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Accounting Policies of Sadhana Nitro Chem Ltd. Company

Mar 31, 2015

A) Basis of preparation of Financial Statements

The financial statements are prepared in accordance with generally accepted accounting principles in India. The company has prepared these financial statements to comply in all material respects with the accounting standard notified under section 133 of Companies Act, 2013. The financial statements have been prepared on accrual basis and under historical cost convention. The accounting policies adopted in the preparation of financial statement are consistent with those of previous year.

b) Use of Estimates

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

c) Revenue Recognition

Sales of Products are recognized when significant risks and rewards of ownership of products are passed on to customers. Sales are stated at realizable values and are recorded net of excise duty, sales tax and returns.

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

Interest income is recognized on the time proportion method.

d) Fixed Assets

(i) Fixed assets are stated at their original cost including interest, borrowing cost and other expenses directly related to qualifying assets during construction period.

(ii) Cost of fixed assets not ready for their intended use before such date is disclosed under Capital Work in Progress.

(iii) All costs relating to up gradations/ enhancements are generally charged off as revenue expend iture unless they bring significant additional benefits of lasting nature.

(iv) CENVAT Credits on capital goods are recognized in the books when the company becomes eligible to claim the same and are reduced from the cost of respective asset. Depreciation on these assets are calculated on the net amount.

e) Depreciation

(i) Assets individually costingRs. 5,000/-or less are depreciated fully in the year of purchase.

(ii) Depreciation on Leasehold land is overthe primary period of lease.

(iii) Plant and Equipment acquired before 1st April 2006, building including non-factory building, furniture, fixture and vehicle are depreciated under WDV method at rates prescribed in Schedule II of Companies Act, 2013.

(iv) Plant and Equipment acquired after 1st April 2006 and computer are depreciated in accordance with Schedule II of Companies Act, 2013.

(v) Depreciation on EffluentTreatment Plant has been provided @ 100%.

f) Borrowing Cost

The borrowing cost attributed to the acquisition or constructions of qualifying assets are capitalized as a part of cost of such assets. A qualified asset is one that necessarily takes su bstantial period of time to get ready for its intended use. All other borrowing cost are charged to Statement of Profit and Loss.

g) Impairment

Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to Its assets on a pro-rata basis.

h) Investments

Long term investments are stated at cost net of provisions. Investments in shares of foreign subsidiary is expressed in Indian currency at the rate of exchange prevailing at the time when the original investment was made. When market value becomes less than cost, provision is considered only when the diminution is considered as being permanent by the management.

i) Val uation of I nventories

Inventories of Raw Materials, Stores and Spare parts, Packing Material, Fuel, Work-in-progress, Stock in Trade and Finished Goods are stated 'at cost or net realisable value, whichever is lower1. Stock of Scrap and Spent Acid is valued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Stores and Spares are valued on Weighted Average Cost Basis. All other inventories are valued at Cost on 'First-ln-First-Out' Basis. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

j) Foreign Currency Transaction

Foreign currency transactions are recorded by applying the rates on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss for the period.

Ail foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognized in the Statement of Profit and Loss for the year. All non-monetary assets and liabilities are stated at the rates prevailing on the date of the transaction. Exchange difference arising on reporting of long term foreign currency monetary items relating to acquisition of depreciable capital assets at rate different from those at which they were initially recorded in the previous financial statement are being depreciated over the balance life of assets. Exchange difference arising on reporting of all other long term foreign currency monetary items having a term of twelve month or more at the date of origination is amortised over the balance period of such monetary item.

k) Retirement Benefits

(i) Short term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

(ii) Post employment and other long term employee benefit are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services .The expenses is recognized at the present value of amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of employment and other long term benefit are charged to the Statement of Profit and Loss.

l) Research and Development cost:

(i) Revenue expenses on Research and Development are written off to the Statement of Profit and Loss.

(ii) Capital expenditure on Research and Development is shown as addition to fixed assets.

m) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the financial year.

Deferred tax is recognized subject to the consideration of prudence in respect of deferred assets on timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In the event of unabsorbed depreciation and carry forward loses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

n) Provisions

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 a reliable estimate can be made based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management 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 management esti mates.

o) Insurance Claims

Claims receivable are accounted at the time of lodgment depending on virtual certainty of receipt.

p) Earnings Per Share (EPS) Basic EPS

The earnings considered in ascertaining the Company's basic EPS comprise the net profit/(loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Diluted EPS

The net profit/(loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.

None of the Share Holders other than Holding Company holds more than 5% as on the reporting date and previous period.

Reconciliation of Shares outstanding as at the beginning and at the end of the reporting period

The Company has only one class of equity shares having at par value off 10/- per Share. Each holder of equity shares is entilted to one vote per share. The company declares and pays dividend in indian Rupees. The dividend proposed by the Board of Director is subject to the approval of the share holders in the ensuing Annual general meeting. In the event of liquidation of the company, the holder of equity shares will be entitled to receive remaining assets of the company afterdistribution of all preferential amounts. The distribution will be in proportion to number of shares held by share holder.

The Company has only one class of Preference Shares having at par value of Rs.10/- per share. The Preference Shares are Non-Convertible in nature bearing fixed dividend rate of 9%. The Non-Convertible, Cumulative, Redeemable Preference Shares shall be redeemed at the option of the Compay any time after 3 (three) years but not later than 10 (Ten) years from the date of issue & as decided by the Board of Directors in accordance with the terms of the issue and in accordance with the provisions of the Companies Act, 2013, or any re-enactment thereof..


Mar 31, 2014

A) Basis of preparation of Financial Statements

The financial statements are prepared in accordance with generally accepted accounting principles in India. The company has prepared these financial statements to comply in all material respects with the accounting standard notified under the Companies (Accounting Standard) Rules, 2006 issued under sub-section 3C of section 211 of the Companies Act, 1956. The financial statements have been prepared on accrual basis and under historical cost convention. The accounting policies adopted in the preparation of financial statement are consistent with those of previous period.

b) Use of Estimates

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

c) Revenue Recognition

Sales of Products are recognized when significant risks and rewards of ownership of products are passed on to customers. Sales are stated at realizable values and are recorded net of excise duty, sales tax and returns. Dividend Income is recognized when the right to receive dividend is established. Interest income is recognized on the time proportion method.

d) Fixed Assets

(i) Fixed assets are stated at their original cost including interest, borrowing cost and other expenses directly related to qualifying assets during construction period. (ii) Cost of fixed assets not ready for their intended use before such date is disclosed under Capital Work in Progress.

(iii) All costs relating to up gradations/ enhancements are generally charged off as revenue expenditure unless they bring significant additional benefits of lasting nature. (iv) CENVAT Credits on capital goods are recognised in the books when the company becomes eligible to claim the same and are reduced from the cost of respective asset. Depreciation on these assets are calculated on the net amount.

e) Depreciation

(i) Assets individually costing Rs. 5,000/- or less are depreciated fully in the year of purchase.

(ii) Depreciation on Leasehold land is over the primary period of lease.

(iii) Depreciation on Building and Plant and Machinery added upto 30th June, 1986, are charged on straight line method at the rates as mentioned in schedule XIV of the Companies Act, 1956.

(iv) Depreciation on Plant and Machinery and equipments acquired after 1st July, 1986 up to 31st March, 2006 are charged on the written down value method as provided in Schedule XIV to the Companies Act, 1956.

(v) Depreciation on Computers, Factory and Non factory Building, Vehicles acquired after 1st July, 1986 have been calculated on written down method at rates specified under Schedule XIV of Companies Act, 1956.

(vi) Depreciation on Plant & Machinery, equipment and computer acquired after 1st April, 2006 are calculated on straight line method at rate provided under Schedule XIV of Companies Act, 1956.

(vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.

f) Borrowing Cost

The borrowing cost attributed to the acquisition or construction of qualifying assets are capitalized as a part of cost of such assets. A qualified asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing cost are charged to Statement of Profit and Loss.

g) Impairment

Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate.

An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.

h) Investments

Long term investments are stated at cost net of provisions. Investments in shares of foreign subsidiary is expressed in Indian currency at the rate of exchange prevailing at the time when the original investment was made. When market value becomes less than cost, provision is considered only when the diminution is considered as being permanent by the management.

i) Valuation of Inventories

Inventories of Raw Materials, Stores and Spare parts, Packing Material, Fuel, Work-in-progress, Stock in Trade and Finished Goods are stated ''at cost or net realisable value, whichever is lower''. Stock of Scrap and Spent Acid is valued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Stores and Spares are valued on Weighted Average Cost Basis. All other inventories are valued at Cost on ''First-In-First-Out'' Basis. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

j) Foreign Currency Transaction

Foreign currency transactions are recorded by applying the rates on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss for the period.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognized in the Statement of Profit and Loss for the period. All non-monetary assets and liabilities are stated at the rates prevailing on the date of the transaction. Exchange difference arising on reporting of long term foreign currency monetary items relating to acquisition of depreciable capital assets at rate different from those at which they were initially recorded in the previous financial statement are being depreciated over the balance life of assets. Exchange difference arising on reporting of all other long term foreign currency monetary items having a term of twelve months or more at the date of origination is amortised over the balance period of such monetary item.

k) Retirement Benefits

(i) Short term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss for the period in which the related service is rendered.

(ii) Post employment and other long term employee benefit are recognized as an expense in the Statement of Profit and Loss for the period in which the employee has rendered services. The expenses is recognized at the present value of amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of employment and other long term benefits are charged to the Statement of Profit and Loss.

l) Research and Development cost

(i) Revenue expenses on Research and Development are written off to the Statement of Profit and Loss.

(ii) Capital expenditure on Research and Development is shown as addition to fixed assets.

m) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the financial period. Deferred tax is recognized subject to the consideration of prudence in respect of deferred assets on timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In the event of unabsorbed depreciation and carry forward loses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

n) Provisions

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 a reliable estimate can be made based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management 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 management estimates.

o) Insurance Claims

Claims receivable are accounted at the time of lodgment depending on virtual certainty of receipt.

p) Earnings Per Share (EPS) Basic EPS

The earnings considered in ascertaining the Company''s basic EPS comprise the net profit/(loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Diluted EPS

The net profit/(loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.

Rights, preferences and restrictions attached to each class of shares.

The company has only one class of equity share having at par value of Rs. 10/- per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the share holders in the ensuing Annual General Meeting. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to number of shares held by the share holder. The company has only one class of Preference shares having at par value of Rs. 10/- per Share. The Preference shares are non-convertible in nature bearing fixed dividend rate of 9%. The non-convertible, cumulative, redemable preference shares shall be redeemed at the option of the compay any time after 3 (three) years but not later than 10 (Ten ) years from the date of issue as decided by the Board of Director in accordance with the term of the issue and in accordance with the provision of the Companies Act, 1956, or any re-enactment thereof.


Jun 30, 2013

A) Basis of preparation of Financial Statements

The financil statements are prepared in accordance with generally accepted accounting principles in india .The company has prepared these financial statement to comply in all material respects with the accounting standard notified under the companies (Accounting Standard) Rules,2006 issued under sub-section3C of section 211 of CompaniesAct,1956. The financial statement have been prepared on an accrual basis and under historical cost convention. The accounting policies adopted in the preparation of financial statement are consistent with those of previous year.

b) Use of Estimates

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

c) Revenue Recognition

(i) Sales of Products are recognized when significant risks and rewards of ownership of products are passed on to customers. Sales are stated at realizable values, and are recorded net of excise duty recovery, sales tax and returns.

(ii) Dividend Income is recognized when the right to receive dividend is established.

(iii) Interest income is recognized on the time proportion method.

d) Fixed Assets

i) Fixed assets are stated at their original cost including interest, borrowing cost and other expenses directly related to qualifying assets during construction period.

ii) Cost of fixed assets not ready for their intended use before such date is disclosed under Capital Work in Progress.

iii) All costs relating to up gradations/enhancements are generally charged off as revenue expenditure unless they bring significant additional benefits of lasting nature.

iv) CENVAT Credits on capital goods are recognised in the books when the company becomes eligible to claim the same and are reduced from the cost of respective asset. Depreciation on these assets are calculated on the net amount.

e) Depreciation

i) Assets individually costing Rs 5,000/-or less are depreciated fully in the year of purchase

ii) Depreciation on Leasehold land is over the primary period of lease.

iii) Depreciation on Building and Plant and Machinery added upto 30th June 1986, are charged on straight line method at the rates as mentioned in schedule XIV of the Companies Act,1956.

iv) Depreciation on Plant and Machinery and equipments acquired after 1s''July, 1986 upto 31st March, 2006 are charged on the written down value method as provided in Schedule XIV to the Companies Act, 1956.

v) Depreciation on Computers, Factory and Non factory Building, Vehicles acquired after 1st July, 1986 have been calculated on written down method at rates specified under Schedule XIV of Companies Act, 1956.

vi) Depreciation on Plant & Machinery .equipment and computer acquired after 1st April 2006 are calculated on straight line method at rate provided under Schedule XIV of Companies Act. 1956.

vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.

f) Borrowing Cost

The borrowing cost attributed to the acquisition or construction of qualifying assets are capitalized as a part of cost of such assets. A qualified assets is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing cost are charge to Profit & Loss Account.

g) Impairment

Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss / reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorate basis.

h) Investments

Long term investments are stated at cost net of provisions. Investments in shares of foreign subsidiary is expressed in Indian currency at the rate of exchange prevailing at the time when the original investment was made. When market value becomes less than cost, provision is considered only when the diminution is considered as being permanent by the management.

i) Valuation of Inventories

Inventories of Raw Materials, Stores and Spare parts, Packing Material, Fuel, Goods-in-progress and Finished Goods are stated ''at cost or net realisable value, whichever is lower''. Stock of Scrap and Spent Acid is valued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used are ''First-In-First-Out''or Weight Average cost'' as applicable. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

j) Foreign Currency Transaction

Foreign currency transactions are recorded by applying the rates on the date of transaction. Exchange differences arising on foreign currency transactions settled during the Period are recognized in the profit and loss account for the Period.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognized in the profit and loss account for the Period. All non-monetary assets and liabilities are stated at the rates prevailing on the date of the transaction. Exchange difference arising on reporting of long term foreign currency monitory items relating to acquisition of depreciable capital assets at rate different from those at which they were initially recorded in the previous financial statement are being depreciated over the balance life of assets. Exchange difference arising on reporting of all other long term foreign currency monetary items having a term of twelve month or more at the date of origination is amortised over the balance period of such monetary item.

k) Retirement Benefits

i) Short term employee benefit are recognized as an expenses at the undiscounted amount in the profit and loss account for the Period in which the related service rendered. ii) Post employment and other long term employee benefit are recognized as an expense in the profit & loss account for the Period in which the employee has rendered services. The expenses is recognized at the present value of amount payable determined using actuarial valuation techniques .Actuarial gains and losses in respect of employment and other long term benefit are charged to the profit and loss account.

I) Research and Development cost

i) Revenue expenses on Research and Development are written off to the Profit and Loss Account. ii) Capital expenditure on Research and Development is shown as addition to fixed assets.

m) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the assessment year. Deferred tax is recognized subject to the consideration of prudence in respect of deferred assets on timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In the event of unabsorbed depreciation and carry forward loses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

n) Provisions

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 a reliable estimate can be made based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management 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 management estimates.

o) Insurance Claims

Claims receivable are accounted at the time of lodgment depending on virtual certainty of receipt.

p) Earnings Per Share (EPS) Basic EPS

The earnings considered in ascertaining the Company''s basic EPS comprise the net profit/(loss) aftertax and after deducting preference dividend on cumulative preference shares. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. Diluted EPS

The net profit/(loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.


Mar 31, 2012

A) Basic of preparation of Financial Statements

The financial statements are prepared in accordance with generally accepted accounting principles in India. The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standard) Rules, 2006 issued under sub-section 3C of section 211 of Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. During the financial year ended March, 2012, the revised schedule VI notified under the Companies Act, 1956 has become applicable to the company for preparation and presentation of its financial statements. The company has also re-classified the previous year figures in accordance with the requirements applicable in current year.

b) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognised in the period in which the results are known/ materialised.

c) Revenue Recognition

i) Sales of Products are recognized when significant risks and rewards of ownership of products are passed on to customers. Sales are stated at realizable values and include exchange differences, and are recorded net of excise duty recovery, sales tax and returns.

ii) Dividend Income is recognized when the right to receive dividend is established.

iii) Interest income and expense is recognized on time proportion method.

d) Fixed Assets

i) Fixed assets are stated at their original cost including interest, borrowing cost and other expenses directly related to qualifying assets during construction period.

ii) Cost of fixed assets not ready for their intended use before such date are disclosed under Capital Work in Progress.

iii) All costs relating to up gradations/ enhancements are generally charged off as revenue expenditure unless they bring significant additional benefits of lasting nature.

iv) CENVAT Credits on capital goods are recognised in the books when the company becomes eligible to claim the same and are reduced from the cost of respective asset. Depreciation on these assets are calculated on the net amount.

e) Depreciation

i) Assets individually costing Rs 5,000/- or less are depreciated fully in the year of purchase

ii) Leasehold land depreciated over the primary period of lease.

iii) Depreciation on assets added upto 30th June 1986, are charged on straight line method at the rates as mentioned in Schedule XIV of Companies Act 1956.

iv) Depreciation on Plant and Machinery, equipments and computers acquired after 1st July, 1986 up to 31 "March, 2006 are charged on the written down value method as provided in Schedule XIV to the Companies Act, 1956.

v) Depreciation on Factory and Non factory Building, Vehicles and furniture fixtures acquired after 1st July, 1986 have been calculated on written down method at rates specified under Schedule XIV of Companies Act, 1956.

vi) Depreciation on Plant & Machinery, equipment and computers acquired after 1st April, 2006 are calculated on straight line method at rates provided under Schedule XIV of Companies Act, 1956.

vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.

f) Borrowing Cost .

The Borrowing Cost attributed to the acquisition or construction of qualifying assets are capitalized as a part of cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss Account.

g) Impairment

Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss / reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorate basis.

h) Investments

Long term investments are stated at cost net of provisions. Investments in shares of foreign subsidies are expressed in Indian currency at the rate of exchange prevailing at the time when the original investment was made. When market value of long term investments becomes less than cost, provision is considered only when the diminution is considered as being permanent by the management.

i) Valuation of Inventories

Inventories of Raw Materials, Stores and Spare parts, Packing Material, Fuel, Goods-in-progress and Finished Goods are stated 'at cost or net realisable value, whichever is lower'. Stock of Scrap and Spent Acid is valued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used are 'First-ln-First-Out' or 'Average cost' as applicable. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company, j) Foreign Currency Transaction

Foreign currency transactions are recorded by applying the rates on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the profit and loss account for the year. All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognised in the profit and loss account for the year. All non-monetary assets and liabilities are stated at the rates prevailing on the date of the transaction. Exchange difference arising on reporting of long term foreign currency monitory items relating to acquisition of depreciable capital assets at rates different from those at which they were initially recorded in the previous financial statements are being depreciated over the balance life of the asset. Exchange difference arising on reporting of all other long term foreign currency monetary items having a term of twelve months or more at the date of origination is amortised overthe balance period of such monetary item, k) Retirement Benefits

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

ii) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognized at the present

* valye of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

I) Research and Development cost

i) Revenue expenses on Research and Development are written off to the Profit and Loss Account.

ii) Capital expenditure on Research and Development is shown as addition to fixed assets,

m) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Deferred tax is recognised subject to the consideration of prudence in respect of deferred assets on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In the event of unabsorbed depreciation and carry forward loses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient taxable income will be available to realize such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets,

n) Provisions

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 a reliable estimate can be made based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management 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 management estimates.

o) Insurance Claims

Claims receivable are accounted at the time of lodgment depending on virtual certainty of receipt,

p) Earnings Per Share (EPS)

Basic EPS

The earnings considered in ascertaining the Company's basic EPS comprise the net profit/(loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. Diluted EPS

The net profit/(loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.


Mar 31, 2011

1) Basis of preparation of Financial Statements

The Accounts have been prepared on historical cost basis and as a going concern complying in all material aspects with applicable accounting principles in India, the notified Accounting Standards of the Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act, 1956.

2) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognised in the period in which the results are known/ materialised.

3) Revenue Recognition

i) Sales of Products are recognized when significant risks and rewards of ownership of products are passed on to customers. Sales are stated at realizable values and include exchange differences, and are recorded net of excise duty recovery, sales tax and returns.

ii) Dividend Income is recognized when the right to receive dividend is established.

iii) Interest income and expense is recognized on time proportion method.

4) Fixed Assets

i) Fixed assets are stated at their original cost including interest, borrowing cost and other expenses directly related to qualifying assets during construction period.

ii) Cost of fixed assets not ready for their intended use before such date are disclosed under Capital Work in Progress.

iii) All costs relating to up gradations/ enhancements are generally charged off as revenue expenditure unless they bring significant additional benefits of lasting nature.

iv) CENVAT Credits on capital goods are recognised in the books when the company becomes eligible to claim the same and are reduced from the cost of respective asset. Depreciation on these assets are calculated on the net amount.

5) Depreciation

i) Assets individually costing Rs. 5,000/- or less are depreciated fully in the year of purchase

ii) Leasehold land depreciated over the primary period of lease.

iii) Depreciation on assets added upto 30th June 1986, are charged on straight line method at the rates as mentioned in Schedule XIV of Companies Act 1956.

iv) Depreciation on Plant and Machinery, equipments and computers acquired after 1st July, 1986 up to 31st March, 2006 are charged on the written down value method as provided in Schedule XIV to the Companies Act, 1956.

v) Depreciation on Factory and Non factory Building, Vehicles and furniture fixtures acquired after 1st July, 1986 have been calculated on written down method at rates specified under Schedule XIV of Companies Act, 1956.

vi) Depreciation on Plant & Machinery, equipment and computers acquired after 1st April, 2006 are calculated on straight line method at rates provided under Schedule XIV of Companies Act, 1956.

vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.

6) Borrowing Cost

The Borrowing Cost attributed to the acquisition or construction of qualifying assets are capitalized as a part of cost of such assets. Aqualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & LossAccount.

7) Impairment

Fixed assets are reviewed at each balance sheet date for impairment, in case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss / reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorate basis.

8) Investments

Long term investments are stated at cost net of provisions. Investments in shares of foreign subsidies are expressed in Indian currency at the rate of exchange prevailing at the time when the original investment was made. When market value of long term investments becomes less than cost, provision is considered only when the diminution is considered as being permanent by the management.

9) Valuation of Inventories

Inventories of Raw Materials, Stores and Spare parts, Packing Material, Fuel, Goods-in-progress and Finished Goods are stated 'at cost or net realisable value, whichever is lower'. Stock of Scrap and Spent Acid is valued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used are 'First-In-First-Out' or 'Average cost' as applicable. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

10) Foreign Currency Transaction

Foreign currency transactions are recorded by applying the rates on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognised in the profit and loss account for the year.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognised in the profit and loss account for the year.AII non-monetary assets and liabilities are stated at the rates prevailing on the date of the transaction.

11) Retirement Benefits

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

ii) Post employment and other long term employee benefits are recognized as an expense in the profit and loss account 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 losses in respect of post employment and other long term benefits are charged to the profit and Loss account.

12) Research and Development cost

i) Revenue expenses on Research and Development are written off to the Profit and Loss Account.

ii) Capital expenditure on Research and Development is shown as addition to fixed assets.

13) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognised subject to the consideration of prudence in respect of deferred assets on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In the event of unabsorbed depreciation and carry forward loses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient taxable income will bo available to realize such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

14) Provisions

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 a reliable estimate can be made based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management 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 management estimates.

15) Insurance Claims

Claims receivable are accounted at the time of lodgment depending on virtual certainty of receipt.

16) Earnings Per Share (EPS) Basic EPS

The earnings considered in ascertaining the Company's basic EPS comprise the net profit/(loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. Diluted EPS

The net profit/(loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.


Mar 31, 2010

1) Basis of preparation of Financial Statements

The Accounts have been prepared on historical cost basis and as a going concern complying in all material aspects with applicable accounting principles in India, the notified Accounting Standards of the Companies Accounting Standard Rules, 2006 and the relevant provisions of the Companies Act, 1956.

2) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognised in the period in which the results are known/ materialised.

3) Revenue Recognition

i) Sales of Products are recognized when significant risks and rewards of ownership of products are passed on to customers. Sales are stated at realizable values and include exchange differences, and are recorded net of excise duty recovery, sales tax and returns.

ii) Dividend Income is recognized when the right to receive dividend is established.

lii) Interest income and expense is recognized on time proportion method.

4) Fixed Assets

i) Fixed assets are stated at their original cost including interest, borrowing cost and other expenses directly related to qualifying assets during construction period.

ii) Cost of fixed assets not ready for their intended use before such date are disclosed under Capital Work in Progress.

iii) All costs relating to up gradations/ enhancements are generally charged off as revenue expenditure unless they bring significant additional benefits of lasting nature.

iv) CENVAT Credits on capital goods are recognised in the books when the company becomes eligible to claim the same and are reduced from the cost of respective asset. Depreciation on these assets are calculated on the net amount.

5) Depreciation

i) Assets individually costing Rs 5,000/- or less are depreciated fully in the year of purchase.

ii) Depreciation on Leasehold land is written off over the primary period of lease.

iii) Depreciation on assets added upto 30th June, 1986, are charged on straight line method at the rates specified in Schedule XIV of Companies Act 1956.

iv) Depreciation on Plant and Machinery, equipments and computers acquired after 1st July, 1986 up to 31st March, 2006 are charged on the written down value method specified in Schedule XIV to the Companies Act, 1956.

v) Depreciation on Factory and Non factory Building, Vehicles and furniture fixtures acquired after 1st July, 1986 have been calculated on written down method at rates specified in Schedule XIV of Companies Act, 1956.

vi) Depreciation on Plant & Machinery, equipment and computers acquired after 1st April, 2006 are calculated on straight line method at rates specified in Schedule XIV of Companies Act, 1956.

vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.

6) Impairment

Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use.

In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss / reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorate basis.

7) Investments

Long term investments are stated at cost net of provisions. Investments in shares of foreign subsidies are expressed in Indian currency at the rate of exchange prevailing at the time when the original investment was made. When market value of long term investments becomes less than cost, provision is considered only when the diminution is considered as being permanent by the management.

8) Valuation of Inventories

Inventories of Raw Materials, Stores and Spare parts, Packing Material, Fuel, Goods-in-progress and Finished Goods are stated at cost or net realisable value, whichever is lower. Stock of Scrap and Spent Acid is vaiued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost formulae used is First-In-First-Out or Average cosf as applicable. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company.

9) Foreign Currency Transaction

Foreign currency transactions are recorded by applying the rates on the date of transaction. Exchange differences arising on foreign currency transactions settled during the ysar are recognised in the profit and loss account of the year.

All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognised in the profit and loss account of the year. All non-monetary assets and liabilities art stated at the rates prevailing on the date of the transaction.

The premium or discount on forward exchange contracts is recognized in the profit and loss account over the period of the contract.

For forward exchange contracts and other derivatives that are not covered by A3-11, the Company follows the guidance in the Announcement of the ICAI dated 29th March, 2008 whereby for each category of derivatives, the Company records mark-to-market iosses.

10) Retirement Benefits

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered,

ii) Post employment and other long term jriployee benefits are recognized as an expense in the profit and loss account 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 losses in respect of post employment and other long term benefits are charged to the profit and loss account.

11) Research and Development cost

i) Revenue expenses on Research and Development ara written off to the Profit and Loss Account.

ii) Capital expenditure on Research and Development is shown as addition to fixed assets.

12) Taxation

Current tax is determined as the amount of tax payable in respect of taxable income for the year.

Deferred tax is recognised subject to the consideration ot prudence in respect of deferred assets on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subssquent periods, in the event of unabsorbed depreciation and carry forward loses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient taxable income will be available to reailza such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

13) Provisions

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 a reliable estimate can be r ade based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management 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 management estimates.

14) Insurance Claims

Claims receivable are accounted at the time of lodgment depending on virtual certainty of receipt.

15) Earnings Per Share (EPS) Basic EPS

The earnings considered in ascertaining the Companys basic EPS comprise the net profit/(loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. Diluted EPS

The net profit/(loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.

 
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