and entitled for subsidy on account of certain revenue and capital nature of expenditures incurred at Samba Unit (Jammu & Kashmir) in earlier years as well as during the year. The same shall be accounted for on cash/acceptance basis as under :

Subsidy of capital nature and related to specific Fixed Assets shall be deducted from the gross value of assets. Subsidy related to revenue shall be recognized in the Profit & Loss Account to match them with related costs.

19. SEGMENT REPORTING

The Company is engaged in the business of Formulation & Manufacture of Pesticides. Segment Revenue, Segment Expenses, Segment Assets & Segment Liabilities have been identified to the segments on the basis of their relationship to the operating activities of the segment. The Revenue, Expenses, Assets & Liabilities which are not allocable to segments, have been included under" Unallocated Revenue, Expenses, Assets & Liabilities."

A. Primary Segment

Based on the following guiding priciples given in the Accounting Standard-17 "Segment Report" issued by The Institute of Chartered Accountants of India, the Companys primary segments are Formulated Pesticides consisting of Pesticides, Herbicides, Fungicides & Plant Growth Regulators and Technical Pesticides, which are the basic active ingredients used for making formulations so that they can be used directly by the Farmers and/or Consumers.

i) The nature of the products.

ii) The related risks and returns.

iii) The internal financial reporting system

Revenue and Expenses have been accounted for based on the basis of their relationship to the operating activities of the segments. Revenue and Expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Expenses". Assets and Liabilities which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have been included under "Unallocable Assets/ Liabilities".

B. Secondary Segment

The Company caters mainly to the needs of the Indian Markets. Export Turnover during the year being less than 10 % of the total turnover, there are no reportable geographical segments.

20. PROVISIONS, CONTINGENT LIABILITIES, CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

21. PROPOSED DIVIDEND

Dividend proposed by the Board of Directors is provided for in the books of account pending approval at the Annual General Meeting.

22. RESEARCH & DEVELOPMENT

Revenue expenditure on Research & Development is recognized as expense in the year in which it is incurred and the expendi- ture on Capital Assets is depreciated on Straight Line Method as per the classification, rates and manner prescribed in Schedule XIV of the Companies Act, 1956 as amended up to date.

23. REVENUE RECOGNITION

Revenue recognition is postponed to a later date, only when it is not possible to estimate it with reasonable accuracy.

 
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