Accounting Policies of Bharat Agri Fert & Realty Ltd. Company
Mar 31, 2023
1. Corporate Information about the Company
These statements comprise financial statements of Bharat Agri Fert & Realty Limited (referred to as "the Company") (CIN: L24100MH1985PLC036547) for the year ended March 31, 2023. The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its Equity shares are listed on Bombay Stock Exchange in India. The registered office of the company is located at 301, 3rd Floor, Hubtown Solaris, N S Phadke Marg, near Gokhale Bridge, Andheri (East), Mumbai - 400 069.
The Company is principally engaged in the business of construction and development of Residential and Commercial Complex, Manufacture of Fertilisers and Hospitality Sector-Resort.
The financial statements were approved by the Board of Directors and authorised for issue on May 22, 2023.
2. Significant Accounting Policiesa. Statement of Compliance
These Financial Statements have been prepared in accordance with the Indian Accounting Standards ("Ind AS") as amended and notified by Ministry of Corporate Affairs ("MCA") pursuant to Section 133 of the Companies Act, 2013 read with Rule 3.
b. Basis of preparation & presentation
The Financial Statements have been prepared on the historical cost basis except for certain revalued PPE and financial instruments that are measured at fair value at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability, if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these Financial Statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 ''Inventories'' ("Ind AS 2"), Employee defined benefit assets/(obligations) are recognised at the present value of the defined benefit obligations.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, Level 2 or Level 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
All assets and liabilities have been classified as Current and Non-Current as per the Company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products/ services rendered and the time between the rendering of the products/services and their realisation in cash and cash equivalent, the Company has ascertained its operating cycle as twelve months for the purpose of Current and Non- Current classification of assets and liabilities.
All the Indian Accounting Standards ("Ind AS") issued and notified by the MCA are effective and considered for the significant accounting policies to the extent relevant and applicable for the Company.
The Financial Statements are presented in Indian Rupee ("INR"), which is the Company''s functional currency and all values are rounded to the nearest lakhs upto two decimals, except when otherwise indicated.
c. Key Accounting Estimates and Judgements
The preparation of Financial Statements in conformity with Ind AS requires Management to make judgements, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses at the date of these Financial Statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future period, if the revision affects current and future periods.
Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year are:
i) Useful Lives of Property , Plant and Equipment and Intangible Assets
Management reviews the useful lives of property, plant and equipment at least once a year. Such lives are dependent upon an assessment of both the technical lives of the assets and also their likely economic lives based on various internal and external factors including relative efficiency and operating costs. Accordingly, depreciable lives are reviewed using the best information available to the Management.
ii) Provisions, Liabilities and Contingencies
Provisions and liabilities are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events that can reasonably be estimated. The timing of recognition requires application of judgments to existing facts and circumstances which may be subject to change. The amounts are determined by discounting the expected future cash flows at a pre - tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
In the normal course of business, contingent liabilities may arise from litigation and other claims against the Company. Potential liabilities that are possible to quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are not recognised. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
A contingent asset is not recognised, but disclosed in the Financial Statements when an inflow of economic benefit is probable. Provisions, contingent liability and assets are reviewed at each reporting date and are adjusted to reflect the current best estimates.
iii) Recognition and Measurement of defined benefit obligation
The obligation arising from defined benefit plans is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The Company''s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Significant management judgements is also required in determining deferred tax assets and liabilities and recoverability of deferred tax assets which is based on estimates of taxable income.
d. Property, Plant and Equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Freehold land are stated at cost. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.
Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it increases the future benefits from its previously assessed standard of performance. All other expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
Borrowing costs directly attributable to acquisition of property, plant and equipment which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets.
An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the Property, plant and equipment is de-recognized.
Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is neither related to the construction activity nor is incidental thereto is charged to the statement of profit and loss.
Costs of assets not ready for use at the balance sheet date are disclosed under capital work- in- progress.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated on written down value basis over the useful lives estimated by the management based on internal assessment as follows:
|
Particulars |
Useful Life |
|
Factory/Office Buildings |
58 years |
|
Plant and Machinery and ETP |
18 years |
|
Pollution Control Equipments |
18 years |
|
Laboratory Equipments |
15 years |
|
Electrical Installation |
18 years |
|
Office Equipments |
15 years |
|
Computers |
6 years |
|
Furniture and Fixtures |
15 years |
|
Vehicles |
10 years |
The Company, based on internal assessments, believes that the useful live as given above represents period over which the Management expects to use these assets. Hence, the useful lives for these assets is difference from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013
The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount. The residual values are not more than 5% of the original cost of the asset.
Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortization and accumulated impairment loss.
Subsequent expenditure is capitalized only when it increases the future economic benefits from the specific asset to which it relates. An intangible asset is derecognized on disposal or when no future economic benefits are expected from its use and disposal.
Losses arising from retirement and gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss.
Amortisation methods and periods
Intangible assets are amortized on a written down value basis over the useful life of five years which is estimated by the management
The estimated useful lives of intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation method is revised to reflect the changed pattern, if any.
f. Impairment of Tangible Assets and Intangible Assets other than Goodwill
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cashgenerating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cashgenerating units, or otherwise they are allocated to the smallest group of cashgenerating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in Statement of Profit and Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash- generating unit) in prior years. A reversal of an impairment loss is recognised immediately in Statement of Profit and Loss. An impairment loss recognised for goodwill is not reversed in a subsequent period.
Investments in associates 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 associates, the difference between net disposal proceeds and the carrying amounts are recognised in the Statement of Profit and Loss.
h. Inventories(a) Fertiliser Division:
Raw Materials and Stores and Spares are valued at lower of moving average cost or net realisable value.
Finished stocks are valued at cost or net realisable value whichever is lower.
Inventory comprises completed property for sale and property under construction (Construction Work-in-Progress).
> Completed unsold inventory is valued at lower of cost and net realisable value. Cost is determined by including cost of land (at book value), TDR, materials, services and other related proportionate overheads.
> Work-in-progress is valued at lower of cost and net realisable value. Cost comprises cost of land (at book value), materials, services and other proportionate overheads related to projects under construction.
The valuation of inventories includes taxes, duties of non refundable nature and direct expenses and other direct cost attributable to the cost of inventory, net of GST/ countervailing duty / education cess and value added tax.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. The net realizable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw materials and other supplies held for use in production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realizable value.
Cash and cash equivalents includes cash in hand, demand deposits with banks and other short term highly liquid investments, which are readily convertible into cash and which are subject to an insignificant risk of change in value and have original maturities of three months or less.
Cash flows are reported using the indirect method, whereby net profit for the period is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents include cash on hand, cash at banks, other short-term deposits and highly liquid investments with original maturity of three months or less that are readily convertible into cash.
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss ("FVTPL") are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in Statement of Profit and Loss.
On initial recognition, a financial asset is recognised at fair value. All recognised financial assets are subsequently measured in their entirety at either amortized cost or fair value through profit or loss ("FVTPL") or fair value through other comprehensive income ("FVOCI") depending on the classification of the financial assets.
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.
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 ("ECL"). The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
All investments in equity instruments classified under financial assets are initially measured at fair value. The Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL.
The Company makes such election on an instrument- by-instrument basis. Fair value changes on an equity instrument is recognised in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognised in OCI. Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognised in the Statement of Profit and Loss.
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the contractual rights to receive the cash flows from the asset.
Expected credit losses are recognised for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.
Expected credit losses is the weighted-average of difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Company is required to consider:
. All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.
. Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 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 Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.
Financial Liabilities and Equity Instruments Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company''s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in Statement of Profit and Loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as FVTPL. 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.
All financial liabilities are subsequently measured at amortized cost using the effective interest method. Financial liabilities carried at FVTPL are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss. Interest expense are included in the ''Finance costs'' line item.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The EIR is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.
Financial guarantee contracts issued by the Company are initially measured at their fair values and are subsequently measured at the higher of:
> the amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and
> the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115.
When guarantee in relation to loans or other payables of subsidiaries are provided for no compensation, the fair values are accounted for as contributions and recognised as cost of investment.
Derecognition of Financial Liabilities
The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired.
Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently re-measured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in Statement of Profit and Loss immediately. The Company has not designated any derivative instruments as a hedging instrument.
l. Provisions, Liabilities and Contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
The Company derives revenues primarily from Sale of Fertiliser and business of Real Estate Development; its other operating revenues include Lease Rentals and Subvention Income.
Revenue from contracts with customers for sale of goods or services is recognised when the Company satisfies performance obligation by transferring promised goods or services to the customer at an amount that reflects the consideration which the Company is expected to be entitled to in exchange for those goods or services.
Revenue is measured based on the transaction price, which is the consideration, adjusted for trade discounts, incentives and returns, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. The trade discounts
incentives and right of return are estimated and provided for, based on historical, current and forecast information available. A refund liability is recognised for expected returns in relation to sales made, corresponding assets are recognised for the products expected to be returned.
The Company does not expect to have any contract where the period between the transfer of the promised goods or services to the customer and payment by the customer exceed one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Revenue from sale of goods is recognised at a point in time when the control of the goods is transferred to the customer involving single performance obligation. The control of goods is transferred to the customer depending upon the incoterms or as agreed with customer, delivery basis or dispatch, as the case may be (i.e. at the point in time when goods are delivered at the dealer site or when the customer purchases the goods at the retail outlet).
Revenue from services, which mainly consists of lease rentals from letting of space, is recognised over time on satisfying performance obligations as per the terms of agreement, that is, by reference to the period in which services are being rendered. Revenue from services, if any, involving single performance obligation is recognised at a point in time.
Revenue is recognized upon rendering of the service, provided pervasive evidence of an arrangement exists, tariff / rates are fixed or are determinable and collectability is reasonably certain. Revenue from rendering of services is net of Indirect taxes, returns and discounts.
Subsidy is recognised on the basis of the rates notified from time to time by the Government of India in accordance with the Nutrient Based Subsidy (NBS) policy on the quantity of fertilisers sold by the Company for the period for which notification has been issued.
Construction and real estate development
The company derives revenues from sale of properties comprising of and residential units. The Company recognises revenue when it determines the satisfaction of performance obligations at a point in time. Revenue is recognised upon transfer of control of promised products to customer in an amount that reflects the consideration which the Company expects to receive in exchange for those products.
In arrangements for sale of units the Company has applied the guidance in Ind AS 115, Revenue from contract with customer, by applying the revenue recognition criteria for each distinct performance obligation. The arrangements with customers generally meet the criteria for considering sale of units as distinct performance obligations.
For allocating the transaction price, the Company has measured the revenue in respect of each performance obligation of a contract at its relative standalone selling price. The price that is regularly charged for an item when sold separately is the best evidence of its standalone selling price. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct product or service from the customer.
For sale of units the Company recognises revenue when its performance obligations are satisfied and customer obtains control of the asset.
Revenue from trading activity, in property as well as Transferable Development Rights (TDR), is recognized when significant risk and rewards of the property/TDR are transferred to the buyer, as demonstrated by transfer of physical possession and transfer of the title in the property/TDR.
Trade Receivables, Contract Assets and Contract Liabilities Trade Receivables
A receivable is recognised by the Company when the control over the goods and services is transferred to the customer such as when goods and services are delivered as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due (which is referred to as "Trade Receivable").
A receivable is recognised when the Company''s right to an amount of consideration under the contract with the customer that is unconditional, as only the passage of time is required before payment is due.
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
A contract liability is the obligation to transfer goods or services to the customer for which the consideration (or the amount is due) has been received from the customer. If the customer pays the consideration before the transfer of goods or services to the customer, a contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rates. Interest income is included under the head "Other Income" in the Statement of Profit and Loss.
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. Interest income from a financial asset is recognized using the effective interest rate (EIR), which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
Dividend Income is recognised when the right to receive the payment is established. Incomes from investments are accounted on an accrual basis.
n. Lease LiabilityShort-term leases and leases of low-value assets
The Company has elected not to recognise right-to-use assets and Lease Liabilities for short-term lease of Property, Plant and Equipment that have a lease term of 12 months or less and leases of low-value assets. The Company recognise the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of ''Other Operating Income under Revenue from Operation'' in the Statement of Profit and Loss.
Costs and expenses are recognised when incurred and are classified according to their nature.
p. Employee BenefitsLong Term Post-employment benefits
Contributions to defined contribution schemes are recognised as an expense when employees have rendered service entitling them to the contributions.
Provident and Family Pension Fund
The eligible employees of the Company are entitled to receive post-employment benefits in respect of provident and family pension fund, in which both the employees and the Company make monthly contributions at a specified percentage of the employees'' eligible salary (currently 12% of employees'' eligible salary). The contributions are made to the provident fund and pension fund to respective Regional Provident Fund Commissioner. The Company has no further obligations beyond making the contribution. The company has the following Defined Benefit Plans:
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
Other long term employee benefits - The Company provides for encashment of leave or leave with pay subject to certain rules.
The Company makes provision for such compensated absences based on an actuarial valuation by an independent actuary at the year end, which is calculated using Project Unit Credit Method (PUCM). Actuarial gains and losses which comprise experience adjustment and the effect of change in actuarial assumptions are recognised in the Statement of Profit and Loss.
A liability is recognised for benefits accruing to employees in respect of wages and salaries, performance incentives and similar benefits other than compensated absences in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their 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 or sale. All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.
Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in Statement of Profit and Loss on a systematic basis over the periods in which the Company recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire noncurrent assets are recognised as deferred revenue in the Balance Sheet and transferred to Statement of Profit and Loss on a systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in Statement of Profit and Loss in the period in which they become receivable.
The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.
s. Foreign Currency Transactions
The management of the Company has determined Indian Rupee ("INR") as the functional currency of the Company. In preparing the Financial Statements of the Company, transactions in currencies other than the Company''s functional currency ("foreign currencies") are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to the equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus issue, bonus element in a rights issue and shares split 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 period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted
by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and their corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against those deductible temporary differences which can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets and liabilities relate to the income tax levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the current tax liabilities and assets on a net or simultaneous basis.
Current and deferred tax for the year
Current and deferred tax are recognised in Statement of Profit and Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
Ind AS 108 establishes standards for the way that public enterprises report information about operating segments and related disclosures about products, services, geographic areas, and major customers. Based on the ''management approach'' as defined in Ind AS 108, the company is required to present information in the manner which the Chief Operating Decision Maker ("CODM") evaluates the company''s performance and allocates resources. The analysis is generally based on an analysis of various performance indicators by business segments.
The accounting principles used in the preparation of the Financial Statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the relevant applicable accounting policies above. Revenue and identifiable operating expenses in relation to segments are categorized based on items that are individually identifiable to that segment.
Segment assets include all operating assets used by the business segments and consist principally of fixed assets, debtors and inventories. Segment liabilities include the operating liabilities that result from the operating activities of the business. Segment assets and liabilities that cannot be allocated between the segments are shown as part of unallocated corporate assets and liabilities respectively. Income / Expenses relating to the enterprise as whole and not allocable on a reasonable basis to business segments are reflected as unallocated corporate income / expenses. Inter- segment transfers are accounted at prevailing market prices.
3. Significant accounting judgments, estimates and assumptionsi. Fair value measurement of Financial Instruments
When the fair values of financials assets and financial liabilities recorded in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques which involve various judgements and assumptions.
ii. Estimation of net realizable value for inventories
Inventory is stated at the lower of cost and net realizable value (NRV). NRV for completed inventory is assessed by reference to market conditions and prices existing at the reporting date and is determined by the Company, based on comparable transactions identified.
iii. Impairment of non - financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
iv. Recoverability of trade receivables
In case of trade receivables, the Company follows the simplified approach permitted by Ind AS 109 - Financial Instruments for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from actual developments in the future.
These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
On March 31, 2023, Ministry of Corporate Affairs amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, which becomes effective from April 1, 2023. The gist of the amendments is as follows:
⢠Ind AS 1, Presentation of Financial Statements - It is specified when the accounting policy information is material, and the requirement to disclose significant accounting policies is substituted with the disclosure of material accounting policy information.
⢠Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors - The definition of "change in accounting estimate" is substituted with the definition of "accounting estimates". Accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty.
⢠Ind AS 12, Income Taxes - it is required to recognise deferred tax liability or asset for all temporary differences arising from initial recognition of an asset or liability in a transaction that gives rise to equal taxable and deductible temporary differences.
The above amendments will not have material impact on Company''s Financial Statements.
Mar 31, 2018
1 Significant Accounting Policies
1.1 Basis of preparation
The financial statements of the company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies(Indian Accounting Standards)(Amendment) Rules, 2016 and the relevant provisions of the Companies Act, 2013 (âthe Actâ).
For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements 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 (Indian GAAP). These financial statements for the year ended March 31, 2018 are the first the Company has prepared in accordance with Ind AS. Refer to Note 40 for information on how the company has adopted Ind AS.
The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount:
- Certain financial assets and liabilities measured at fair value or at amortised cost depending on the classification(refer accounting policy regarding financial instruments), - Employee defined benefit assets/(obligations) are recognised at the present value of the defined benefit obligations,
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.
2.2 Summary of significant accounting policies
(a) Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Freehold land are stated at cost. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.
Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it increases the future benefits from its previously assessed standard of performance. All other expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
Borrowing costs directly attributable to acquisition of property, plant and equipment which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets.
An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the Property, plant and equipment is derecognized.
Expenditure directly relating to construction activity is capitalized. Indirect expenditure incurred during construction period is capitalized to the extent to which the expenditure is indirectly related to construction or is incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which is neither related to the construction activity nor is incidental thereto is charged to the statement of profit and loss.
Costs of assets not ready for use at the balance sheet date are disclosed under capital work- in- progress.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated on written down value basis over the useful lives estimated by the management based on internal assessment as follows:
The Company, based on internal assessments, believes that the useful live as given above represents period over which the Management expects to use these assets. Hence, the useful lives for these assets is difference from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013
The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount. The residual values are not more than 5% of the original cost of the asset.
(b) Intangible assets
Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortization and accumulated impairment loss.
Subsequent expenditure is capitalized only when it increases the future economic benefits from the specific asset to which it relates. An intangible asset is derecognized on disposal or when no future economic benefits are expected from its use and disposal.
Losses arising from retirement and gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss.
Amortisation methods and periods
Intangible assets comprising of patents are amortized on a written down value basis over the useful life of five years which is estimated by the management.
The estimated useful lives of intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation method is revised to reflect the changed pattern, if any.
(c) Impairment of non financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
Impairment losses are recognized in the statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of the entity are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements are presented in Indian rupee (INR), which is entity''s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are recognised in statement of profit or loss.
(e) Financial Instruments
Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the Instruments.
Initial Recognition
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in Statement of Profit and Loss.
Classification and Subsequent Measurement: Financial Assets
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income (âFVOCIâ) or fair value through profit or loss (âFVTPLâ) on the basis of following:
- the entity''s business model for managing the financial assets and
- the contractual cash flow characteristics of the financial asset.
(i) Amortised Cost
A financial asset shall be classified and measured at amortised cost if both of the following conditions are met:
- the financial asset is held within a business model whose objective is to hold financial assets 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
A financial asset shall be classified and measured at fair value through OCI if both of the following conditions are met:
- the financial asset 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 or Loss
A financial asset shall be classified and measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through OCI. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification and Subsequent Measurement: Financial liabilities
Financial liabilities are classified as either financial liabilities at FVTPL or ''other financial liabilities''.
(i) Financial Liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL. Gains or Losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
(ii) Other Financial Liabilities:
Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. The Company recognises a loss allowance for expected credit losses on financial asset. In case of trade receivables, the Company follows the simplified approach permitted by Ind AS 109 - Financial Instruments for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.
Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Equity investment in associates
Investment in associates are carried at cost. Impairment recognized, if any, is reduced from the carrying value.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
(f) Financial liabilities and equity instruments Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Company are recognised at the proceeds received.
(g) Taxes
(i) Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income (OCI) or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
(ii) Deferred tax
Deferred income tax is recognized using the balance sheet approach, deferred tax is recognized on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
(iii) Minimum alternate Tax
MAT payable for a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available in the statement of profit and loss as deferred tax with a corresponding asset only to the extent that there is probability that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. The said asset is shown as ''MAT Credit Entitlement'' under Deferred Tax. The Company reviews the same at each reporting date and writes down the asset to the extent the Company does not have probable certainty that it will pay normal tax during the specified period.
(h) Inventories:
(a) Fertiliser Division:
Raw Materials and Stores and Spares are valued at lower of moving average cost or net realisable value.
Finished stocks are valued at cost or net realisable value whichever is lower.
(b) Construction Division:
Inventory comprises completed property for sale and property under construction (Construction Work-in-Progress).
i. Completed unsold inventory is valued at lower of cost and net realisable value. Cost is determined by including cost of land (at book value), materials, services and other related proportionate overheads.
ii. Work-in-progress is valued at lower of cost and net realisable value. Cost comprises cost of land (at book value),materials, services and other proportionate overheads related to projects under construction.
The valuation of inventories includes taxes, duties of non refundable nature and direct expenses and other direct cost attributable to the cost of inventory, net of excise duty/GST/ countervailing duty / education cess and value added tax.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. The net realizable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw materials and other supplies held for use in production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realizable value.
(I) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of third parties.
The Company collects taxes such as GST, sales tax/value added tax, service tax, etc on behalf of the Government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from the aforesaid revenue/ income.
The following specific recognition criteria must also be met before revenue is recognized:
(i) Sale of goods
Revenue from sale of manufactured and traded goods is recognised when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.
(ii) Interest income
Interest income, including income arising from other financial instruments measured at amortized cost, is recognized using the effective interest rate method.
(iii) Dividend income
Dividends are recognised when right to receive is established.
(iv) Construction and real estate development
Revenue from real estate is recognised on the transfer of all significant risks and rewards of ownership to the buyers by way of execution of documents. The Company has recognised the revenue on the basis of Percentage of Completion Method of accounting. Proportionate revenue is recognised in relation to sold area only. As per this method, revenue from sale of properties is recognised in the Statement of Profit and Loss in proportion to the actual cost incurred, subject to such actual costs being 25% or more of the total estimated cost. The company recognise revenue in accordance "Guidance Note on Accounting for Real Estate Transactions" (for entities to whom Ind AS is applicable).
Revenue from trading activity, in property as well as Transferable Development Rights (TDR), is recognized when significant risk and rewards of the property/TDR are transferred to the buyer, as demonstrated by transfer of physical possession and transfer of the title in the property/TDR.
(j) Employee Benefit Obligations:
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(ii) Post-employment obligations
The company operates the following post-employment schemes:
(a) defined benefit plans viz gratuity,
(b) defined contribution plans viz state governed provident fund scheme and employee pension scheme.
Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
Defined contribution plans
The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. The company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
(k) Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the company will comply with all attached conditions. Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
(l) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease.
The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
(i) As a lessee
A lease is classified at the inception date as a finance lease or an operating lease. Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company as lessee are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.
(ii) As a lessor
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
Lease income from operating leases where the company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
(m) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation.
A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non -occurrence of one or more uncertain future events not wholly within the control of the Company.
Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not disclosed as contingent liabilities.
Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognised.
(n) Borrowing Costs:
Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds and is measured with reference to the effective interest rate (EIR) applicable to the respective borrowing.
Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such asset till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.
(o) Segment Reporting - Identification of Segments
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the company''s chief operating decision maker to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the chief operating decision maker evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.
(p) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the company
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after income tax effect of interest and other financing costs associated with dilutive potential equity
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
(q) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
(r) Current/non current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the 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.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The company has identified twelve months as its operating cycle.
(s) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lakh as per the requirement of Schedule III, unless otherwise stated.
3 Significant accounting judgments, estimates and assumptions
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expense for the periods presented.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
(i) Revenue recognition and valuation of unbilled revenue
The Company uses the percentage-of-completion method for recognition of revenue, accounting for unbilled revenue and contract cost thereon for its real estate and contractual projects. The percentage of completion is measured by reference to the stage of the projects and contracts determined based on the proportion of contract costs incurred for work performed to date bear to the estimated total contract costs. Use of the percentage-of-completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Significant assumptions are required in determining the stage of completion, the extent of the contract cost incurred, the estimated total contract revenue and contract cost and the recoverability of the contracts. These estimates are based on events existing at the end of each reporting date.
(ii) Fair value measurement of Financial Instruments
When the fair values of financials assets and financial liabilities recorded in the financial statements cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques which involve various judgements and assumptions.
(iii) Estimation of net realizable value for inventories
Inventory is stated at the lower of cost and net realizable value (NRV).NRV for completed inventory is assessed by reference to market conditions and prices existing at the reporting date and is determined by the Company, based on comparable transactions identified.
(iv) Impairment of non - financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
(v) Recoverability of trade receivables
In case of trade receivables, the Company follows the simplified approach permitted by Ind AS 109 - Financial Instruments for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.
(vi) Useful lives of property, plant and equipment/intangible assets
The Company reviews the useful life of property, plant and equipment/intangible assets at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
(vii) Defined benefit plans
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Mar 31, 2016
OVERVIEW:
The Company is engaged in the business of construction and development of Residential & Commercial Complex and manufacture of Fertilizers.
1) SIGNIFICANT ACCOUNTING POLICIES
(A) Basis of Preparation of Financial Statements:
These financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 (''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and the provision of the Companies Act, 1956 (to the extent of applicable) and other accounting principles generally accepted in India, to the extent applicable.
(B) Use of Estimates:
The preparation of financial statement requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
(C) Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost except Single Super Phosphate Plant Buildings and Sulphuric Acid Plant Buildings which were revalued on 31stMarch, 2000, net of Cenvat and Value added tax less accumulated depreciation including impairment loss.
ii) Software is capitalized where it is expected to provide future enduring economic benefits. Capitalization cost includes license fees, cost of implementation/system, integration services & incidental expenses related to its acquisition.
iii) Depreciation on tangible fixed assets is provided on Written Down Value Method (WDV) over useful life of the assets estimated by the Management. Depreciation for assets purchases/sold during period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful life on a Written Down Value Method (WDV), commencing from the date the asset is available to the Company for its use. The Management estimates the useful lives for the fixed assets as follows:
* For these fixed assets based on internal assessments ,the management believes that the useful life as given above best represent period over which the Management expects to use these assets. Hence the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of Companies Act,2013.
Depreciation and amortization methods, useful lives and residual values are reviewed periodically including at each year end
(D) Investments:
Long Term Investments are carried at cost less provision, if any, for permanent diminution in value of such investments. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.
(E) Inventories:
a) Fertilizer Division:
i) Raw Materials and Stores & Spares are valued at cost.
ii) Finished stocks are valued at cost or net realizable value whichever is lower.
iii) The valuation of inventories includes taxes, duties of non refundable nature and direct expenses, and other direct cost attributable to the cost of inventory, net of excise duty, education cess and value added tax.
b) Construction Division:
Inventory comprises completed property for sale and property under construction (Construction Work-in-Progress).
i) Completed unsold inventory is valued at lower of cost and net realizable value. Cost is determined by including cost of land (at book value), materials, services and other related proportionate overheads.
ii) Work-in-progress is valued at lower of cost and net realizable value. Cost comprises cost of land (at book value), materials, services and other proportionate overheads related to projects under construction.
(F) Provision for Current tax and Deferred tax
i) Tax on Income for the current period is determined on the basis of taxable income and tax credits computed in accordance with relevant tax regulation and based on expected outcome of earlier year assessments/appeals.
ii) Deferred Tax resulting from âtiming differencesâ between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date.
iii) Deferred tax assets are recognized and carried forward to the extent that there is virtual certainty sufficient future taxable income will be available against which such deferred tax assets can be realized
(G) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Provisions are determined based on management estimates required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
(H) Segment policies
The Company''s reporting segments are identified based on activities/products, risk and reward structure, organization structure and internal reporting systems.
(I) Earnings per share (EPS)
The earnings considered in ascertaining the Company''s EPS is the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The weighted diluted earnings per equity share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period.
(J) Revenue Recognition:
i) Revenue from sale of manufactured and traded goods is recognized when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.
ii) Revenue from real estate is recognized on the transfer of all significant risks and rewards of ownership to the buyers by way of execution of documents. The Company has recognized the revenue on the basis of Percentage of Completion Method of accounting. Proportionate revenue is recognized in relation to sold area only. As per this method, revenue from sale of properties is recognized in the Statement of Profit and Loss in proportion to the actual cost incurred, subject to such actual costs being 25% or more of the total estimated cost. The company continues to recognize revenue in accordance with the Guidance Note on Recognition of Revenue by Real Estate Developers (Issued 2006) for the projects commenced before 1st April, 2012.
Determination of revenues under the percentage of completion method necessarily involves making estimates by the Company, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project / activity and the foreseeable losses to completion.
The estimates of saleable area are revised periodically by the management. The effect of such changes to estimates is recognized in the period such changes are determined.
iii) Dividends are recognized when the right to receive the same is established.
(K) Turnover
Turnover includes sale of goods, net of excise duty, service tax and value added tax.
(L) Employee Benefits:
a) Short term employee benefits:
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.
b) Post-employment benefits:
i) Defined contribution plans: The state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.
ii) Defined benefit plans: The employees'' gratuity liability is a defined benefit plan. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future cash flows.
(M) Cost of Construction/Development:
Cost of construction/development (including book value of land) incurred is charged to Profit & Loss Account proportionate to area sold and the balance cost is carried over under Inventory as part of Finished Goods Inventory/Work-in-Progress. Cost of construction / development includes all costs directly related to the Project Adjustments, if required, are made on completion of the respective projects.
(N) Excise Duty :
Excise duty has been accounted on the basis of payments made in respect of goods cleared. No excise duty provision has been made on closing inventory of finished goods. However there is no impact on profit / loss due to this non provision.
(O) Leased Assets:
Operating Leases: Assets acquired on lease where a significant portion of the risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease Rentals are charged to the Profit and Loss account on an accrual basis.
Mar 31, 2014
(A) Basis of Preparation of Financial Statements:
The financial statements have been prepared under the historical cost
convention except revaluation of Single Super Phosphate Plant Buildings
and Sulphuric Acid Plant Buildings, on an accrual basis of accounting,
in accordance with Generally Accepted Accounting Principles (GAAP)
accepted in India; accounting standards issued by the Institute of
Chartered Accountants of India, as applicable and as per the provisions
of Companies Act, 1956.
(B) Use of Estimates:
The preparation of financial statement requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and reported amount of
revenues and expenses during the reporting period. Difference between
the actual results and estimates are recognised in the period in which
the results are known / materialised.
(C) Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost except Single Super Phosphate Plant
Buildings and Sulphuric Acid Plant Buildings which were revalued on
31st March 2000, net of Cenvat and Value added tax less accumulated
depreciation including impairment loss.
ii) Software is capitalised where it is expected to provide future
enduring economic benefits. Capitalisation cost includes license fees,
cost of implementation/system, integration services & incidental
expenses related to its acquisition.
iii) Depreciation on Fixed Assets has been provided on Written Down
Value Method at the rates and in the manner prescribed in Schedule XIV
of the Companies Act, 1956.
(D) Investments:
Long Term Investments are carried at cost less provision, if any, for
permanent diminution in value of such investments. Provision for
diminution in the value of long-term investments is made only if such a
decline is other than temporary in the opinion of the management.
(E) Inventories:
a) Fertilser Division:
i) Raw Materials and Stores & Spares are valued at cost.
ii) Finished stocks are valued at cost or net realisable value
whichever is lower.
iii) The valuation of inventories includes taxes, duties of non
refundable nature and direct expenses, and other direct cost
attributable to the cost of inventory, net of excise duty, education
cess and value added tax.
b) Construction Division:
Inventory comprises completed property for sale and property under
construction (Construction Work-in-Progress).
i) Completed unsold inventory is valued at lower of cost and net
realisable value. Cost is determined by including cost of land (at book
value), materials, services and other related proportionate overheads.
ii) Work-in-progress is valued at lower of cost and net realisable
value. Cost comprises cost of land (at book value), materials, services
and other proportionate overheads related to projects under
construction.
(F) Provision for Current tax and Deferred tax
i) Tax on Income for the current period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act 1961, and based on expected outcome of
earlier year assessments/appeals.
ii) Deferred Tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the Balance Sheet date.
iii) Deferred tax assets are recognized and carried forward to the
extent that there is virtual certainty sufficient future taxable income
will be available against which such deferred tax assets can be
realised.
(G) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Provisions are determined based on management estimates required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current management
estimate. Contingent liabilities are not recognised but are disclosed
in the notes. Contingent assets are neither recognised nor disclosed
in the financial statements.
(H) Segment policies
The Company''s reporting segments are identified based on
activities/products, risk and reward structure, organization structure
and internal reporting systems.
(I) Earnings per share
The earnings considered in ascertaining the Company''s EPS is the net
profit after tax. The number of shares used in computing basic EPS is
the weighted average number of shares outstanding during the period.
The weighted diluted earnings per equity share are computed using the
weighted average number of equity shares and dilutive potential equity
shares outstanding during the period.
(J) Revenue Recognition:
i) Sales of goods of Manufacturing Division are recognised on
dispatches to the customers.
ii) Revenue from real estate is recognised on the transfer of all
significant risks and rewards of ownership to the buyers by way of
execution of documents. The Company has recognised the revenue on the
basis of Percentage of Completion Method of accounting. Proportionate
revenue is recognised in relation to sold area only. As per this
method, revenue from sale of properties is recognised in Profit and
Loss Account in proportion to the actual cost incurred as against the
total estimated cost of the project, subject to such actual costs being
30% or more of the total estimated cost.
iii) Dividends are recognised when the right to receive the same is
established.
(K) Turnover
Turnover includes sale of goods, net of excise duty, service tax and
value added tax.
(L) Employee Benefits:
a) Short term employee benefits:
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages, short term compensated absences etc.
and the expected cost of bonus, ex-gratia are recognised in the period
in which the employee renders the related service.
b) Post-employment benefits:
i) Defined contribution plans: The state governed provident fund
scheme, employee state insurance scheme and employee pension scheme are
defined contribution plans. The contribution paid/payable under the
schemes is recognised during the period in which the employee renders
the related service.
ii) Defined benefit plans: The employees'' gratuity liability is a
defined benefit plans. The present value of the obligation under such
defined benefit plans is determined based on actuarial valuation using
the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future
cash flows.
(M) Cost of Construction/Development:
Cost of construction/development (including book value of land)
incurred is charged to Profit & Loss Account proportionate to area
sold. Adjustments, if required, are made on completion of the
respective projects.
(N) Excise Duty
Excise duty has been accounted on the basis of payments made in respect
of goods cleared. No excise duty provision has been made on closing
inventory of finished goods.
(O) Leased Assets
Operating Leases: Assets acquired on lease where a significant portion
of the risk and rewards of ownership are retained by the lessor are
classified as operating leases. Lease Rentals are charged to the Profit
and Loss account on an accrual basis.
Mar 31, 2013
(A) Basis of Preparation of Financial Statements:
The financial statements have been prepared under the historical cost
convention except revaluation of Single Super Phosphate Plant Buildings
and Sulphuric Acid Plant Buildings, on an accrual basis of accounting,
in accordance with Generally Accepted Accounting Principles (GAAP)
accepted in India; accounting standards issued by the Institute of
Chartered Accountants of India, as applicable and as per the provisions
of Companies Act, 1956.
(B) Use of Estimates:
The preparation of financial statement requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and reported amount of
revenues and expenses during the reporting period. Difference between
the actual results and estimates are recognised in the period in which
the results are known / materialised.
(C) Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost except Single Super Phosphate Plant
Buildings and Sulphuric Acid Plant Buildings which were revalued on
31st March 2000, net of Cenvat and Value added tax less accumulated
depreciation including impairment loss.
ii) Software is capitalised where it is expected to provide future
enduring economic benefits. Capitalisation cost includes license fees,
cost of implementation/system, integration services & incidental
expenses related to its acquisition.
iii) Depreciation on Fixed Assets has been provided on Written Down
Value Method at the rates and in the manner prescribed in Schedule XIV
of the Companies Act, 1956.
(D) Investments:
Long Term Investments are carried at cost less provision, if any, for
permanent diminution in value of such investments. Provision for
diminution in the value of long-term investments is made only if such a
decline is other than temporary in the opinion of the management.
(E) Inventories:
a) Fertiiser Division:
i) Raw Materials and Stores & Spares are valued at cost.
ii) Finished stocks are valued at cost or net realisable value
whichever is lower.
iii) The valuation of inventories includes taxes, duties of non
refundable nature and direct expenses, and other direct cost
attributable to the cost of inventory, net of excise duty, education
cess and value added tax.
b) Construction Division:
Inventory comprises completed property for sale and property under
construction (Construction Work-in-Progress).
i) Completed unsold inventory is valued at lower of cost and net
realisable value. Cost is determined by including cost of land (at book
value), materials, services and other related proportionate overheads.
ii) Work-in-progress is valued at lower of cost and net realisable
value. Cost comprises cost of land (at book value), materials, services
and other proportionate overheads related to projects under
construction.
F) Provision for Current tax and Deferred tax
i) Tax on Income for the current period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions ofthe Income Tax Act 1961, and based on expected outcome of
earlieryearassessments/appeals.
ii) Deferred Tax resulting from "timing differences" between book
and taxable profit is accounted for using the tax rates and laws that
have been enacted or substantively enacted as on the Balance Sheet
date.
iii) Deferred tax assets are recognized and carried forward to the
extent that there is virtual certainty sufficient future taxable income
will be available against which such deferred tax assets can be
realised.
(G) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Provisions are determined based on management estimates required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current management
estimate. Contingent liabilities are not recognized but are disclosed
in the notes. Contingent assets are neither recognized nor disclosed in
the financial statements.
(H) Segment policies
The Company''s reporting segments are identified based on
activities/products, risk and reward structure, ganization structure
and internal reporting systems.
(I) Earnings per share
The earnings considered in ascertaining the Company''s EPS is the net
profit after tax. The number of shares used in computing basic EPS is
the weighted average number of shares outstanding during the period.
The weighted diluted earnings per equity share are computed using the
weighted average number of equity shares and dilutive potential equity
shares outstanding during the period.
(J) Revenue Recognition:
i) Sales of goods of Manufacturing Division are recognised on
dispatches to the customers.
ii) Revenue from real estate is recognised on the transfer of all
significant risks and rewards of ownership to the buyers by way of
execution of documents. The Company has recognised the revenue on the
basis of Percentage of Completion Method of accounting. Proportionate
revenue is recognised in relation to sold area only. As per this
method, revenue f-om sale of properties is recognised in Profit and
Loss Account in proportion to the actual cost incurred as against the
total estimated cost ofthe project, subject to such actual
(K) Turnover
Turnover includes sale of goods, net of excise duty, service tax and
value added tax.
(L) Employee Benefits:
a) Short term employee benefits:
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages, short term compensated absences etc.
and the expected cost of bonus, ex-gratia are recognised in the period
in which the employee renders the related service.
b) Post-employment benefits:
i) Defined contribution plans: The state governed provident fund
scheme, employee state insurance scheme and employee pension scheme are
defined contribution plans. The contribution paid/payable under the
schemes is recognised during the period in which the employee renders
the related service.
ii) Defined benefit plans: The employees gratuity liability is a
defined benefit plans. The present value of the obligation under such
defined benefit plans is determined based on actuarial valuation using
the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future
cash flows. The discount rate used for determining the present value
ofthe obligation under defined benefit plans, is based on the market
yield on government securities of a maturity period equivalent to the
weighted average maturity profile ofthe related obligations at the
Balance Sheet date.
(M) Cost of Construction/Development:
Cost of construction/development (including book value of land)
incurred is charged to Profit & Loss Account proportionate to area
sold. Adjustments, if required, are made on completion ofthe respective
projects.
(N) Allocation of Expenses:
Corporate employee remuneration, administration expenses and other
overheads are allocated on the basis of appropriate ratios.
(O) Excise Duty
Excise duty has been accounted on the basis of payments made in respect
of goods cleared. No excise duty provision has been made on closing
inventory of finished goods,
(P) Leased Assets
Operating Leases: Assets acquired on lease where a significant portion
of the risk and rewards of ownership are retained by the lessor are
classified as operating leases. Lease Rentals are charged to the Profit
and Loss account on an accrual basis.
Mar 31, 2012
(A) Basis of Preparation of Financial Statements:
The financial statements have been prepared under the historical cost
convention except revaluation of Single Super Phosphate Plant Buildings
and Sulphuric Acid Plant Buildings, on an accrual basis of accounting,
in accordance with Generally Accepted Accounting Principles (GAAP)
accepted in India; accounting standards issued by the Institute of
Chartered Accountants of India, as applicable and as per the provisions
of Companies Act, 1956.
(B) Use of Estimates:
The preparation of financial statement requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and reported amount of
revenues and expenses during the reporting period. Difference between
the actual results and estimates are recognised in the period in which
the results are known / materialised.
(C) Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost except Single Super Phosphate Plant
Buildings and Sulphuric Acid Plant Buildings which were revalued on
31st March 2000, net of Cenvat and Value added tax less accumulated
depreciation including impairment loss.
ii) Software is capitalised where it is expected to provide future
enduring economic benefits. Capitalisation cost includes license fees,
cost of implementation/system, integration services & incidental
expenses related to its acquisition.
iii) Depreciation on Fixed Assets has been provided on Written Down
Value Method at the rates and in the manner prescribed in Schedule XIV
of the Companies Act, 1956.
(D) Investments:
Long Term Investments are carried at cost less provision, if any, for
permanent diminution in value of such investments. Provision for
diminution in the value of long-term investments is made only if such a
decline is other than temporary in the opinion of the management.
(E) Inventories:
a) Fertilser Division:
i) Raw Materials and Stores & Spares are valued at cost.
ii) Finished stocks are valued at cost or net realisable value
whichever is lower.
iii) The valuation of inventories includes taxes, duties of non
refundable nature and direct expenses, and other direct cost
attributable to the cost of inventory, net of excise duty, education
cess and value added tax.
iv) Excise Duty has not been provided on Closing stock Inventory. This,
however do not have any impact on profit of the Company.
b) Construction Division:
Inventory comprises completed property for sale and property under
construction (Construction Work-in-Progress).
i) Completed unsold inventory is valued at lower of cost and net
realisable value. Cost is determined by including cost of land (at
book value), materials, services and other related proportionate
overheads.
ii) Work-in-progress is valued at lower of cost and net realisable
value. Cost comprises cost of land (at book value), materials, services
and other proportionate overheads related to projects under
construction.
(F) Provision for Current tax and Deferred tax
i) Tax on Income for the current period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act 1961, and based on expected outcome of
earlier year assessments/appeals.
ii) Deferred Tax resulting from "timing differences" between book
and taxable profit is accounted for using the tax rates and laws that
have been enacted or substantively enacted as on the Balance Sheet
date.
iii) Deferred tax assets are recognized and carried forward to the
extent that there is virtual certainty sufficient future taxable income
will be available against which such deferred tax assets can be
realised.
(G) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Provisions are determined based on management estimates required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current management
estimate. Contingent liabilities are not recognised but are disclosed
in the notes. Contingent assets are neither recognised nor disclosed in
the financial statements.
(H) Segment policies
The Company's reporting segments are identified based on
activities/products, risk and reward structure, organization structure
and internal reporting systems.
(I) Earnings per share
The earnings considered in ascertaining the Company's EPS is the net
profit after tax. The number of shares used in computing basic EPS is
the weighted average number of shares outstanding during the period. The
weighted diluted earning per equity share are computed using the
weighted average number of equity shares and dilutive potential equity
shares outstanding during the period.
(J) Revenue Recognition:
i) Sales of goods of Manufacturing Division are recognised on
dispatches to the customers.
ii) Revenue from real estate is recognised on the transfer of all
significant risks and rewards of ownership to the buyers by way of
execution of documents. The Company has recognised the revenue on the
basis of Percentage of Completion Method of accounting. Proportionate
revenue is recognised in relation to sold area only. As per this
method, revenue from sale of properties is recognised in Profit and
Loss Account in proportion to the actual cost incurred as against the
total estimated cost of the project, subject to such actual costs being
30% or more of the total estimated cost.
iii) Dividends are recognised when the right to receive the same is
established.
(K) Turnover
Turnover includes sale of goods, net of excise duty, service tax and
value added tax.
(L) Employee Benefits:
i) Short term employee Benefits: Short term employee Benefits are
recognized as an expenses at the undiscounted amount in the Profit and
Loss Account of the year in which related service is rendered.
(M) Cost of construction/development:
Cost of construction/development (including book value of land)
incurred is charged to Profit & Loss Account proportionate to area
sold. Adjustments, if required, are made on completion of the
respective projects.
(N) Allocation of Expenses:
Corporate employee remuneration, administration expenses and other
overheads are allocated on the basis of appropriate ratios.
(O) Excise Duty:
Excise duty has been accounted on the basis of payments made in respect
of goods cleared. No excise duty provision has been made on closing
inventory of finished goods.
p. Rights, preferences and restrictions attached to shares
Equity Shares:
The Company has only one class of shares referred to as equity shares
having a par value of 10/-. Each holder of equity shares is entitled to
one vote per share.
The Company declares and pays dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
During the year ended 31st March 2012 ,the amount of per share Interim
dividend recognised as distributions to equity shareholders was Rs.Nil
/-(P.Y.including final dividend Rs.Nil/-)
In the event of liquidation of the Company ,the holders of equity
shares will be entitled to receive remaining assets of the Company
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
Terms Condition of Repayment and Details of Securities are as under :
1. The loan is Repayable on demand.
2. Cash Credit loan is secured by hypothecation of stock of raw
material, semi-finished goods and finished goods, receivables (both
present and future)
3. Cash Credit loan is secured by hypothecation of goods covered by
bill supported by document to title of goods.
4. Cash Credit loan is secured by equitable mortgage on factory
Land(measuring 18.36 acre) and buildings situated at village Kharivali,
Tal-Wada, Dist-Thane.
5. Cash Credit loan is secured by hypothecation of Plant and machinery
and all other movable fixed assets of the Company already in possession
or to be in possession of the Company.
6. Cash Credit loan is secured by Personal guarantee of Shri Yogendra
D. Patel (Promoter Director) and Anjni Y. Patel (Promoter Director)
Mar 31, 2011
(A) Basis of Preparation of Financial Statements:
The financial statements have been prepared under the historical cost
convention except revaluation of Single Super Phosphate Plant Buildings
and Sulphuric Acid Plant Buildings, on an accrual basis of accounting,
in accordance with Generally Accepted Accounting Principles (GAAP)
accepted in India; accounting standards issued by the Institute of
Chartered Accountants of India, as applicable and as per the provisions
of Companies Act, 1956.
(B) Use of Estimates:
The preparation of financial statement requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and reported amount of
revenues and expenses during the reporting period. Difference between
the actual results and estimates are recognised in the period in which
the results are known / materialised.
(C) Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost except Single Super Phosphate Plant
Buildings
and Sulphuric Acid Plant Buildings which were revalued on 31st March
2000, net of Cenvat and Value added tax less accumulated depreciation
including impairment loss.
ii) Software is capitalised where it is expected to provide future
enduring economic benefits. Capitalisation cost includes license fees,
cost of implementation/system, integration services & incidental
expenses related to its acquisition.
iii) Depreciation on Fixed Assets has been provided on Written Down
Value Method at the rates and in the manner prescribed in Schedule XIV
of the Companies Act, 1956.
(D) Investments:
Long Term Investments are carried at cost less provision, if any, for
permanent diminution in value of such investments. Provision for
diminution in the value of long-term investments is made only if such a
decline is other than temporary in the opinion of the management.
(E) Inventories:
a) Fertilser Division:
i) Raw Materials and Stores & Spares are valued at cost.
ii) Finished stocks are valued at cost or net realisable value
whichever is lower.
iii) The valuation of inventories includes taxes, duties of non
refundable nature and direct expenses, and other direct cost
attributable to the cost of inventory, net of excise duty.education
cess and value added tax.
b) Construction Division:
Inventory comprises completed property for sale and property under
construction
(Construction Work-in-Progress).
i) Completed unsold inventory is valued at lower of cost and net
realisable value. Cost is determined by including cost of land (at book
value), materials, services and other related proportionate overheads.
ii) Work-in-progress is valued at lower of cost and net realisable
value. Cost comprises cost of land (at book value), materials, services
and other proportionate overheads related to projects under
construction.
(F) Provision for Current tax and Deferred tax
I) Tax on Income for the current period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act 1961, and based on expected outcome of
earlier year assessments/appeals.
ii) Deferred Tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantivelyer. acted as on the Balance Sheet date.
iii) Deferred tax assets are recognized and carried forward to the
extent that there is virtual certainty sufficient future taxable income
will be available against which such deferred tax assets can be
realised.
(G) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Provisions are determined based on management estimates required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current management
estimate. Contingent liabilities are not recognised but are disclosed
in the notes. Contingent assets are neither recognised nor disclosed in
the financial statements.
(H) Segment policies
The Company's reporting segments are identified based on
activities/products, risk and reward structure, organization structure
and internal reporting systems.
(I) Earnings per share
The earnings considered in ascertaining the Company's EPS is the net
profit after tax. The number of shares used in computing basic EPS is
the weighted average number of shares outstanding during the period.
The weighted diluted earnings per equity share are computed using the
weighted average number of equity shares and dilutive potential equity
shares outstanding during the period.
(J) Revenue Recognition:
I) Sales of goods of Manufacturing Division are recognised on
dispatches to the customers.
ii) Revenue from real estate is recognised on the transfer of all
significant risks and rewards of ownership to the buyers by way of
execution of documents. The Company hasrecognised the revenue on the
basis of Percentage of Completion Method of accounting.Proportionate
revenue is recognised in relation to sold area only. As per this
method, revenue from sale of properties is recognised in Profit and
Loss Account in proportion to the actual cost incurred as against the
total estimated cost of the project, subject to such actual costs being
30% or more of the total estimated cost.
iii) Dividends are recognised when the right to receive the same is
established.
(K) Turnover
Turnover includes sale of goods, net of excise duty, service tax and
sales tax.
(L) Employee Benefits:
i) Short term employee Benefits: Short term employee Benefits are
recognized as an expenses at the undiscounted amount in the Profit and
Loss Account of the year in which related service is rendered.
(M) Cost of construction/development:
Cost of construction/development (including book value of land)
incurred is charged to Profit & Loss Account proportionate to area
sold. Adjustments, if required, are made on completion of the
respective projects.
(N) Allocation of Expenses:
Common construction expenses are allocated on the basis of ratio of
area under construction of each building. Corporate employee
remuneration, administration expenses and other overheads are allocated
on the basis of turnover ratio of the respective divisions.
Mar 31, 2010
(A) Basis of Preparation of Financial Statements:
The financial statements have been prepared under the historical cost
convention except revaluation of Single Super Phosphate plant buildings
and Sulphuric Acid plant buildings, on an accrual basis of accounting,
in accordance with Generally Accepted Accounting Principles (GAAP)
accepted in India; accounting standards issued by the Institute of
Chartered Accountants of India, as applicable and as perthe provisions
of Companies Act, 1956.
(B) Use of Estimates:
The preparation of financial statement requires estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of financial statements and reported amount of
revenues and expenses during the reporting period. Difference between
the actual results and estimates are recognised in the period in which
the results are known / materialised.
(C) Fixed Assets and Depreciation:
i) Fixed Assets are stated at cost except Single Super Phosphate Plant
Buildings and
Sulphuric Acid Plant Buildings which were revalued on 31sl March 2000,
net of Cenvat and Value added tax less accumulated depreciation
including impairment loss. The assets, which cannot be used for
production, are written off.
ii) Software is capitalised where it is expected to provide future
enduring economic Capitalisation cost includes license fees, cost of
implementation/system, integration services & incidental expenses
related to its acquisition.
iii) Accounting for Goodwill is on the basis of Accounting for Fixed
Assets (AS-10).
iv) Depreciation on Fixed Assets has been provided on Written Down
Value Method at the rates and in the manner prescribed in Schedule XIV
of the Companies Act, 1956.
(D) Investments:
Long Term Investments are carried at cost less provision, if any, for
permanent diminution in value of such investments. Provision for
diminution in the value of long-term investments is made only if such a
decline is other than temporary in the opinion of the management.
(E) Inventories:
a) Fertilser Division:
i) Raw Materials and Stores & Spares are valued at cost.
ii) Finished stocks are valued at cost or net realisable value
whichever is lower.
iii) The valuation of inventories includes taxes, duties of non
refundable nature and direct expenses, and other direct cost
attributable to the cost of inventory, net of excise duty/counter
veiling duty/education cess and value added tax.
b) Construction Division:
Real estate under development comprises undivided interest in the
freehold land at book value and cost relating to construction. Cost is
determined by including cost of land (at book value), materials,
services and other related proportionate overheads.
(F) Provision for Current tax and Deferred tax
i) Tax on Income for the current period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act 1961, and based on expected outcome of
earlieryear assessments/appeals. ii) Deferred Tax resulting from
"timing differences" between book and taxable profit is accounted for
using the tax rates and laws that have been enacted and substantively
enacted as on the Balance Sheet date.
iii) Deferred tax assets are recognized and carried forward to the
extent that there is virtual certainty as the case may be that
sufficient future taxable income will be available against which such
deferred tax assets can be realised.
(G) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes. Contingent assets are neither recognised no." disclosed in the
financial statements.
(H) Revenue Recognition:
i) Sales of goods of Manufacturing Division are recognised on
dispatches to the customers.
ii) Dividends are recognised when the right to receive them is
established.
iii) The Company has recognised the revenue on the basis of Percentage
of Completion Method of accounting. Proportionate revenue is recognised
in relation to sold area only.
(I) Turnover
Turnover includes sale of goods, net of sales tax and excise duty.
(J) Retirement Benefits:
i) Companys contribution to provident fund and family pension fund are
charged to the Profit and Loss Account.
(k) Cost of construction/development:
Cost of construction/development (including book value of land) incurred
is charged to Profit & Loss Account proportionate to area sold.
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