Accounting Policies of Amines & Plasticizers Ltd. Company
Mar 31, 2023
NOTE 1 - CORPORATE INFORMATION
Indo Amines Limited ( the Company) is public limited Company domiciled and incorporated in India under the Indian Companies Act,1956. The registered office of the Company is located at, W-44, Phase II, MIDC, Dombivali (E), Dist. Thane - 421204.
The Company is engaged in the Business of manufacturing, selling and distribution of Specialty Chemical with diversified end-user into Agrochemicals, Pharmaceuticals, High performance Polymers, Paints, Pigments, Printing Inks, Rubber Chemicals etc.
The Company''s shares are listed on recognized stock exchanges of India.
The Standalone financial statements for the year ended 31st March 2023 are authorized and approved for the issue by the Board of Directors.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIESA. Basis of Accounting:
These Financial statements are the separate financial statements of the Company ( also called standalone financial statements) prepared in accordance with Indian Accounting standards ( Ind AS), notified under Section 133 of the Companies Act, 2013, read together with the Companies ( Indian Accounting Standard) Rules, 2015.
The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.
Defined benefit plans assets are measured at fair value.
Functional and Presentation Currency
The financial statements are presented in Indian Rupees (''INR'') which is the functional currency for company.
All amounts disclosed in the financial statements and notes have been rounded off to nearest lakhs ( INR 00,000) except otherwise stated.
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which these are materialized.
C. Current/Non Current Classification:
The assets and liabilities in the balance sheet are presented based on current / non- current classification.
An asset is current when it is:
⢠Expected to be realized or intended to be sold or consumed in normal operating cycle or
⢠Held primarily for the purpose of trading or
⢠Expected to be realised within twelve months after reporting period, or
⢠Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
An liability is current when it is:
⢠Expected to be settled in normal operating cycle or
⢠Held primarily for the purpose of trading or
⢠Due to be settled within twelve months after reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are treated as non -current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
All assets and liabilities have been classified as current or non-current as per Company''s normal operating cycle and other criteria set out in schedule III to the Companies Act., 2013. Based on the nature of products and time between acquisition of asset for processing and their realization in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities.
Inventories are stated at lower of cost and net realizable value. The cost of inventories are arrived at as follows:
Raw Materials, Packing Material & fuel :- Valued on FIFO basis.
Work In Progress :- At Raw Material Cost plus appropriate allocation of overheads
Finished Goods :- At Raw Material Cost plus appropriate allocation of overheads or net realisable value whicherver is lower Traded Finished Goods :- At lower of Cost or net realizable value.
Depreciation on Property , Plant & Equipment is provided on Straight Line method considering the useful life of assets as specified in Scheduled II to the Companies Act ,2013.
F. Property, Plant and Equipment: ( Ind AS 16)
Items of Property, plant and equipment are carried at historical value less accumulated depreciation and amortisation. Cost of acquisition is net off recoverable taxes but is inclusive of all expenditure attributable to bringing the asset to its working condition.
Freehold land is carried at cost of acquisition.
Leasehold land is amortised over the period of lease.
Property, plant and equipment acquired in a business combination are recognised at fair value at the acquisition date.
G. Intangible Assets:Measurement at recognition:
Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets arising on acquisition of business combination are measured at fair value as at date of acquisition. Internally generated intangibles including research cost are not capitalized and the related expenditure is recognized in the Statement of Profit and Loss in the period in which the expenditure is incurred. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
The Company had elected to consider the carrying value of all its intangible assets appearing in the Financial Statements prepared in accordance with Accounting Standards notified under the section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 and used the same as deemed cost in the opening Ind AS Balance Sheet prepared on 1st April, 2015.
Amortization: Intangible Assets with finite lives are amortized on a Straight Line basis over the estimated useful economic life. The amortization expense on intangible assets with finite lives is recognized in the Statement of Profit and Loss. The estimated useful life of intangible assets is mentioned below:
|
Particulars |
Years |
|
Computer & computer Software |
3 |
|
Licenses |
5 |
The amortization period and the amortization method for an intangible asset with finite useful life is reviewed at the end of each financial year. If any of these expectations differ from previous estimates, such change is accounted for as a change in an accounting estimate.
Derecognition: The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the Derecognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the Statement of Profit and Loss when the asset is derecognized.
Goodwill is initially recognised based on the accounting policy for business combinations and is tested for impairment annually. Goodwill is tested for impairment at the end of each reporting period and whenever there is an indication that the recoverable amount of cash generating unit (CGU) is less than its carrying amount based on a number of factors including operating results, business plans, future cash flows and economic conditions, provision for such shortfall is made. The recoverable amount of CGU is determined based on higher of value-in-use and fair value less cost to sell. In addition to that Goodwill is amortised over a period of 5 years as per policy consistently followed by Company.
H. Revenue recognition (IND AS 115)
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts and schemes offered by the Company as part of the contract.
When the property and all significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding recoverability of the consideration that revenue from the sale of goods is recognised.
Interest income is considered as income on a time proportion basis taking into account the outstanding principal and the relative rate of interest.
Dividend income is considered as income from investments in shares on establishment of the Company''s right to receive.
I. Foreign exchange transactions (IND AS 21)
I. The functional currency and presentation currency of the company is Indian Rupees.
II. Transactions in currencies other than the company''s functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non- monetary items that are measured in terms of historical cost in foreign currency are not translated. Exchange Differences that arise in settlement of monetary items or on reporting of monetary item at each Balance Sheet date at the closing spot rate are recognized in profit or loss in the period in which they arise.
J. Government Grants and Subsidies (IND AS 20)
i. Government grants and subsidies are recognized when there is reasonable assurance that the conditions attached to them will be complied and grant/subsidy will be received.
ii. Where the Government grant/subsidies relates to revenue, it is recognized as income on a systematic basis in the statement of profit & loss of the period in which the right to receive such grant/ subsidy is established. Government grants and subsidies receivable against an expense are deducted from such expense. The governemnt grants have been accounted on accrual basis every year and is forming a part of other income.
Long term Investments are carried at cost including related expenses, Provision for diminution being made, if necessary, to recognize a decline, other than temporary, in the value thereof.
Current investments are valued at lower of cost or fair value.
L. Employee benefits -(Ind As 19)Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
I. Defined contribution plans:
Defined contribution plans are employee state insurance scheme and Government administered pension fund scheme for all applicable employees.
Contribution to Defined contribution plan namely employer''s contribution to Provident fund & Pension Plan is charged to Profit and Loss Account
II. Defined benefit plans:
The Employees gratuity fund scheme managed by Life Insurance Corporation of India is defined benefit plan. The present value of obligation is determined on the basis of Actuarial Valuation & it is fully provided for.
The cost of providing defined benefits is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan. All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability (asset) are recognized in
the Statement of Profit and Loss. Remeasurements of the net defined benefit liability (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability / asset), are recognized in Other Comprehensive Income. Such remeasurements are not reclassified to the Statement of Profit and Loss in the subsequent periods. The Company presents the above liability/ (asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary;
The Company presents the above liability/ (asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary;
Actuarial Gain / (Loss) : The remeasurement gain /(loss) on net defined benefit plan is recognised in Other Comprehensive Income.
M. Borrowing Costs (IND AS 23)
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are added to the cost of those assets until such time as the assets are substantially ready for their intended use.
All other borrowing costs are recognized in Statement of Profit & Loss in the period in which they are incurred.
N. Earning Per Share(IND AS 33)
Basic and diluted earning per share are computed in accordance with Ind AS 33.
Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
Diluted earnings per share is calculated as follows:-
The net profit attributable to equity shareholders and the weighted average of number of shares outstanding are adjusted for the effect of all dilutive potential equity shares from the exercise of options on unissued share capital. The number of equity shares is the aggregate of the weighted average number of equity shares and the weighted average number of equity shares which would be issued on the conversion of all the dilutive potential equity shares into equity shares.
Research and Development expenditure on revenue account is charged to profit & loss account under the relevant heads of account in the year in which it is incurred.
P. Provisions, Contingent Liabilities and Contingent Asset:- (IND AS 37)Provisions
A provision is recognized, when the company has a present obligation ( legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reasonable estimate can be made of the amount of the obligation. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
A Contigent Asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurance or non occurance of one or more uncertain future events not wholly within the control of the entity.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
A Contigent Asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurance or non occurance of one or more uncertain future events not wholly within the control of the entity.
Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
Q. Segment Reporting (IND AS 108)
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segment of the Company.
R. Investment in Subsidiary Companies(IND AS 27)
The Company has elected to recognize its investment in subsidiary companies at historical cost in accordance with the option available in Ind As 27, ''Separate Financial statement''.
"Income tax expense for the year comprises of net of current tax expenses and deferred tax expenses/income. Current and deferred
taxes are recognized in Statement of Profit & Loss., except when they relate to items that are recognized in other Comprehensive Income or Directly in equity , in which case , the current and deferred tax are also recognized in Other Comprehensive Income or directly in equity respectively.
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income tax Act,1961.
Deferred tax is recognized using the Balance sheet approach on timing differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred Tax adjustments are recognised in the statement of Profit & loss for the year.
T. Risk Analysis :Commodity Price risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the on going purchase or continuous supply of raw commodities. Therefore the company monitors its purchases closely to optimize the price.
Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. Trade Receivables
All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTP L), transaction costs that are attributable to the acquisition of the financial asset.However, trade receivables that do not contain a significant financing component are measured at transaction price.
The company has very minimum exposure to interest rate risk due to its Fixed interest rate of Major borrowings.
Liquidity risk is the risk that the company will not be able to meet is financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the company''s reputation.
The Company''s foreign exchange risk arises from its foreign operations, foreign currency revenue and expenses. The company uses forward contract to mitigate the risk of fluctuation in foreign exchange rates in respect of highly probable forecasted transactions and are recognized as assets and liabilities.
U. Expected Credit Loss (ECL) (IND AS 109)
The Company has a Policy of calculating the provisions using its own historical trends and the nature of its receivables & do impairment testing every year for those receivable which are due for a substantial period . Considering the historical trends and market information, the Company estimates that the provision amount computed on its trade receiveables is not materially different from the amount to be computed using Expected Credit Loss (ECL) method presribed under Ind As 109.
The Company recognize a financial assets in its Balance sheet when it becomes the party to the contractual provisions of the instrument.
Impairment Assets that have an indefinite useful life, for example goodwill, are not subject to amortization and are tested for impairment annually and whenever there is an indication that the asset may be impaired.
Assets that are subject to depreciation and amortization and assets representing investments in subsidiary and associate companies are reviewed for impairment, whenever events or changes in circumstances indicate that carrying amount may not be recoverable. Such circumstances include, though are not limited to, significant or sustained decline in revenues or earnings and material adverse changes in the economic environment.
An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. To calculate value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and the risk specific to the asset. For an asset that does not generate largely independent cash inflows, the
recoverable amount is determined for the CGU to which the asset belongs. Fair value less cost to sell is the best estimate of the amount obtainable from the sale of an asset in an arm''s length transaction between knowledgeable, willing parties, less the cost of disposal.
Impairment losses, if any, are recognized in the Statement of Profit and Loss and included in depreciation and amortization expense. Impairment losses, on assets other than goodwill are reversed in the Statement of Profit and Loss only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognized
Business combinations are accounted for using the acquisition method. At the acquisition date, identifiable assets acquired and liabilities assumed are measured at fair value. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition date fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. The consideration transferred is measured at fair value at acquisition date and includes the fair value of any contingent consideration. However, deferred tax asset or liability and any liability or asset relating to employee benefit arrangements arising from a business combination are measured and recognized in accordance with the requirements of Ind AS 12, Income Taxes and Ind AS 19, Employee Benefits, respectively. Where the consideration transferred exceeds the fair value of the net identifiable assets acquired and liabilities assumed, the excess is recorded as goodwill. Alternatively, in case of a bargain purchase wherein the consideration transferred is lower than the fair value of the net identifiable assets acquired and liabilities assumed, the Company after assessing fair value of all identified assets and liabilities, record the difference as a gain in other comprehensive income and accumulate the gain in equity as capital reserve. The costs of acquisition excluding those relating to issue of equity or debt securities are charged to the Statement of Profit and Loss in the period in which they are incurred.
Mar 31, 2018
Note : 1 SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation of Financial Statements Compliance with Ind As
The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules 2015 with effect from 1st April 2016. The Adoption of the IND AS was carried out in accordance with the IND AS 101 First Time adoption of the Indian Accounting Standards. Accordingly, Companyâs opening Ind AS Balance Sheet date of transition is 1st April 2016. Please refer to Note No 44 for more information on reconciliations of differences and descriptions of the effect of transition.
Accordingly, financial statements of the Company with effect from 1st April 2017 have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015, the provisions of Companies Act 2013, and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
Historical Cost Convention
The financial statements of the company are prepared under the historical cost convention on accrual basis except for the followings assets and liabilities which have been measured at their fair value: -
V Certain financial assets and liabilities that are measured at fair value (refer-Accounting policy regarding financials instruments)
V Defined benefit plans - present value of defined benefit obligation unless otherwise indicated.
b. Use of estimates and judgements
The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Although these estimates are based on the managementâs best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities prospectively. Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following notes :
i. Measurement of defined benefit obligations - Note No. 37
ii. Measurement and likelihood of occurrence of provisions and contingencies - Note No. 17, 22A & 31
iii. Recognition of deferred tax assets / liabilities - Note No. 18B
c. Recent accounting developments
i. Ind AS 115, Revenue from Contracts with Customers - In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 (âamended rulesâ). As per the amended rules, Ind AS 115 âRevenue from contracts with customersâ supersedes Ind AS 11, âConstruction contractsâ and Ind AS 18, âRevenueâ and is applicable for all accounting periods commencing on or after 1 April 2018. Ind AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies that revenue should be recognized when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers. The new revenue standard is applicable to the Company from 1 April 2018. The standard permits two possible methods of transition :
a) Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.
b) Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach).The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 115 is expected to be insignificantâ
ii. Appendix B to Ind AS 21, Foreign currency transactions and advance consideration-
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from 1 April 2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 21 is expected to be insignificant.
d. Property, Plant & Equipmenzt & Intangible Assets :
i. Property, Plant & Equipment
An item of Property, plant and equipment is recognized as an asset if it is probable that future economic benefits associated with the item will flow to the Company and its cost can be measured reliably. property, plant and equipment are initially recognized at cost after deducting refundable purchase taxes and including the cost directly attributable to bring the asset to the location and conditions necessary for it to be capable of operating in the manner intended by the management, borrowing cost in accordance with the established accounting policy, cost of restoring and dismantling, if any, initially estimated by the management. Freehold Land is carried at historical cost. All Other items of Property, Plant & Equipment are stated at historical cost less depreciation. Historical Cost includes expenditure that is directly attributable to the acquisition of the items. After the initial recognition the property, plant and equipment are carried at cost less accumulated depreciation and impairment losses.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when and the cost of the item.
All other repairs and maintenance costs, including regular servicing are recognized in the Statement of Profit and Loss as incurred.
In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of overheads, directly attributable borrowing costs. Cost of Self-constructed assets is determined using the same principles as for acquired assets after eliminating the component of internal profits.
Any gain or loss arising on retirement or disposal of property, plant and equipment is recognized in the Statement of Profit and Loss.
Capital work-in-progress assets in the course of construction for production or/and supply of goods or services or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. At the point when an asset is operating at managementâs intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are capitalised where the asset is available for use but incapable of operating at normal levels until a period of commissioning has been completed.
Upon first-time adoption of Ind AS, the Company has elected to measure all its property, plant and equipment at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2016.
ii. Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortization / depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Upon first-time adoption of Ind AS, the Company has elected to measure all its property, plant and equipment at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2016
iii. Depreciation/ Amortization
Depreciation on all property, plant and equipment are provided for, from the date of put to use for commercial production on a pro-rata basis on the straight-line method based on at the useful life prescribed under Schedule II to the Companies Act, 2013. Freehold land is not depreciated.
Depreciation commences when the assets are ready for their intended use. Depreciated assets in property and accumulated depreciation accounts are retained fully until they are removed from service.
The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end and adjusted prospectively, if appropriate.
Intangible assets with a finite useful life are amortised in a straight-line basis over their estimated useful life
e. Disposal of Assets
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between net disposal proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss.
f. Leases
Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Where the Company has substantially acquired all risks and rewards of ownership of the assets, leases are classified as financial lease. Such assets are capitalized at the inception of the lease, at the lower of the fair value or present value of minimum lease payment and liability is created for equivalent amount. Each lease payment is allocated between liability and finance cost so as to obtain constant periodic rate of interest on the outstanding liability for each year. Finance expenses are recognised immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized. Contingent rentals are recognised as expenses in the periods in which they are incurred.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments/receivable are recognised as an expense/income in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
g. Impairment
The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called cash generating units (CGU) may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, assetâs carrying amount exceeds its recoverable amount. The recoverable amount is higher of an assetâs fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
h. Research and development expenditure
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are charged to the Statement of Profit and Loss unless a productâs technological and commercial feasibility has been established, in which case such expenditure is capitalised.
i. Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily takes substantial period of time to get ready for their its intended use or sale, are capitalised as part of the cost of such assets, until such time as the assets are substantially ready for the intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is recognized in the Statement of Profit and Loss.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
j. Inventories
Inventories are stated at the lower of cost and net realizable value. The cost of finished goods and work in progress includes raw materials, direct labour, other direct costs and related production overheads.
Raw Materials and other materials including packaging, stores and fuels are valued at lower of cost, based on first-in-first- out method arrived at after including freight inward and other expenditure directly attributable to acquisition or net realizable value. Cost of Stores, Spares and fuels are computed on Moving Weighted Average.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
k. Financial Instruments I. Financial assets
a. Initial Recognition and Measurement
The Company recognizes financial assets and financial liabilities when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are recognised at fair value initial recognition except for Trade receivables / payables and where cost of generation or fair value exceeds benefits, which are initially measured at the transaction price. Transaction costs directly related to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities through profit and loss account) are added to or deducted from the cost of financial assets and financial liabilities. Transaction costs directly attributable to the acquisition or issue of the financial assets and financial liabilities at fair value through profit and loss account are recognized immediately in the statement of profit and loss.
b. Classification and Subsequent Measurement
i. Amortised cost :
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
ii. Fair value through other comprehensive income (FVOCI) :
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
iii. Fair value through profit and loss (FVTPL) :
A financial asset which is not classified in any of the above categories are measured at FVTPL.
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
iv. Investments in Subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries and joint ventures at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1st April,2016.
v. Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
All equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in âOther Comprehensive Incomeâ.
vi. Cash and Bank Balances
Cash and cash equivalents - which includes cash in hand, deposits at call with banks and other shortterm deposits which are readily convertible into cash and which are subject to an insignificant risk of changes in value and have maturities of less than one year from the date of such deposits.
Other Bank Balances - which includes balances and deposits with banks that are restricted for withdrawal and usage.
vii. Trade Receivables and Loans
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
viii. Debt Instruments
Debt instruments are initially measured at amortised cost, fair value through other comprehensive income (âFVOCIâ) or fair value through profit or loss (âFVTPLâ) till derecognition on the basis of (i) the entityâs business model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.
c. Impairment of Financial Asset
In accordance with Ind AS 109, the Company uses âExpected Credit Lossâ (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
For financial assets other than trade receivables, as per Ind AS 109, the Company recognizes 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Companyâs trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall.
The impairment losses and reversals are recognised in Statement of Profit and Loss.
II. Financial Liabilities
a. Initial Recognition and Measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Trade and other payable are initially recognized at the fair value of the consideration received less directly attributable transaction cost.
Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss. In case of trade payables, they are initially recognised at fair value and subsequently, these liabilities are held at amortised cost, using the effective interest method.
b. Classification and Subsequent Measurement
Financial liabilities are subsequently measured at amortised cost using the EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
III. Derecognition of Financial Instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Companyâs Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
l. Provision, Contingent Liabilities & Contingent Assets
Provisions are recognized when the Company has a present obligation (legal or constructive), as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.
If the effect of the time value of money is material, provisions are measured on a discounted basis to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
A contingent liability is a possible obligation that arise from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognised because it is probable that an outflow of resources will not be required to settle the obligation. However, if the possibility of outflow of resources, arising out of present obligation, is remote, it is not even disclosed as contingent liability. The company does not recognize a contingent liability but discloses its existence in the financial assets.
Contingent assets are neither recognized nor disclosed in the financial statements.
m. Revenue Recognition
Revenue from sale of goods is recognized when significant risks and rewards of ownership are transferred to the buyer, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably, which coincides with the date of dispatch/bill of lading. The Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.
Revenue is measured at fair value of the consideration received or receivable includes excise duty and freight, wherever applicable and is net of trade discounts, volume rebates, sales tax /VAT and GST.
Export incentives are accounted for when there is a certainty of receipt.
Revenue from technical services recognized on the basis of milestones for rendering services as per the agreement.
Interest income is recognized on time apportionment basis. Effective interest rate (EIR) method is used to compute the interest income on long term loans and advances. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.
Dividend income on investments is recognised when the right to receive dividend is established.
n. Employee Benefits
i. Defined Contribution Plans
Contributions to defined contribution schemes such as employeesâ state insurance, labour welfare fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Eligible employees receive benefits from a provident fund, which is a defined contribution plan to the Trust/Government administered Trust. Both the employee and the company make contribution to the Amines Plasticizers Limited Employeesâ provident Fund Trust / Government administered Trust equal to the specified percentage of the covered employeeâs salary. Company also contributes to a Government administered pension fund on behalf of its employees.
ii. Defined Contribution Plans
The Company also provides for retirement benefits in the form of gratuity and compensated absences to the employees Company.
For defined benefit plans, the amount recognised as âEmployee benefit expensesâ in the Statement of Profit and Loss is the cost of accruing employee benefits promised to employees over the year and the costs of individual events such as past / future service benefit changes and settlements (such events are recognised immediately in the Statement of Profit and Loss). Any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised immediately in âOther comprehensive incomeâ and subsequently not reclassified to the Statement of Profit and Loss.
The defined benefit plan surplus or deficit on the Balance Sheet comprises the total for each plan of the fair value of plan assets less the present value of the defined benefit liabilities (using a discount rate by reference to market yields on government bonds at the end of the reporting period)
All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by independent actuary using the projected unit credit method. The classification of the Companyâs net obligation into current and non-current is as per the actuarial valuation report.
Liability for balance leave encashment / entitlement is provided on the basis of actuarial valuation at the year end.
o. Taxation
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognized directly in equity or in other comprehensive income.
Current Tax
Current tax is tax expected tax payable on the taxable income for the year, using the tax rate enacted at the reporting date, and any adjustment to the tax payable in respect of the earlier periods. Taxable profit differs from the net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.
Deferred Tax
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
A deferred tax liability is recognised based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of the reporting period. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
MAT credit entitlement is recognized and carried forward only if there is a reasonable certainty of it being set off against regular tax payable within the stipulated statutory period.
p. Earnings Per Share
Basic earnings per share is computed by dividing the net profit for the year attributable to equity shareholders of the Company by the weighted-average number of equity shares outstanding during the year. The weighted-average number of equity shares outstanding during the year and for all years presented is adjusted for events such as bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted-average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
q. Foreign Currency Transactions and Translation
The financial statements are presented in INR, the functional currency of the Company. Items included in the financial statements of the Company are recorded using the currency of the primary economic environment in which the Company operates (the âfunctional currencyâ).
Transactions in foreign currencies are recorded in the functional currency, by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency as declared by the custom and excise department / inter-bank rates, ruling on the date of transaction.
Foreign currency monetary items (assets and liabilities) are restated using the exchange rate prevailing at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to finance costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or Statement of Profit and Loss are also recognised in OCI or Statement of Profit and Loss, respectively).
Mar 31, 2016
NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES 1. GENERAL
a) The financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention except for Leasehold Land, certain Buildings, Plant & Equipment which are revalued in 1990-91 are carried at revalued amount.
b) The Company follows the mercantile system of accounting and recognizes income and expenditure on the accrual basis.
c) The accounting policies have been consistently followed.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the managementâs best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
3. FIXED ASSETS
a) Fixed Assets are stated at cost adjusted by revaluation in case of Leasehold Land, certain Buildings, Plant & Machinery, Research & Development Equipment and Effluent Treatment Plant.
b) In accordance with AS 28 on âImpairment of Assetsâ notified in the Companies (Accounting Standard) Rules, 2006, where there is an indication of impairment of the Companyâs assets related to cash generating units, the carrying amounts of such assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of such assets is estimated as the higher of its net selling price and its value in use. An impairment loss is recognized whenever the carrying amount of such assets exceeds its recoverable amount. Impairment loss is recognized in the statement of profit and loss. If at the balance sheet date, there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to the extent of the carrying value of the asset that would have been determined (net of amortization / depreciation), had no impairment loss been recognized.
4. DEPRECIATION
A. Tangible Assets
a) Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner specified in Schedule II to the Companies Act, 2013 with effect from April 01, 2014. Further, in the case of revalued assets, depreciation is calculated on straight line method on the revalued amounts as determined by the valuer. The difference between the depreciation on the assets based on such revaluation and that on original cost is transferred from Revaluation Reserve Account to Profit and Loss Account.
b) Depreciation on Fixed Assets added/disposed off/discarded during the year has been provided on the pro-rata basis with reference to the month of addition/disposal/discarding.
B. Intangible Assets
a) Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortised in a straight line basis over their estimated useful life.
5. INVESTMENTS
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are recognized at cost. The cost comprises of purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit & Loss.
6. VALUATION OF INVENTORIES
a) Inventories are valued at lower of cost and estimated net realisable value. Obsolete, defective and unserviceable stocks are provided for.
b) Cost of Stores and Spares is computed on Moving Weighted Average and other Inventories on FIFO basis.
c) Materials-in-process are valued at raw material cost and estimated cost of conversion.
d) Cost of finished goods includes conversion and other costs incurred in bringing the inventories to their present location and condition.
7. CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purposes of Cash Flow Statement comprise of cash in hand, Cheques in hand with original maturity of three months or less and Demand Deposit with Banks.
8. FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Foreign currency monetary items (assets and liabilities) are restated using the exchange rate prevailing at the reporting date.
The exchange differences arising on forward foreign currency contracts other than those entered into to hedge the foreign currency risk of firm commitments or highly probable forecast transactions are recognized in the period in which they arise based on the difference between i) foreign currency amount of the contract translated at the exchange rate on the reporting date and ii) the same foreign currency amount translated at the later of the date of inception of the forward exchange contract or the last reporting date.
The premium or discount arising at the inception of the forward foreign currency contracts is amortized as an expense or income over the life of the contract.
Any profit or loss arising on cancellation or renewal of forward foreign exchange contracts is recognized as income or expense for the year.
9. REVENUE RECOGNITION :
a) Revenue from sale of goods is recognized when significant risks and rewards of ownership are transferred to the customers which, coincides with the date of dispatch/bill of lading.
b) Sale includes excise duty and freight, wherever applicable and is net of sales tax /VAT.
c) Export incentives are accounted for when there is a certainty of receipt / utilization.
d) Revenue from technical services recognized on the basis of milestones for rendering services as per the agreement.
10. RESEARCH AND DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to Profit and Loss Account and Capital Expenditure is added to the cost of Fixed Assets in the year in which it is incurred.
11. EMPLOYEE BENEFITS
a) Gratuity :
The Company provides for gratuity, a defined benefit plan, covering eligible employees. Liability under gratuity plan is determined on actuarial valuation done by an independent valuer at the end of the year, based upon which, the Company contributes to the Amines & Plasticize Limited Employeesâ Gratuity Fund.
b) Provident Fund:
Eligible employees receive benefits from a provident fund, which is a defined contribution plan to the Trust/ Government administered Trust. Both the employee and the company make contribution to the Amines plasticizers Limited Employeesâ provident Fund Trust / Government administered Trust equal to the specified percentage of the covered employeeâs salary. Company also contributes to a Government administered pension fund on behalf of its employees.
c) Liability for leave encashment / entitlement is provided on the basis of actuarial valuation at the year end.
12. BORROWING COSTS
Borrowing costs attributable to the acquisition and construction of qualifying assets are capitalised as a part of the cost of respective assets upto the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.
13. ACCOUNTING FOR TAXES ON INCOME
a. Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961.
b. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realised in future. The same is subject to review annually. The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date.
c. MAT credit entitlement is recognized and carried forward only if there is a reasonable certainty of it being set off against regular tax payable within the stipulated statutory period.
14. LEASES
Where the Company has substantially acquired all risks and rewards of ownership of the assets, leases are classified as financial lease. Such assets are capitalized at the inception of the lease, at the lower of the fair value or present value of minimum lease payment and liability is created for equivalent amount. Each lease rent paid is allocated between liability and interest cost so as to obtain constant periodic rate of interest on the outstanding liability for each year.
Where significant portion of risks and reward of ownership of assets acquired under lease are retained by lessor, leases are classified as Operating Lease. Lease rentals for such leases are charged to Profit and Loss account.
15. PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS
a) Provisions are recognized when the Company has a present obligation, as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.
b) A contingent liability is a possible obligation that arise from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognised because it is probable that an outflow of resources will not be required to settle the obligation. However, if the possibility of outflow of resources, arising out of present obligation, is remote, it is not even disclosed as contingent liability. The company does not recognize a contingent liability but discloses its existence in the financial assets.
c) Contingent assets are neither recognized nor disclosed in the financial statements.
16. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted-average number of equity shares outstanding during the year. The weighted-average number of equity shares outstanding during the year and for all years presented is adjusted for events such as bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted-average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2015
1. GENERAL
a) The financial statements of the company have been prepared in
accordance with the generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under section 133 of the Companies Act 2013, read together with
paragraph 7 of the Companies (Accounts) Rules 2014. The financial
statements have been prepared on an accrual basis and under the
historical cost convention except for Leasehold Land, certain
Buildings, Plant & Equipment which are revalued in 1990-91 are carried
at revalued amount.
b) The Company follows the mercantile system of accounting and
recognizes income and expenditure on the accrual basis.
c) The accounting policies have been consistently followed.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
3. FIXED ASSETS
a) Fixed Assets are stated at cost adjusted by revaluation in case of
Leasehold Land, certain Buildings, Plant & Machinery, Research &
Development Equipment and Effluent Treatment Plant.
b) In accordance with AS 28 on 'Impairment of Assets' notified in the
Companies (Accounting Standard) Rules, 2006, where there is an
indication of impairment of the Company's assets related to cash
generating units, the carrying amounts of such assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized whenever the carrying amount of such assets exceeds its
recoverable amount. Impairment loss is recognized in the statement of
profit and loss. If at the balance sheet date, there is an indication
that a previously assessed impairment loss no longer exists, then such
loss is reversed and the asset is restated to the extent of the
carrying value of the asset that would have been determined (net of
amortization / depreciation), had no impairment loss been recognized.
4. DEPRECIATION
A) Tangible Assets
a) Depreciation on Fixed Assets is provided on straight line method at
the rates and in the manner specified in Schedule II to the Companies
Act, 2013 with effect from April 01, 2014. Further, in the case of
revalued assets, depreciation is calculated on straight line method on
the revalued amounts as determined by the valuer. The difference
between the depreciation on the assets based on such revaluation and
that on original cost is transferred from Revaluation Reserve Account
to Profit and Loss Account.
b) Till year ended 31 March 2014, to comply with the requirements of
Schedule XIV to the Companies Act, 1956, the company was charging 100%
depreciation on assets costing less than Rs 5,000/- in the year of
purchase. However, Schedule II to the Companies Act 2013, applicable
from the current year, does not recognize such practice. Hence, to
comply with the requirement of Schedule II to the Companies Act, 2013,
the company has changed its accounting policy for depreciations of
assets costing less than Rs 5,000/-. As per the revised policy, the
company is depreciating such assets over their useful life as assessed
by the management. The management has decided to apply the revised
accounting policy prospectively from accounting periods commencing on
or after 1 April 2014.
c) Depreciation on Fixed Assets added/disposed off/discarded during the
year has been provided on the pro-rata basis with reference to the
month of addition/disposal/discarding.
B) Intangible Assets
a) Intangible assets are stated at acquisition cost, net of accumulated
amortization and accumulated impairment losses, if any. Intangible
assets are amortised in a straight line basis over their estimated
useful life.
5. INVESTMENTS
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments. On initial recognition, all
investments are recognized at cost. The cost comprises of purchase
price and directly attributable acquisition charges such as brokerage,
fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
Statement of Profit & Loss.
6. VALUATION OF INVENTORIES
a) Inventories are valued at lower of cost and estimated net realisable
value. Obsolete, defective and unserviceable stocks are provided for.
b) Cost of Stores and Spares is computed on Moving Weighted Average and
other Inventories on FIFO basis.
c) Materials-in-process are valued at raw material cost and estimated
cost of conversion.
d) Cost of finished goods includes conversion and other costs incurred
in bringing the inventories to their present location and condition.
7. CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purposes of Cash Flow Statement
comprise of cash in hand, Cheques in hand with original maturity of
three months or less and Demand Deposit with Banks.
8. FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are recorded in the
reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency
at the date of the transaction.
Foreign currency monetary items (assets and liabilities) are restated
using the exchange rate prevailing at the reporting date.
The exchange differences arising on forward foreign currency contracts
other than those entered into to hedge the foreign currency risk of
firm commitments or highly probable forecast transactions are
recognized in the period in which they arise based on the difference
between i) foreign currency amount of the contract translated at the
exchange rate on the reporting date and
ii) the same foreign currency amount translated at the later of the
date of inception of the forward exchange contract or the last
reporting date.
The premium or discount arising at the inception of the forward foreign
currency contracts is amortized as an expense or income over the life
of the contract.
Any profit or loss arising on cancellation or renewal of forward
foreign exchange contracts is recognized as income or expense for the
year.
9. REVENUE RECOGNITION :
a) Revenue from sale of goods is recognized when significant risks and
rewards of ownership are transferred to the customers which, coincides
with the date of dispatch/bill of lading.
b) Sale includes excise duty and freight, wherever applicable and is
net of sales tax /VAT
c) Export incentives are accounted for when there is a certainty of
receipt / utilization.
d) Revenue from technical services recognized on the basis of
milestones for rendering services as per the agreement.
10. RESEARCH AND DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to Profit and Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year in which
it is incurred.
11. EMPLOYEE BENEFITS
a) Gratuity :
The Company provides for gratuity, a defined benefit plan, covering
eligible employees. Liability under gratuity plan is determined on
actuarial valuation done by an independent valuer at the end of the
year, based upon which, the Company contributes to the Amines &
Plasticize Limited Employees' Gratuity Fund.
b) Provident Fund :
Eligible employees receive benefits from a provident fund, which is a
defined contribution plan to the Trust/Government administered Trust.
Both the employee and the company make contribution to the Amines
plasticizers Limited Employees' provident Fund Trust / Government
administered Trust equal to the specified percentage of the covered
employee's salary. Company also contributes to a Government
administered pension fund on behalf of its employees.
c) Liability for leave encashment / entitlement is provided on the
basis of actuarial valuation at the year end.
12. BORROWING COSTS
Borrowing costs attributable to the acquisition and construction of
qualifying assets are capitalised as a part of the cost of respective
assets upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to Profit and Loss Account.
13. ACCOUNTING FOR TAXES ON INCOME
a) Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961.
b) Deferred tax assets arising from timing differences are recognized
to the extent there is reasonable certainty that these would be
realised in future. The same is subject to review annually. The
deferred tax for timing differences between the book and tax profits
for the year is accounted for, using the tax rates and laws that have
been substantively enacted as of the balance sheet date.
c) MAT credit entitlement is recognized and carried forward only if
there is a reasonable certainty of it being set off against regular tax
payable within the stipulated statutory period.
14. LEASES
Where the Company has substantially acquired all risks and rewards of
ownership of the assets, leases are classified as financial lease. Such
assets are capitalized at the inception of the lease, at the lower of
the fair value or present value of minimum lease payment and liability
is created for equivalent amount. Each lease rent paid is allocated
between liability and interest cost so as to obtain constant periodic
rate of interest on the outstanding liability for each year.
Where significant portion of risks and reward of ownership of assets
acquired under lease are retained by lessor, leases are classified as
Operating Lease. Lease rentals for such leases are charged to Profit
and Loss account.
15. PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS
a) Provisions are recognized when the Company has a present obligation,
as a result of past events, for which it is probable that an outflow of
economic benefits will be required to settle the obligation and a
reliable estimate can be made for the amount of the obligation.
b) A contingent liability is a possible obligation that arise from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognised
because it is probable that an outflow of resources will not be
required to settle the obligation. However, if the possibility of
outflow of resources, arising out of present obligation, is remote, it
is not even disclosed as contingent liability. The company does not
recognize a contingent liability but discloses its existence in the
financial assets.
c) Contingent assets are neither recognized nor disclosed in the
financial statements.
16. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit for
the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes) by the weighted-average
number of equity shares outstanding during the year. The
weighted-average number of equity shares outstanding during the year
and for all years presented is adjusted for events such as bonus issue;
bonus element in a rights issue to existing shareholders; share split;
and reverse share split (consolidation of shares) that have changed the
number of equity shares outstanding, without a corresponding change in
resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted-average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2014
1. GENERAL
a) The financial statements are prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) applicable in India
under the historical cost convention except for certain fixed assets,
which have been revalued, in accordance with the applicable Accounting
Standards (AS) notified in Companies (Accounting Standard) Rules, 2006
and on the principles of a going concern.
b) The Company follows the mercantile system of accounting and
recognizes income and expenditure on the accrual basis except those
with significant uncertainties.
c) The accounting policies have been consistently followed.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principals (GAAP) requires management to make
estimates and assumptions that affect the reported amount of assets,
liabilities and disclosures of contingent liabilities on the date of
financial statements and reported amounts of revenue and expenses for
that year. Actual results could differ from these estimates. Any
revision to accounting estimates is recognized prospectively.
3. FIXED ASSETS
a) Fixed Assets are stated at cost adjusted by revaluation in case of
Leasehold Land, certain Buildings, Plant & Machinery, Research &
Development Equipment and Effluent Treatment Plant.
b) In accordance with AS 28 on ''Impairment of Assets'' notified in the
Companies (Accounting Standard) Rules, 2006, where there is an
indication of impairment of the Company''s assets related to cash
generating units, the carrying amounts of such assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized whenever the carrying amount of such assets exceeds its
recoverable amount. Impairment loss is recognized in the statement
profit and loss. If at the balance sheet date, there is an indication
that a previously assessed impairment loss no longer exists, then such
loss is reversed and the asset is restated to the extent of the
carrying value of the asset that would have been determined (net of
amortization / depreciation), had no impairment loss been recognized.
4. DEPRECIATION
a) Depreciation on Fixed Assets (Except Gas Cylinders on which higher
rate of Depreciation has been provided) is provided on straight line
method at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956. Further, in the case of revalued assets,
depreciation is calculated on straight line method on the revalued
amounts at the rates as determined by the valuer. The difference
between the depreciation on the assets based on such revaluation and
that on original cost is transferred from Revaluation Reserve Account
to Profit and Loss Account.
b) Depreciation on Oxygen Gas Cylinders & Nitrogen gas Cylinder is
provided on the basis of anticipated life, as certified by a Chartered
Engineer, on straight line method @ 5.5555% & @ 10% per annum
respectively.
c) Premium and Development Cost paid for Leasehold-land is amortised
over the period of lease.
d) Depreciation on Fixed Assets added / disposed off / discarded during
the year has been provided on the pro-rata basis with reference to the
month of addition / disposal / discarding.
5. INVESTMENTS
Long term Investments are stated at cost less provision, if any, for
diminution in value, which is other than temporary.
All current investment are valued at lower of cost or net market value
and provision is made to recognize any decline in the carrying value.
6. VALUATION OF INVENTORIES
a) Inventories are valued at lower of cost and estimated net realisable
value. Obsolete, defective and unserviceable stocks are provided for.
b) Cost of Stores and Spares is computed on Moving Weighted Average and
other Inventories on FIFO basis.
c) Materials-in-process are valued at raw material cost and estimated
cost of conversion.
d) Cost of finished goods includes conversion and other costs incurred
in bringing the inventories to their present location and condition.
7. FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are recorded at the rates prevailing
on the date of the transaction. Monetary items denominated in foreign
currency are restated at the rate prevailing on the balance sheet date.
The exchange differences arising on forward foreign currency contracts
other than those entered into to hedge the foreign currency risk of
firm commitments or highly probable forecast transactions are
recognized in the period in which they arise based on the difference
between
i) foreign currency amount of the contract translated at the exchange
rate on the reporting date and ii) the same foreign currency amount
translated at the later of the date of inception of the forward
exchange contract or the last reporting date.
The premium or discount arising at the inception of the forward foreign
currency contracts is amortized as an expense or income over the life
of the contract.
Any profit or loss arising on cancellation or renewal of forward
foreign exchange contracts is recognized as income or expense for the
year.
8. REVENUE RECOGNITION :
a. Revenue from sale of goods is recognized when significant risks and
rewards of ownership are transferred to the customers which, coincides
with the date of dispatch/bill of lading.
b. Sale includes excise duty and freight, wherever applicable and is
net of sales tax /VAT
c. Export incentives are accounted for when there is a certainty of
receipt / utilization.
d. Revenue from technical services recognized on the basis of
milestones for rendering services as per the agreement.
9. RESEARCH AND DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to Profit and Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year in which
it is incurred.
10. EMPLOYEE BENEFITS
a) Gratuity :
The Company provides for gratuity, a defined benefit plan, covering
eligible employees. Liability under gratuity plan is determined on
actuarial valuation done by an independent valuer at the end of the
year, based upon which, the Company contributes to the Amines &
Plasticize Limited Employees'' Gratuity Fund.
b) Provident Fund :
Eligible employees receive benefits from a provident fund, which is a
defined contribution plan to the Trust / Government administered Trust.
Both the employee and the company make contribution to the Amines
plasticizers Limited Employees'' provident Fund Trust / Government
administered Trust equal to the specified percentage of the covered
employee''s salary. Company also contributes to a Government
administered pension fund on behalf of its employees.
c) Liability for leave encashment / entitlement is provided on the
basis of actuarial valuation at the year end.
11. BORROWING COSTS
Borrowing costs attributable to the acquisition and construction of
qualifying assets are capitalised as a part of the cost of respective
assets upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to Profit and Loss Account.
12. INCOME TAX
a) Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961.
b) Deferred tax assets arising from timing differences are recognized
to the extent there is reasonable certainty that these would be
realised in future. The same is subject to review annually. The
deferred tax for timing differences between the book and tax profits
for the year is accounted for, using the tax rates and laws that have
been substantively enacted as of the balance sheet date
c) MAT credit entitlement is recognized and carried forward only if
there is a reasonable certainty of it being set off against regular tax
payable within the stipulated statutory period.
13. LEASES
Where the Company has substantially acquired all risks and rewards of
ownership of the assets, leases are classified as financial lease. Such
assets are capitalized at the inception of the lease, at the lower of
the fair value or present value of minimum lease payment and liability
is created for equivalent amount. Each lease rent paid is allocated
between liability and interest cost so as to obtain constant periodic
rate of interest on the outstanding liability for each year.
Where significant portion of risks and reward of ownership of assets
acquired under lease are retained by lessor, leases are classified as
Operating Lease. Lease rentals for such leases are charged to Profit
and Loss account.
14. PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS
a) A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefit will be
required to settle an obligation.
b) Contingent liabilities, unless the possibility of the outflow of
resources embodying economic benefit is remote, are disclosed by way of
notes to accounts.
c) Contingent assets are not recognized or disclosed in the financial
statement.
Mar 31, 2012
1. GENERAL
a) The financial statements are prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) applicable in India
under the historical cost convention except for certain fixed assets,
which have been revalued, in accordance with the applicable Accounting
Standards (AS) notified in Companies (Accounting Standard) Rules, 2006
and on the principles of a going concern.
b) The Company follows the mercantile system of accounting and
recognizes income and expenditure on the accrual basis except those
with significant uncertainties.
c) The accounting policies have been consistently followed.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principals (GAAP) requires management to make
estimates and assumptions that affect the reported amount of assets,
liabilities and disclosures of contingent liabilities on the date of
financial statements and reported amounts of revenue and expenses for
that year. Actual results could differ from these estimates. Any
revision to accounting estimates is recognized prospectively.
3. FIXED ASSETS
a) Fixed Assets are stated at cost adjusted by revaluation in case of
Leasehold Land, certain Buildings, Plant & Machinery, Research &
Development Equipment and Effluent Treatment Plant.
b) In accordance with AS 28 on 'Impairment of Assets' notified in
the Companies (Accounting Standard) Rules, 2006, where there is an
indication of impairment of the Company's assets related to cash
generating units, the carrying amounts of such assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized whenever the carrying amount of such assets exceeds its
recoverable amount. Impairment loss is recognized in the statement
profit and loss. If at the balance sheet date, there is an indication
that a previously assessed impairment loss no longer exists, then such
loss is reversed and the asset is restated to the extent of the
carrying value of the asset that would have been determined (net of
amortization I depreciation), had no impairment loss been recognized.
4. DEPRECIATION
a) Depreciation on Fixed Assets (Except Gas Cylinders on which higher
rate of Depreciation has been provided) is provided on straight line
method at the rates and in the manner specified in Schedule XIV to the
Companies Act, 1956. Further, in the case of revalued assets,
depreciation is calculated on straight line method on the revalued
amounts at the rates as determined by the valuer. The difference
between the depreciation on the assets based on such revaluation and
that on original cost is transferred from Revaluation Reserve Account
to Profit and Loss Account.
b) Depreciation on Oxygen Gas Cylinders & Nitrogen gas Cylinder is
provided on the basis of anticipated life, as certified by a Chartered
Engineer, on straight line method @ 5.5555% & @ 10% per annum
respectively.
c) Premium and Development Cost paid for Leasehold-land is amortised
over the period of lease.
d) Depreciation on Fixed Assets added/disposed off/discarded during the
year has been provided on the pro-rata basis with reference to the
month of addition/disposal/discarding.
5. INVESTMENTS
Long term Investments are stated at cost less provision, if any, for
diminution in value, which is other than temporary.
All current investment are valued at lower of cost or net market value
and provision is made to recognize any decline in the carrying value.
6. VALUATION OF INVENTORIES
a) Inventories are valued at lower of cost and estimated net realisable
value. Obsolete, defective and unserviceable stocks are provided for.
b) Cost of Stores and Spares is computed on Moving Weighted Average and
other Inventories on FIFO basis.
c) Materials-in-process are valued at raw material cost and estimated
cost of conversion.
d) Cost of finished goods includes conversion and other costs incurred
in bringing the inventories to their present location and condition.
7. FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are recorded at the rates prevailing
on the date of the transaction. Monetary items denominated in foreign
currency are restated at the rate prevailing on the balance sheet date.
The exchange differences arising on forward foreign currency contracts
other than those entered into to hedge the foreign currency risk of
firm commitments or highly probable forecast transactions are
recognized in the period in which they arise based on the difference
between i) foreign currency amount of the contract translated at the
exchange rate on the reporting date and
ii) the same foreign currency amount translated at the later of the
date of inception of the forward exchange contract or the last
reporting date.
The premium or discount arising at the inception of the forward foreign
currency contracts is amortized as an expense or income over the life
of the contract.
Any profit or loss arising on cancellation or renewal of forward
foreign exchange contracts is recognized as income or expense for the
year.
8. REVENUE RECOGNITION :
a. Revenue from sale of goods is recognized when significant risks and
rewards of ownership are transferred to the customers which coincides
with the date of dispatch/bill of lading.
b. Sale includes excise duty and freight, wherever applicable and is
net of sales tax /VAT.
c. Export incentives are accounted for when there is a certainty of
receipt / utilization.
d. Revenue from technical services recognized on the basis of
milestones for rendering services as per the agreement.
9. RESEARCH AND DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to Profit and Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year in which
it is incurred.
10. EMPLOYEE BENEFITS
a) Gratuity :
The Company provides for gratuity, a defined benefit plan, covering
eligible employees. Liability under gratuity plan is determined on
actuarial valuation done by an independent valuer at the end of the
year, based upon which, the Company contributes to the Amines &
Plasticize Limited Employees' Gratuity Fund
b) Provident Fund :
Eligible employees receive benefits from a provident fund, which is a
defined contribution plan to the Trust/Government administered Trust.
Both the employee and the company make contribution to the Amines
plasticizers Limited Employees' provident Fund Trust I Government
administered Trust equal to the specified percentage of the covered
employee's salary. Company also contributes to a Government
administered pension fund on behalf of its employees.
c) Liability for leave encashment I entitlement is provided on the
basis of actuarial valuation at the year end.
11. BORROWING COSTS
Borrowing costs attributable to the acquisition and construction of
qualifying assets are capitalised as a part of the cost of respective
assets upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to Profit and Loss Account.
12. INCOME TAX
a) Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
TaxAct, 1961.
b) Deferred tax assets arising from timing differences are recognized
to the extent there is reasonable certainty that these would be
realised in future. The same is subject to review annually. The
deferred tax for timing differences between the book and tax profits
for the year is accounted for, using the tax rates and laws that have
been substantively enacted as of the balance sheet date
c) MAT credit entitlement is recognized and carried forward only if
there is a reasonable certainty of it being set off against regular tax
payable within the stipulated statutory period.
13. LEASES
Where the Company has substantially acquired all risks and rewards of
ownership of the assets, leases are classified as financial lease. Such
assets are capitalized at the inception of the lease, at the lower of
the fair value or present value of minimum lease payment and liability
is created for equivalent amount. Each lease rent paid is allocated
between liability and interest cost so as to obtain constant periodic
rate of interest on the outstanding liability for each year.
Where significant portion of risks and reward of ownership of assets
acquired under lease are retained by lessor, leases are classified as
Operating Lease. Lease rentals for such leases are charged to Profit
and Loss account.
14. PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS
a) A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefit will be
required to settle an obligation.
b) Contingent liabilities, unless the possibility of the outflow of
resources embodying economic benefit is remote, are disclosed by way of
notes to accounts.
c) Contingent assets are not recognized or disclosed in the financial
statement.
Mar 31, 2010
1. GENERAL
a) The financial statements are prepared in accordance with the
Generally Accepted Accounting Principles (GAAP) applicable in India
under the historical cost convention except for certain fixed assets,
which have been revalued, in accordance with the applicable Accounting
Standards (AS) notified in Companies (Accounting Standard) Rules, 2006
and on the principles of a going concern.
b) The Company follows the mercantile system of accounting and
recognizes income and expenditure on the accrual basis except those
with significant uncertainties.
c) The accounting policies have been consistently followed.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principals (GAAP) requires management to make
estimates and assumptions that affect the reported amount of assets,
liabilities and disclosures of contingent liabilities on the date of
financial statements and reported amounts of revenue and expenses for
that year. Actual results could differ from these estimates. Any
revision to accounting estimates is recognized prospectively.
3. FIXED ASSETS
a) Fixed Assets are stated at cost adjusted by revaluation in case of
Leasehold Land, certain Buildings, Plant & Machinery, Research &
Development Equipment and Effluent Treatment Plant.
b) In accordance with AS 28 on Impairment of Assets notified in the
Companies (Accounting Standard) Rules, 2006, where there is an
indication of impairment of the Companys assets related to cash
generating units, the carrying amounts of such assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized whenever the carrying amount of such assets exceeds its
recoverable amount. Impairment loss is recognized in the profit and
loss account. If at the balance sheet date, there is an indication that
a previously assessed impairment loss no longer exists, then such loss
is reversed and the asset is restated to the extent of the carrying
value of the asset that would have been determined (net of amortization
/ depreciation), had no impairment loss been recognized.
4. DEPRECIATION
a) Depreciation on Fixed Assets is provided on straight line method at
the rates and in the manner specified in Schedule XIV to the Companies
Act, 1956. Further, in the case of revalued assets, depreciation is
calculated on straight line method on the revalued amounts at the rates
as determined by the valuer. The difference between the depreciation on
the assets based on such revaluation and that on original cost is
transferred from Revaluation Reserve Account to Profit and Loss
Account.
b) Depreciation on Gas Cylinders is provided on the basis of
anticipated life, as certified by a Chartered Engineer, on straight
line method @ 5.5555% per annum.
c) Premium and Development Cost paid for Leasehold-land is amortised
over the period of lease.
d) Depreciation on Fixed Assets added/disposed off/discarded during the
year has been provided on the pro-rata basis with reference to the
month of addition/disposal/discarding.
5. INVESTMENTS
Long term Investments are stated at cost less provision, if any, for
diminution in value, which is other than temporary.
All current investment are valued at lower of cost or net market value
and provision is made to recognize any decline in the carrying value .
6. VALUATION OF INVENTORIES
a) Inventories (including shares & securities) are valued at lower of
cost and estimated net realisable value. Obsolete, defective and
unserviceable stocks are provided for.
b) Cost of Stores and Spares is computed on Moving Weighted Average and
other Inventories on FIFO basis.
c) Materials-in-process are valued at raw material cost and estimated
cost of conversion .
d) Cost of finished goods includes conversion and other costs incurred
in bringing the inventories to their present location and condition.
7. FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are recorded at the rates prevailing
on the date of the transaction. Monetary items denominated in foreign
currency are restated at the rate prevailing on the balance sheet date.
The exchange differences arising on forward foreign currency contracts
other than those entered into to hedge the foreign currency risk of
firm commitments or highly probable forecast transactions are
recognized in the period in which they arise based on the difference
between i) foreign currency amount of the contract translated at the
exchange rate on the reporting date and ii) the same foreign currency
amount translated at the later of the date of inception of the forward
exchange contract or the last reporting date.
The premium or discount arising at the inception of the forward foreign
currency contracts is amortized as an expense or income over the life
of the contract.
Any profit or loss arising on cancellation or renewal of forward
foreign exchange contracts is recognized as income or expense for the
year.
8. REVENUE RECOGNITION:
a. Revenue from sale of goods is recognized when significant risks and
rewards of ownership are transferred to the customers which coincides
with the date of dispatch/bill of lading.
b. Sale includes excise duty and freight, wherever applicable and is
net of sales tax A/AT.
c. Export incentives are accounted for when there is a certainty of
receipt / utilization.
d. Revenue from technical services recognized on the basis of
milestones for rendering services as per the agreement.
9. RESEARCH AND DEVELOPMENT EXPENDITURE
Revenue expenditure is charged to Profit and Loss Account and Capital
Expenditure is added to the cost of Fixed Assets in the year in which
it is incurred.
10. EMPLOYEE BENEFITS
a) Gratuity :
The Company provides for gratuity, a defined benefit plan, covering
eligible employees . Liability under gratuity plan is determined on
actuarial valuation done by an independent valuer at the end of the
year, based upon which, the Company contributes to the Amines &
Plasticizers Limited Employees Gratuity Fund.
b) Provident Fund :
Eligible employees receive benefits from a provident fund, which is a
defined contribution plan to the Trust/Government administered Trust.
Both the employee and the company make contribution to the Amines &
Plasticizers Limited Employees provident Fund Trust / Government
administered Trust equal to the specified percentage of the covered
employees salary. Company also contributes to a Government
administered pension fund on behalf of its employees.
c) Liability for leave encashment / entitlement is provided on the
basis of actuarial valuation at the year end.
11. BORROWING COSTS
Borrowing costs attributable to the acquisition and construction of
qualifying assets are capitalised as a part of the cost of respective
assets upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to Profit and Loss Account.
12. INCOME TAX
a) Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961.
b) Deferred tax assets arising from timing differences are recognized
to the extent there is reasonable certainty that these would be
realised in future. The same is subject to review annually. The
deferred tax for timing differences between the book and tax profits
for the year is accounted for, using the tax rates and laws that have
been substantively enacted as of the balance sheet date
c) MAT credit entitlement is recognized and carried forward only if
there is a reasonable certainty of it being set off against regular tax
payable within the stipulated statutory period.
13. LEASES
Where the Company has substantially acquired all risks and rewards of
ownership of the assets, leases are classified as financial lease. Such
assets are capitalized at the inception of the lease, at the lower of
the fair value or present value of minimum lease payment and liability
is created for equivalent amount. Each lease rent paid is allocated
between liability and interest cost so as to obtain constant periodic
rate of interest on the outstanding liability for each year.
Where significant portion of risks and reward of ownership of assets
acquired under lease are retained by lessor, leases are classified as
Operating Lease. Lease rentals for such leases are charged to Profit
and Loss account.
14. PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS
a) A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefit will be
required to settle an obligation.
b) Contingent liabilities, unless the possibility of the outflow of
resources embodying economic benefit is remote, are disclosed by way of
notes to accounts.
c) Contingent assets are not recognized or disclosed in the financial
statement.
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