Accounting Policies of India Gelatine & Chemicals Ltd. Company
Mar 31, 2023
[A] Corporate Information:
India Gelatine & Chemicals Limited (the ''Company'') is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange (BSE). The registered office of the company is located at 703/704, Shilp, Nr. Municipal Market, C.G. Road, Navrangpura, Ahmedabad-380009.
The company is engaged in the business of manufacturing of Ossein, Di-Calcium Phosphate (DCP) & Gelatine. The Company has wide market in local as well in exports market. The Company sells its products through established network.
The financial statements have been recommended for approval by the audit committee and is approved and adopted by the Board in their meeting held on May 22, 2023.
[B] SIGNIFICANT ACCOUNTING POLICIES:
a) Basis of Preparation:
(i) Compliance with Ind AS
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''Act'') read with of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
a. certain financial assets and liabilities that are measured at fair value or amortised cost;
b. defined benefit plans - plan assets are measured at fair value.
(iii) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.
(iv) Functional currency
The financial statements are presented in Indian rupee (''), which is Company''s functional and presentation currency.
(v) 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.
b) Key accounting estimates and judgements
The estimates and judgements used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known/ materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
c) Fair value measurement
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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, as described below, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Input that is significant to the value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
The Company''s management determines the policies and procedures for both recurring fair value measurement and for non-recurring measurement.
External valuers are involved for valuation of significant assets. Involvement of external valuers is decided upon annually by the management after discussion with and approval by the Board of directors. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The management decides, after discussions with the Company''s external valuers, which valuation techniques and inputs to use for each case.
At each reporting date, the management analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company''s accounting policies. For this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.
The management, in conjunction with the Company''s external valuers, also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable on yearly basis.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
d) Property, Plant & Equipment:
Freehold lands are carried at cost. Property, plant and equipment are stated at cost, net of recoverable taxes, less depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and other cost directly attributable to the acquisition of the items.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
All expenditure incurred towards fixed assets including expenditure incurred during construction / new projects are accumulated and shown as capital work in progress and not depreciated until such assets are ready for commercial use.
Capital work in progress is stated at cost incurred during the construction/installation period relating to items or projects in progress.
Depreciation methods, estimated useful lives and residual value
Depreciation is provided on a Straight Line Method over the estimated useful lives of assets.
The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II to the Act, and management believe that useful life of assets are same as those prescribed in Schedule II to the Act, except for plant and machinery for which based on an independent technical evaluation, life has been estimated as 18 years (on multiple shift basis). Life for plant and machinery for solar project has been estimated as 25 years based on technical evaluation done by the management''s expert in order to reflect the actual usage of the asset.
Useful life considered for calculation of depreciation for various assets class are as follows-
Factory Building 30 years
Non- Factory Building 60 years
Plant and Machinery 18/25 years
Furniture and Fixtures 10 Years
Office Equipment 5 Years
Vehicles 8 Years
The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.
e) Intangible Assets
Intangible assets acquired separately are stated at cost less accumulated amortization / accumulated impairment loss, if any. Computer Software for internal use, which is primarily acquired from third-party vendors is capitalized. Subsequent costs associated with maintaining such software are recognized as expense as and when incurred.
Amortization method and useful life
The Company amortizes computer software and other intangible assets using the straight-line method over the period of 3 years for software and 6 years for network related items.
f) Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, cash at bank, deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
g) Inventories:
Items of inventories of Raw Material, Finished goods, Spares and Stores, Packing Material, etc. are valued at lower of cost or net realizable value except waste which is valued at estimated net realizable value. However materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition. Cost is determined on a FIFO basis.
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. Obsolete, slow-moving and defective inventories are identified by management and wherever necessary, provision is created for such inventories.
h) Financial Instruments - initial recognition and subsequent measurement :
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
> Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial assets. Trade receivables that do not contain a significant financing component are measured at the transaction price determined under Ind AS 115.
> Subsequent measurement
For purposes of subsequent measurement, the Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and
⢠those measured at amortised cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
> Impairment of financial assets
The Company measures the expected credit loss associated with its assets based on historical trend, industry practices and the business environment in which the entity operates or any other appropriate basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
> De-Recognition of Financial Asset
The Company derecognizes a financial asset when the rights to receive cash flows from the set have expired or it transfers the right to receive the contractual cash flow on the financial assets in a transaction in which substantially all the risk and rewards of ownership of the financial asset are transferred.
> Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings.
> Subsequent measurement of financial liabilities
The measurement of financial liabilities depends on their classification, as described below:
⢠Financial liabilities at fair value through profit or loss or
⢠Financial liabilities at amortised cost.
> De-Recognition of Financial Liability
A financial liability is derecognised 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 recognised in the statement of profit and loss.
iii. 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.
i) Segment Reporting:
The Company''s Chief Operating Decision Maker (CODM) examines the Company''s performance from business and geographic perspective. In accordance with Ind AS-108 - Operating Segments, evaluation by the CODM and based on the nature of activities performed by the Company, which primarily relate to manufacturing of Ossein, Di-Calcium Phosphate (DCP), Collagen & Gelatine, the Company does not operate in more than one business segment.
j) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
k) Provisions, Contingent liabilities and Contingent Assets
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. 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.
l) Revenue recognition
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Company''s activities as described below
Sale of goods
Revenue from sale of goods is recognised when control of the products being sold is transferred to our customers and there are no longer any unfulfilled obligations. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.
Sale of Service Income is recognised on rendering of related services.
The Company recognises provision for sales return, on the basis of mutual satisfaction which is measured at the Sales value excluding taxes & duties.
Other operating revenue:
Export Incentives under various schemes are accounted in the year in which right to receive is irrevocably established.
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.
Interest received on delayed payment is accounted on receipt basis.
Revenue in respect of insurance/other claims, etc., is recognized only when it is reasonably certain that the ultimate collection will be made.
Dividends are generally recognised in the Statement of Profit and Loss only when the right to receive payment is established.
m) Employee benefits
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.
Other long-term employee benefit obligations
The liabilities for earned leave and sick leave that are not expected to be settled wholly within 12 months are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.
Post-employment obligations
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund.
Defined Benefit obligations
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan 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 as per Requirement of Ind AS -19 - Employee Benefit.
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.
Defined Contribution Plans such as Provident Fund, etc., are charged to the Statement of Profit and Loss as incurred.
Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Company recognises termination benefits at the earlier of the following dates: (a) when the Company can no longer withdraw the offer of those benefits; and (b) when the Company recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
n) Foreign Currency Transactions:
(i) Functional and presentation currency
The financial statements are presented in Indian rupee (''), which is Company''s functional and presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.
Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company recognises a Right-of-Use (ROU) asset and a lease liability at the lease commencement date. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payment made at or before the commencement date, plus any initial direct cost incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentive received.
The ROU asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the ROU asset or the end of the lease term. The estimated useful lives of ROU assets are determined on the same basis as those of Property, Plant and Equipment. In addition, the ROU asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Short-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 that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as expenses on a straight-line basis over the lease term.
p) Income taxes
The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are excepted to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are off set where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
q) Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing:
⢠the profit attributable to owners of the Company
⢠weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
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 shares, and
⢠the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
r) Cash Flow Statement
The Cash Flow statement is prepared by the âIndirect methodâ set out in Ind AS-7 on âCash Flow Statement" and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash Equivalent presented in the cash flow statement consist of cash on hand and demand deposits with banks.
s) Impairment of Assets:
The Company assesses at each reporting date whether there is an indication that a non-financial asset may be impaired based on internal/external factors. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable Value. An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been a change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
t) Assets held for Sale:
Non-current assets held for sale are measured at the lower of its carrying value or fair value less costs to sell. Non-current assets held for sale are not depreciated or amortised.
The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sale will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification.
Property, plant and equipment are not depreciated once classified as held for sale. Assets and liabilities classified as held for sale are presented separately in the balance sheet.
u) Exceptional items
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the company. These material items of income or expense have to be shown separately due to their nature or incidence.
[C] Recent Accounting Pronouncements issued but not yet effective
The Ministry of Corporate Affairs has vide notification dated March 31,2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 (the ''Rules'') which amends certain accounting standards, and are effective April 1,2023. The Rules predominantly amends Ind AS 1 - âPresentation of financial statementsâ and Ind AS 12 -âIncome taxesâ, whereas the other amendments notified by these rules are primarily in the nature of clarifications. As per the Management''s assessment, these amendments are not expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions.
Mar 31, 2018
SIGNIFICANT ACCOUNTING POLICIES
1. Corporate Information:
India Gelatine & Chemicals Limited (the ''Company'') is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange (BSE). The registered office of the company is located at Navrangpura, Ahmedabad.
The company is engaged in the business of manufacturing of Ossein, Di Calcium Phosphate (DCP) & Gelatine. The Company has wide market in local as well in exports market. The Company sells its products through established network.
The financial statements have been recommended for approval by the audit committee and is approved and adopted by the Board in their meeting held on 25-05-2018.
2. Basis of Preparation: Compliance with Ind AS
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''Act'') read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
These financial statements for the year ended 31" March, 2018 are the first financial statements with comparatives, prepared under Ind AS. For all previous periods including the year ended 31" March, 2017, the Company had prepared its financial statements in accordance with the accounting standards notified under Companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as ''Previous GAAP'') used for its statutory reporting requirement in India.
The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1 "April, 2016 being the date of transition to Ind AS.
3. Summary of Significant Accounting Policies:
3.1 Historical cost convention:
The financial statements have been prepared on a historical cost basis, except for the following:
(1) certain financial assets and liabilities that are measured at fair value or amortized cost;
(2) defined benefit plans - plan assets are measured at fair value.
Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle (twelve months) and other criteria set out in the Schedule 111 to the Act. 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.
3.2 Use of Estimates:
The estimates and judgements used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
3.3 Property, Plant & Equipment:
The Company has applied for the one time transition exemption of considering the carrying cost on the transition datei.e.April 1,2016 as the deemed cost under INDAS. Hence regarded thereafter as historical cost.
Freehold land are carried at cost. Property, plant and equipment are stated at cost, net of recoverable taxes, less depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and other cost directly attributable to the acquisition of the items.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value
Depreciation is provided on a Straight Line Method over the estimated useful lives of assets.
The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II to the Act, and management believe that useful life of assets are same as those prescribed in Schedule II to the Act.
Useful life considered for calculation of depreciation for various assets class are as follows:
|
Asset Class |
Useful Life |
|
Factory Building |
30 years |
|
Non- Factory Building |
60 years |
|
Plant and Machinery |
1 8 years |
|
Furniture and Fixtures |
10 years |
|
Office Equipment |
5 years |
|
Vehicles |
8 years |
The residual values are not more than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period''.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.
Intangible Assets
Computer software are stated at cost, less accumulated amortisation and impairments, if any.
Amortisation method and useful life
The Company amortizes computer software using the straight-line method over the period of 3 years for software and 6 years for network related items.
3.4 Inventories:
Items of inventories of Raw Material, Finished goods, Spares and Stores, Packing Material etc. are valued at lower of cost or net realizable value except waste which is valued at estimated net realizable value. Cost of inventories comprise of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.
3.5 Cash and Cash Equivalents:
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
3.6 Financial Instruments (IND AS 109):
i. Recognition and initial measurement
All financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
ii. Classification and subsequent measurement
Financial assets
On initial recognition, a financial asset is classified as measured at amortized cost; ⢠Fair Value through Other Comprehensive Income (FVOCI) - equity investment; or Fair Value Through Profit and Loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
⢠the asset is held within a business model whose objective is to hold assets 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.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI. (designated as FVOCI - equity investment). This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI or at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on de-recognition is also recognized in profit or loss.
De-recognition Financial assets
The company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
If the company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
Financial liabilities
The company de-recognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The company also de-recognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognized in profit or loss.
Off-setting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
3.7 Revenue recognition:
Revenue is measured at the value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty (upto June 2017) and net of returns, trade allowances, rebates, discounts, value added taxes and amounts collected on behalf of third parties.
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the Company''s activities as described below.
Sale of goods
Sales are recognised when substantial risk and rewards of ownership are transferred to customer, In case of domestic customer, generally sales take place when goods are despatched or delivery is handed over to transporter. In case of export customers, generally sales take place when goods are shipped onboard based on bill of lading.
Other revenue:
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.
Revenue in respect of insurance / other claims etc, is recognized only when it is reasonably certain that the ultimate collection will be made.
3.8 Goods and Service Tax/Service Tax Input Credit:
Goods and Service tax / Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilising the credits.
3.9 Foreign Currency Transactions:
The financial statements are presented in Indian rupee (INR), which is Company''s functional and presentation currency.
Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing on the date of the balance sheet. All exchange differences other than those relating to the acquisition of fixed assets from outside India are dealt with in the Statement of Profit and Loss. Exchange gain or loss relating to fixed assets acquired from outside India is adjusted in the cost of respective fixed assets. â¢''
In case of forward contracts, the gain / loss on contracts are treated as periodical expense or revenue. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year, except in case of a forward exchange contract relating to liabilities incurred for acquiring fixed assets from outside India, in which case, such profit or loss is adjusted in the cost of fixed assets.
Exchange difference is calculated as the difference between the foreign currency amount of the contract translated at the exchange rate at the reporting date, or the settlement date where the transaction is settled during the reporting period, and the corresponding foreign currency amount translated at the later of the date of inception of the forward exchange contract and the last reporting date. Such exchange differences are recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change.
3.10 Income tax:
Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive income.
(a) Current Tax
Current tax includes provision for Income Tax computed under Special provision (i.e., Minimum alternate tax) or normal provision of Income Tax Act. Tax on Income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments / appeals.
(b) Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the 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, unabsorbed losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and unabsorbed depreciation can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date 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 assets and liabilities 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 balance sheet date. 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 reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
(c) Minimum Alternate Tax (MAT)
MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised, it is credited to the Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time.
3.11 Provisions, Contingent Liability:
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or mpre uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.
3.12 Employee benefits:
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.
Other long-term employee benefit obligations
The liabilities for earned leave and sick leave that are not expected to be settled wholly within 12 months are measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method.
Post-employment obligations
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund.
Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan 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.
Gratuity liability of employees is funded with the approved gratuity trusts.
Defined Contribution Plans
Defined Contribution Plans such as Provident Fund, etc., are charged to the Statement of Profit and Loss as incurred.
3.13 Earnings per share: Basic earnings per share
Basic earnings per share is calculated by dividing: the profit attributable to owners of the Company average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
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 shares, and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
3.14 Cash Flow Statement:
The Cash Flow statement is prepared by the "Indirect method" set out in Ind AS-7 on "Cash Flow Statement" and presents the cash flows by operating, investing and financing activities of the Company. Cash and cash Equivalent presented in the cash flow statement consist of cash on hand and demand deposits with banks.
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of Financial Statements to evaluate changes in Liabilities arising from financing activities, inducing both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.
3.15 Export Incentive:
Export incentives under various schemes notified by government are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.
3.16 Impairment of Assets:
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable Value. An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been a change in the estimate of recoverable amount.
3.17 Events occurring after the balance sheet date (IND AS 10):
Assets and liabilities are adjusted for events occurring after the reporting period that provides additional evidence to assist the estimation of amounts relating to conditions existing at the end of the reporting period.
Dividends declared by the Company after the reporting period are not recognized as liability at the end of the reporting period. Dividends declared after the reporting period but before the issue of financial statements are not recognized as liability since no obligation exists at that time. Such dividends are disclosed in the notes to the financial statements.
Mar 31, 2016
SIGNIFICANT ACCOUNTING POLICIES:
1) Basis of Accounting:
The Financial Statements are prepared under the historical cost convention as a going concern and on accrual basis in accordance with the generally accepted accounting principles, the Accounting Standards Issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 2013 (The Act).
2) Use of Estimates:
The presentation of Financial Statements require estimates and disclosure of contingent liabilities assumptions to be made that affect the reported amount of Assets and Liabilities on the date of the financial statements and the 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.
3) Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction, net of cenvat credit, including incidental expenses related to acquisition and installation and financing costs till the commencement of commercial production and adjustments arising from exchange rate variation relating to borrowings attributable to fixed assets, less accumulated depreciation.
Free hold land is stated at cost
4) Depreciation:
1. (a) The Company''s Plant at Vapi is Continuous Process Plant, The Company has provided depreciation in respect of Plant and Machinery and Equipments at Vapi Plankton the basis of technical valuation carried out on useful life determined by Government approved registered Valuer.
(b) Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II in respect of assets other than Plant and Machineries, Equipments at Vapi Plant. Accordingly, the unamortized carrying value is being depredated / amortized over the revised/ remaining useful lire of particular assets.
5) Inventories:
Items of Inventories ara valued on the FIFO/Specific Weighted Average Cost and on the basis given below :
a) Stores and Spares, Packing At cost or net realizable value, whichever is lower . Materials, Fuel & Loose tools -
b) Raw Materials - At cost or net realizable value, whichever is lower
c) Work-in-Process - At castanet realizable value, whicheverâs lower
d) Finished Goods - At costornet realizable value, whicheverâs lower
Costs of inventories comprise of all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
6) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. Qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.
7) Investments:
Long Term Investments are earned at cost less provision for permanent diminution, if any, in value of such investments,
8) Employees Benefits:
Short term employee benefits (which are payable within 12 months after the end of the period in which the employees render service) are measured at cost.
Long-term employee benefits (which are payable after the end of 12 months from the end of the period in which the employees render service) and post employment benefits (benefits which are payable after completion of employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of Actuarial Valuation.
Contribution to provident fund a defined contribution plan Is made In accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit plans are deter mind using Projected Unit Credit Method on the basis of Actuarial valuation.
9) Impairment of Assets:
The company on an Annual basis makes an assessment of any indicator that may lead to Impairment of Assets. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount is less than the carrying amount, then the carrying amount is reduced to Its recoverable amount by creating the difference as Impairment loss & is charged to the Statement of Profit & Loss.
10) Excise duty and Cenvat Credit:
Excise Duty payable on finished goods is accounted for on clearance of goods. Cenvat credit on Capital goods and Inputs is accounted for on the date of actual receipt of the same, respectively.
11. Foreign Currency Transactions:
(a) Initial recognition:
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency of the date of the transaction.
(b) Conversion:
Foreign currency monetary items are reported using the closing rate. Non-monetary Hems which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate of the date of the transaction; and non-monetary Items which are carried of fairvelue or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
(c) Exchange differences:
Exchange difference arising on the settlement of monetary Items or on reporting Companyâs monetary items of rates different from those of which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they erase.
(d) Forward Exchange Contracts not intended for trading:
The premium or discount arising of the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
12) Revenue Recognition:
Income and Expenditure are recognized and accounted on Accrual Basis. Revenue from Sale of goods is recognized on delivery of the goods, when all significant contractual obligations have been satisfied, the property in the goods is transferred fora price, significant risks and rewards of ownership are transferred to customers and no effective ownership is retained. However
(a) Revenue in respect of insurance/other claims etc., is recognized only when it is reasonably certain that the ultimate collection will be made.
(b) Export incentives in rasped of exports made under the MEiS Scheme is being accounted for on transfer.
(c) interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rata of interest.
13) Segment Accounting:
The Company deals in only one product segment i.e. Chemical Products and hence requirements of AS-17 ''Segment Reporting" issued by ICAI are not applicable.
14) Earnings Per Share:
The earnings considered in ascertaining the Companyâs EPS comprises of the net profit after tax (and includes the post tax effect of any extra ordinary item). The number of shares used in computing Basic EPS is the weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders by the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
15) Taxation:
(a) Direct Taxes:
Tax expense for the year, comprising of Current Tax and Deferred Tax is included in determining the net profit for the year.
A provision is made for the current tax based on tax liability computed in accordance with relevant tax rates and tex laws. A provision is made for deferred tax for all timing differences arising between taxable income and accounting income at currently enacted tax rates.
Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of there respective carrying values at each Balance Sheet date.
(b) Indirect Taxes:
The liabilities are provided or considered as contingent depending upon the merit of each case and/or receiving the actual demand from the department.
16) Cash Flow Statement:
The Cash Flow Statement is prepared by the âindirect method" set out in Accounting Standard 3 on âCash Flow Statement" and presents the cash flows by operating, Investing and financing activities of the Company.
Cash and Cash Equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.
17) Provisions and Contingent Liabilities:
A provision is recognized when the company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. A contingent liability is disclosed when the company has a possible or present obligation where it is not -probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed in the Financial Statements.
Mar 31, 2015
1. Basis of Accounting:
The Financial Statements are prepared under the historical cost
convention as a going concern and on accrual basis accordance with the
generally accepted accounting principles, the Accounting Standards
issued by the Institute of Chartered Accountants of India and the
relevant provisions of the Companies Act, 2013 (The Act),
2. Use of Estimates:
The presentation of Financial Statements require estimates and
disclosure of contingent liabilities assumptions to be made that affect
the reported amount of Assets and Liabilities on the date of the
financial statements and the 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.
3. Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction, net of
cenvat credit, including incidental expenses related to acquisition and
installation and financing costs till the commencement of commercial
production and adjustments arising from exchange rate variation
relating to borrowings attributable to fixed assets, less accumulated
depreciation.
Free hold land is stated at cost.
4. Depreciation:
1. (a) The Company's Plant at Vapi is Continuous Process Plant. The
Company has provided depreciation in respect of Plant and Machinery and
Equipments on the basis of tachnical valuation carried out on useful
life as determined by Government approved registered Valuer.
(b) Pursuant to the enactment of Companies Act 2013, the company has
applied the estimated useful lives as specified in Schedule II in
respect of assets other than Plant and machineries, Equipments at Vapi
Plant. Accordingly, the unamortised carrying value is being depreciated
/ amortised over the revised/ remaining useful life of particular
assets.
5. Inventories:
Itams of inventories are valued on the FIFO/Specific Weighted Avarage
Cost and on the basis given below :
a) Stores and Spares, Packing Atcostornet realizable value, whicheveris
lower
Materials, Fuel & Loose tools -
b) Raw Materials - At cost or net realizable value, whichever is lower
c) Work-in-Process - At cost or net realizable value, whicheveris lower
d) Finished Goods - Atcostornetrealizable value, whicheveris lower
Costs of inventories comprise of all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
6. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
7. Investments:
Long Term Investments are carried at cost less provision for permanent
diminution, if any, in value of such investments.
8. Employees Benefits:
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit Method on the basis of Actuarial Valuation.
Contribution to provident fund a defined contribution plan is made in
accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determind using Projected Unit Credit Method on the basis of
Actuarial valuation.
9. Impairment of Assets:
The company on an Annual basis makes an assessment of any indicator
that may lead to impairment of Assets. If any such indication exists,
the company estimates the recoverable amount of the assets. If such
recoverable amount is less than the carrying amount, then the carrying
amount is reduced to its recoverable amount by creating the difference
as impairment loss & is charged to the Statement of Profit & Loss.
10. Excise duty and Cenvat Credit:
Excise Duty payable on finished goods is accounted for on clearance of
goods. Cenvat credit on Capital goods and Inputs is accounted for on
the date of actual receipt of the same, respectively,
11. Foreign Currency Transactions:
(a) Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
(b) Conversion:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(c) Exchange differences:
Exchange difference arising on the settlement of monetary items or on
reporting Company's monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
(d) Forward Exchange Contracts not intsnded for trading:
The premium or discount arising of the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
12. Revenue Recognition:
Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from Sale of goods is recognized on delivery of the goods, when
all significant contractual obligations have been satisfied, the
property in the goods is transferred fora price, significant risks and
rewards of ownership are transferred to customers and no effective
ownership is retained. Howeven
(a) Revenue in respect of insurance/other claims etc., is recognized
only when it is reasonably certain that the ultimate collection will be
made.
(b) Export Incentives in respect of exports made under the Duty
Entitlement Pass Book Scheme is being accounted for on transfer.
(c) Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable rate of
interest.
13. Segment Accounting:
The Company deals in only one product segment i.e. Chemical Products
and hence requirements of AS-17 "Segment Reporting" issued by ICAI
are not applicable.
14. Earnings Per Share;
The earnings considered in ascertaining the Company's EPS comprises of
the net profit after tax (and includes the post tax effect of any extra
ordinary item). The number of shares used in computing Basic EPS is the
weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders by the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
15. Taxation:
(a) Direct Taxes:
Tax expense for the year, comprising of Current Tax and Deferred Tax is
included in determining the net profit for the year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each Balance
Sheet date.
(b) Indirect Taxes:
The liabilities are provided or considered as contingent depending upon
the merit of each case and/or receiving the actual demand from the
department.
16. Cash Flow Statement:
The Cash Flow Statement is prepared by the 'indirect method" set out
in Accounting Standard 3 on "Cash Flow Statement1 and presents the cash
flows by operating, investing and financing activities of the Company.
Cash and Cash Equivalents presented in the Cash Flow Statement consist
of cash on hand and demand deposits with banks.
17. Provisions and Contingent Liabilities:
A provision is recognized when the company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, In respect of which a
reliable estimate can be made. A contingent liability is disclosed when
the company has a possible or present obligation where it is not
probable that an outflow of resources will be required to settle it.
Contingent assets are neither recognized nor disclosed in the Financial
Statements.
Mar 31, 2014
1. Basis of Accounting:
The Financial Statements are prepared under the historical cost
convention as a going concern and on accrual basis accordance with the
generally accepted accounting principles, the Accounting Standards
issued by the Institute of Chartered Accountants of India and the
relevant provisions of the Companies Act, 1956 (The Act).
2. Use of Estimates:
The presentation of Financial Statements require estimates and
disclosure of contingent liabilities assumptions to be made that affect
the reported amount of Assets and Liabilities on the date of the
financial statements and the 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.
3. Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction, net of
cenvat credit, including incidental expenses related to acquisition and
installation and financing costs till the commencement of commercial
production and adjustments arising from exchange rate variation
relating to borrowings attributable to fixed assets, less accumulated
depreciation.
Free hold land is stated at cost
4. Depreciation:
The Company has continued to provide depreciation on straight line
method at the revised rates on the original cost of the assets as per
circular dated 20.12.93. In respect of other assets for which rates are
not revised, the Company has continued to provide depreciation on
straight line method as specified in schedule XIV of the Companies Act,
1956.
Leasehold Land is amortized overthe period of lease.
5. Inventories:
Items of inventories are valued on the FIFO/Specific Weighted Average
Cost and on the basis given below:
a) Stores and Spares, Packing At cost or net realizable value,
whichever is lower Materials, Fuel & Loose tools
b) Raw Materials - At cost or net realizable value, whichever is lower
c) Work-in-Process - At cost or net realizable value, whichever is
lower
d) Finished Goods - At cost or net realizable value, whichever is lower
Costs of inventories comprise of all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
6. Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All
other-borrowing costs are charged to revenue.
7. Investments:
Long Term Investments are carried at cost less provision for permanent
diminution, if any, in value of such investments.
8. Employees Benefits:
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit Method on the basis of Actuarial Valuation.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2014.
Contribution to provident fund a defined contribution plan is made in
accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determind using Projected Unit Credit Method on the basis of
Actuarial Valuation.
9. Impairment of Assets:
The company on an Annual basis makes an assessment of any indicator
that may lead to impairment of Assets. If any such indication exists,
the company estimates the recoverable amount of the assets. If such
recoverable amount is less than the carrying amount, then the carrying
amount is reduced to its recoverable amount by creating the difference
as impairment loss & is charged to the Statement of Profit & Loss.
10. Excise duty and Cenvat Credit:
Excise Duty payable on finished goods is accounted for on clearance of
goods. Cenvat credit on Capital goods and Inputs is accounted for on
the date of actual receipt of the same, respectively.
11. Foreign Currency Transactions:
(a) Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
(b) Conversion:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are earned in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(c) Exchange differences:
Exchange difference arising on the settlement of monetary items or on
reporting Company''s monetary items of rates different from those of
which they were initially recorded during the year, or reported in -
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
(d) Forward Exchange Contracts not intended fortrading:
The premium or discount arising of the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
12. Revenue Recognition:
L Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from Sale of goods is
recognized on delivery of the goods, when all significant contractual
obligations have been satisfied, the property in the goods is
transferred for a price, significant risks and rewards of ownership are
transferred to customers and no effective ownership is retained.
However.
(a) Revenue in respect of insurance/other claims etc., is recognized
only when it is reasonably certain that the ultimate collection will be
made.
(b) Export Incentive of duty credit scrip of Incremental Export
Incentivisation Scheme (IEIS) on annual basis is being accounted for on
utilization of scrip.
(c) Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable rate of
interest.
13. Segment Accounting:
The Company deals in only one product segment i.e. Chemical Products
and hence requirements of AS-17 "Segment Reporting" issued by ICAI are
not applicable.
14. Earnings Per Share:
The earnings considered in ascertaining the Company''s EPS comprises of
the net profit aftertax (and includes the post tax effect of any extra
ordinary item). The number of shares used in computing Basic EPS is the
weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders by the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
15. Taxation:
(a) Direct Taxes:
Tax expense for the year, comprising of Current Tax and Deferred Tax is
included in determining the net profit fortheyear.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each Balance
Sheet date.
(b) Indirect Taxes:
The liabilities are provided or considered as contingent depending upon
the merit of each case and/or receiving the actual demand from the
department.
16. Cash Flow Statement:
The Cash Flow Statement is prepared by the "indirect method" set out in
Accounting Standard 3 on "Cash Flow Statement" and presents the cash
flows by operating, Investing and financing activities of the Company.
Cash and Cash Equivalents presented in the Cash Flow Statement consist
of cash on hand and demand deposits with banks.
17. Provisions and Contingent Liabilities:
A provision is recognized when the company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. A contingent liability is disclosed when
the company has a possible or present obligation where it is not
probable that an outflow of resources will be required to settle it.
Contingent assets are neither recognized nor disclosed in the Financial
Statements.
Mar 31, 2013
1) Basis of Accounting:
The financial statements are prepared under the historical cost
convention as a going concern and on accrual basis accordance with the
generally accepted accounting principles, the Accounting Standards
issued by the Institute of Chartered Accountants of India and the
relevant provisions ofthe Companies Act, 1956 (The Act).
2) Use of Estimates:
The presentation offinancial statements require estimates and
disclosure of contingent liabilities assumptions to be made that affect
the reported amount of Assets and Liabilities on the date of the
Financial Statements and the 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.
3) Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction, net of
cenvat credit, including incidental expenses related to acquisition and
installation and financing costs till the commencement of commercial
production and adjustments arising from exchange rate variation
relating to borrowings attributable to fixed assets, less accumulated
depreciation.
Free hold land is stated at cost.
4) Depreciation:
The Company has continued to provide depreciation on straight line
method at the revised rates on the original cost ofthe assets as per
circular dated 20.12.93. In respect of other assets for which rates are
not revised, the Company has continued to provide depreciation on
straight line method as specified in schedule XIV of the Companies Act,
1956.
Leasehold Land is amortized over the period of lease.
5) Inventories:
Items of inventories are valued on the FIFO/Specific Weighted Average
Cost and on the basis given below:
a) Stores and Spares, Packing At cost or net realizable value,
whichever is lower Materials, Fuel & Loose tools -
b) Raw Materials - At cost or net realizable value, whichever is lower
c) Work-in-Process - Atcostor net realizable value, whichever is lower
d) Finished Goods - At cost or net realizable value, whichever is lower
Costs of inventories comprise of all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
6) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
7) Investments:
Long Term Investments are carried at cost less provision for permanent
diminution, if any, in value of such investments.
8) Employees Benefits:
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit Method on the basis of Actuarial Valuation.
Contribution to provident fund a defined contribution plan is made in
accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determind using Projected Unit Credit Method on the basis of
Actuarial Valuation.
9) Impairment of Assets:
The company on an Annual basis makes an assessment of any indicator
that may lead to impairment of Assets. If any such indication exists,
the company estimates the recoverable amount of the assets. If such
recoverable amount is less than the carrying amount, then the carrying
amount is reduced to its recoverable amount by creating the difference
as impairment loss & is charged to the Statement of Profit & Loss.
10) Excise duty and Cenvat Credit:
Excise Duty payable on finished goods is accounted for on clearance of
goods. Cenvat credit on Capital goods and Inputs is accounted for on
the date of actual receipt of the same, respectively.
11) Foreign Currency Transactions:
(a) Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
(b) Conversion:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(c) Exchange differences :
Exchange difference arising on the settlement of monetary items or on
reporting Company''s monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
(d) Forward Exchange Contracts not intended for trading:
The premium or discount arising of the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal offorward
exchange contract is recognized as income or as expense forthe year.
12) Revenue Recognition:
Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from sale of goods is recognized on delivery ofthe goods, when
all significant contractual obligations have been satisfied, the
property . in the goods is transferred for a price, significant risks
and rewards of ownership are transferred to customers and no effective
ownership is retained. However;
(a) Revenue in respect of insurance/other claims etc., is recognized
only when it is reasonably certain that the ultimate collection will be
made.
(b) Export Incentives in respect of exports made under the Duty
Entitlement Pass Book Scheme is being accounted for on transfer.
(c) Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable rate of
interest.
13) Segment Accounting :
The Company deals in only one product segment i.e. Chemical Products
and hence requirements of AS-17 "Segment Reporting" issued by ICAI are
not applicable.
14) Earnings PerShare;
The earnings considered in ascertaining the Company''s EPS comprises
ofthe net profit aftertax (and includes the post tax effect of any
extra ordinary item).The number of shares used in computing Basic EPS
is the weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders by the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
15) Taxation:
(a) Direct Taxes:
Tax expense for the year, comprising of Current Tax and Deferred Tax is
included in determining the net profit forthe year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each Balance
Sheet date.
(b) IndirectTaxes:
The liabilities are provided or considered as contingent depending upon
the merit of each case and/or receiving the actual demand from the
department.
16) Cash Flow Statement:
The Cash Flow Statement is prepared by the "indirect method" set out in
Accounting Standard 3 on "Cash Flow Statement" and presents the cash
flows by operating, Investing and financing activities ofthe Company.
Cash and Cash Equivalents presented in the Cash Flow Statement consist
of cash on hand and demand deposits with banks.
17) Provisions and Contingent Liabilities:
A provision is recognized when the company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. A contingent liability is disclosed when
the company has a possible or present obligation where it is not
probable that an outflow of resources will be required to settle it.
Contingent assets are neither recognized nor disclosed in the Financial
Statements.
Mar 31, 2012
1 Basis of Accounting :
The financial statements are prepared under the historical cost
convention as a going concern and on accrual basis accordance with the
generally accepted accounting principles, the Accounting Standards
issued by the Institute of Chartered Accountants of India and the
relevant provisions ofthe Companies Act, 1956.(The Act)
2 Use of Estimates
The presentation of financial statements require estimates and
disclosure of contingent liabilities assumptions to be made that affect
the reported amount of Assets and Liabilities on the date ofthe
financial statements and the 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.
3 Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction, net of
cenvat credit, including incidental expenses related to acquisition and
installation and financing costs till the commencement of commercial
production and adjustments arising from exchange rate variation
relating to borrowings attributable to fixed assets, less accumulated
depreciation.
Free hold land is stated at cost.
4 Depreciation:
The Company has continued to provide depreciation on straight line
method at the revised rates on the original cost of the assets as per
circular dt.20.12.93. In respect of other assets for which rates are
not revised, the Company has continued to provide depreciation on
straight line method as specified in schedule XIV of the CompaniesAct,
1956.
Leasehold Land is amortized over the period of lease.
5 Inventories:
Items of inventories are valued on the FIFO/Specific Weighted Average
Costand on the basis given below:
a) Stores and Spares, Packing - At cost or net realizable Materials,
Fuel & Loose tools value, whichever is lower
b) Raw Materials - At cost or net realizable
value, whichever is lower
c) Work-in-Process - At cost or net realizable
value, whichever is lower
d) Finished Goods - At cost or net realizable
value, whichever is lower
Costs of inventories comprise of all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
6 Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
7 Investments:
Long Term Investments are carried at cost less provision for permanent
diminution, if any, in value of such
investments.
8 Employee Benefits:
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end ofthe period in which the employees render service)
and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit Method on the basis of Actuarial Valuation.
Contribution to provident fund a defined contribution plan is made in
accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determind using Projected Unit Credit Method on the basis of
Actuarial valuation.
9 Impairment of Assets:
The company on an Annual basis makes an assessment of any indicator
that may lead to impairment of Assets. If any such indication exists,
the company estimates the recoverable amount of the assets. If such
recoverable amount is less than the carrying amount, then the carrying
amount is reduced to its recoverable amount by creating the difference
as impairment loss & is charged to Profit & Loss Account.
10 Excise duty and Cenvat Credit:
Excise Duty payable on finished goods is accounted for on clearance of
goods. Cenvat credit on Capital goods and Inputs is accounted foron the
date of actual receipt of the same, respectively.
11 Foreign Currency Transactions:
(a) Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
(b) Conversion:
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(c) Exchange differences:
Exchange difference arising on the settlement of monetary items or on
reporting Company's monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
(d) Forward Exchange Contracts not intended fortrading:
The premium or discount arising of the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
12 Revenue Recognition:
Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from Sale of goods is recognized on delivery of the goods, when
all significant contractual obligations have been satisfied, the
property in the goods is transferred for a price, significant risks and
rewards of ownership are transferred to customers and no effective
ownership is retained. However;
(a) Revenue in respect of insurance/other claims etc., is recognized
only when it is reasonably certain that the ultimate collection will be
made.
(b) Export Incentives in respect of exports made under the Duty
Entitlement Pass Book Scheme is being accounted for on transfer.
(c) Interest income is recognized on a time proportion basis taking
into account the amount outstanding and the applicable rate of
interest.
13 Segment Accounting:
The Company deals in only one product segment i.e. Chemical Products
and hence requirements of AS-17 ÃSegment Reportingà issued by ICAI
are not applicable.
14 Earnings Per Share:
The earnings considered in ascertaining the Company's EPS comprises of
the net profit after tax (and includes the post tax effect of any extra
ordinary item). The number of shares used in computing Basic EPS is the
weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders by the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
15 Taxation:
(a) Direct Taxes:
Tax expense for the year, comprising of Current Tax and Deferred Tax is
included in determining the net profit for the year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each balance
sheet date.
(b) Indirect Taxes:
The liabilities are provided or considered as contingent depending upon
the merit of each case and/or receiving the actual demand from the
department.
16 Operating Lease:
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as on expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
17 Cash Flow Statement:
The Cash Flow Statement is prepared by the Ãindirect methodà set
out in Accounting Standard 3 on ÃCash Flow Statement'' and presents
the cash flows by operating, Investing and financing activities of the
Company.
Cash and Cash Equivalents presented in the Cash Flow Statement consist
of cash on hand and demand deposits with banks.
18 Provisions and Contingent Liabilities:
A provision is recognized when the company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. A contingent liability is disclosed when
the company has a possible or present obligation where it is not
probable that an outflow of resources will be required to settle it.
Contingent assets are neither recognized nor disclosed in the financial
statements.
Mar 31, 2011
1) Basis of Accounting :
The financial statements are prepared under the historical cost
convention as a going concern and on accrual basis accordance with the
generally accepted accounting principles, the Accounting Standards
issued by the Institute of Chartered Accountants of India and the
relevant provisions of the Companies Act, 1956 (The Act).
2) Use of Estimates :
The presentation of financial statements require estimates and
disclosure of contingent liabilities assumptions to be made that affect
the reported amount of Assets and Liabilities on the date of the
financial statements and the 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.
3) Fixed Assets:
Fixed Assets are stated at cost of acquisition or construction, net of
cenvat credit, including incidental expenses related to acquisition and
installation and financing costs till the commencement of commercial
production and adjustments arising from exchange rate variation
relating to borrowings attributable to fixed assets, less accumulated
depreciation.
Free hold land is stated at cost.
4) Depreciation:
The Company has continued to provide depreciation on straight line
method at the revised rates on the original cost of the assets as per
circular dt. 20.12.93. In respect of other assets for which rates are
not revised, the Company has continued to provide depreciation on
straight line method as specified in schedule XIV of the Companies Act,
1956.
Leasehold Land is amortized over the period of lease.
5) Inventories:
Items of inventories are valued on the FIFO/Specific Weighted Average
Cost and on the basis given below :
a) Stores and Spares, Packing
Materials, Fuel & Loose tools - At cost
b) Raw Materials - At cost or net realizable
value, whichever is lower
c) Work-in-Process - At cost or net realizable
value, whichever is lower
d) Finished Goods - At cost or net realizable
value, whichever is lower
Costs of inventories comprise of all costs of purchase, cost of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
6) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
7) Investments:
Long Term Investments are carried at cost less provision for permanent
diminution, if any, in value of such investments.
8) Employees Benefits:
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit Method on the basis of Actuarial Valuation.
Contribution to provident fund-A defined contribution plan is made in
accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determind using Projected Unit Credit Method on the basis of
Actuarial Valuation.
9) Impairment of Assets :
The company on an Annual basis makes an assessment of any indicator
that may lead to impairment of Assets. If any such indication exists,
the company estimates the recoverable amount of the assets. If such
recoverable amount is less than the carrying amount, then the carrying
amount is reduced to its recoverable amount by creating the difference
as impairment loss & is charged to Profit & Loss Account.
10) Excise duty and Cenvat Credit:
Excise Duty payable on finished goods is accounted for on clearance of
goods. Cenvat credit on Capital goods and Inputs is accounted for on
the date of actual receipt of the same, respectively.
11) Foreign Currency Transactions :
(a) Initial recognition:
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
(b) Conversion :
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(c) Exchange differences :
Exchange difference arising on the settlement of monetary items or on
reporting Company's monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
(d) Forward Exchange Contracts not intended for trading :
The premium or discount arising of the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
12) Revenue Recognition :
Income and Expenditure are recognized and accounted on accrual basis.
Revenue from sale of goods is recognized on delivery of the goods. When
all significant contractual obligations have been satisfied, the
property in the goods is transferred for a price, significant risks and
rewards of ownership are transferred to customers and no effective
ownership is retained. However;
a) Revenue in respect of insurance/other claims etc., is recognized
only when it is reasonably certain that the ultimate collection will be
made.
b) Export incentives in respect of exports made under the Duty
Entitlement Pass Book Scheme is being accounted for on transfer.
c) Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable rate of interest.
13) Segment Accounting :
The Company deals in only one product segment i.e. Chemical Products
and hence the requirements of AS-17 "Segment Reporting" issued by ICAI
are not applicable.
14) Earnings Per Share :
The earnings considered in ascertaining the Company's EPS comprises of
the net profit after tax (and includes the post tax effect of any extra
ordinary item). The number of shares used in computing basic EPS is the
weighted average number of shares outstanding during the year.
For the purpose of calculating diluted EPS the net profit or loss for
the year attributable to Equity Shareholders by the weighted average
number of shares outstanding during the year are adjusted for the
effects of all dilutive potential equity shares.
15) Taxation :
(a) Direct Taxes:
Tax expense for the year, comprising of Current Tax and Deferred Tax is
included in determining the net profit for the year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each balance
sheet date.
(b) Indirect Taxes:
The liabilities are provided or considered as contingent depending upon
the merit of each case and/or receiving the actual demand from the
department.
16) Operating Lease :
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as on expense
in the Profit and Loss account on a straight-line basis over the lease
term.
17) Cash Flow Statement:
The Cash Flow Statement is prepared by the "indirect method" set out in
Accounting Standard 3 on "Cash Flow Statement" and presents the cash
flows by operating, Investing and financing activities of the Company.
Cash and Cash equivalents presented in the Cash Flow Statement consist
of cash on hand and demand deposits with banks.
18) Provisions and Contingent Liabilities :
A provision is recognized when the company has a present obligation as
a result of a past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. A contingent liability is
disclosed when the company has a possible or present obligation where
it is not probable that an outflow of resources will be required to
settle it. Contingent assets are neither recognized nor disclosed in
the financial statements.
Mar 31, 2010
1) Basis of Accounting :
The financial statements are prepared under the historical cost
convention as a going concern and on accrual basis accordance with the
Generally accepted accounting principles, the Accounting Standards
issued by the Institute of Chartered Accountants of India and the
relevant provisions of the Companies Act, 1956 (The Act).
2) Use of Estimates
The presentation of financial statements require estimates and
disclosure of contingent liabilities assumptions to be made that affect
the reported amount of Assets and Liabilities on the date of the
financial statements and the 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 esults are
known/materialized.
3) Fixed Assets :
Fixed Assets are stated at cost of acquisition or construction, net of
cenvat credit, including incidental expenses
related to acquisition and installation and financing costs till the
commencement of commercial production and
adjustments arising from exchange rate ariation relating to
borrowings attributable to fixed assets, less accumulated
depreciation.
Free hold Land is stated at cost.
4) Depreciation :
The Company has continued to provide depreciation on straight line
method at the revised rates on the original cost of the assets as per
circular dt.20.12.93. In respect of other assets for which rates are
not revised, the Company has continued to provide depreciation on
straight line method as specified in schedule XIV of the Companies Act,
1956.
Leasehold Land is amortized over the period of lease.
5) Inventories :
Items of inventories are valued on the FIFO/Specific Weighted Average
Cost and on the basis given below :
a) Stores and Spares, Packing
Materials, Fuel & Loose tools - At cost
b) Raw Materials - At cost or net realizable value,
whichever is lower
c) Work-in-Process - At cost or net realizable value,
whichever is lower
d) Finished Goods - At cost or net realizable value,
whichever is lower
Costs of inventories comprise all costs of purchase, cost of conversion
and other costs incurred in bringing the inventories to their present
location and condition.
6) Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.
7) Investments:
Long Term Investments are carried at cost less provision for permanent
diminution, if any, in value of such investments.
8) Employees Benefits :
Short term employee benefits (which are payable within 12 months after
the end of the period in which the employees render service) are
measured at cost.
Long term employee benefits (which are payable after the end of 12
months from the end of the period in which the employees render
service) and post employment benefits (benefits which are payable after
completion of employment) are measured on a discounted basis by the
Projected Unit Credit Method on the basis of Actuarial Valuation.
Contribution to provident fund a defined contribution plan is made in
accordance with the statute.
The cost of providing leave encashment and gratuity defined benefit
plans are determind using Projected Unit Credit Method on the basis of
Actuarial valuation.
9) Impairment of Assets
The company on an Annual basis makes an assessment of any indicator
that may lead to impairment of Assets. If any such indication exists,
the company estimates the recoverable amount of the assets. If such
recoverable amount
is less than the carrying amount, then the carrying amount is reduced
to its recoverable amount by creating the difference as impairment loss
& is charged to Profit & Loss Account.
10) Excise duty and Cenvat Credit:
Excise Duty payable on finished goods is accounted for on clearance of
goods. Cenvat credit on Capital goods and Inputs is accounted for on
the date of actual receipt of the same, respectively.
11) Foreign Currency Transactions :
(a) Initial recognition :
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency of the date of the
transaction.
(b) Conversion :
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
of the date of the transaction; and non-monetary items which are
carried of fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(c) Exchange differences :
Exchange difference arising on the settlement of monetary items or on
reporting Companys monetary items of rates different from those of
which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
(d) Forward Exchange Contracts not intended for trading :
The premium or discount arising of the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
12) Revenue Recognition :
Income and Expenditure are recognized and accounted on Accrual Basis.
Revenue from Sale of goods is recognized on delivery of the goods, when
all significant contractual obligations have been satisfied, the
property in the goods is transferred for a price, significant risks and
rewards of ownership are transferred to customers & no effective
ownership is retained However;
a) Revenue in respect of insurance/other claims etc., is recognized
only when it is reasonably certain that the ultimate collection will be
made.
b) Export Incentives in respect of exports made under the Duty
Entitlement Pass Book Scheme is being accounted for on transfer.
c) Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable rate of interest.
13) Segment Accounting :
The Company deals in only one product segment i.e. Chemical Products
and hence requirements of AS-17 "Segment Reporting" issued by ICAI are
not applicable.
14) Earnings Per Share :
The earnings considered in ascertaining the Companys EPS comprises the
net profit after tax (and include the post tax effect of any extra
ordinary item). The number of shares used in computing Basic EPS is the
weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders by the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
15) Taxation :
(a) Direct Taxes :
Tax expense for the year, comprising Current Tax, Deferred Tax and
Fringe Benefit Tax is included in determining the net profit for the
year.
A provision is made for the current tax based on tax liability computed
in accordance with relevant tax rates and tax laws. A provision is made
for deferred tax for all timing differences arising between taxable
income and accounting income at currently enacted tax rates.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of their respective carrying values at each balance
sheet date.
(b) Indirect Taxes :
The liabilities are provided or considered as contingent depending upon
the merit of each case and/or receiving the actual demand from the
department.
16) Operating Lease :
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as on expense
in the Profit and Loss account on a straight-line basis over the lease
term.
17) Cash Flow Statement:
The Cash Flow Statement is prepared by the "indirect method" set out in
Accounting Standard 3 on "Cash Flow Statement" and presents the cash
flows by operating, Investing and financing activities of the Company.
Cash and Cash equivalents presented in the Cash Flow Statement consist
of cash on hand and demand deposits with banks.
18) Provisions and Contingent Liabilities :
A provision is recognized when the company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. A contingent liability is disclosed
when the company has a possible or present obligation where it is not
probable that an outflow of resources will be required to settle it.
Contingent assets are neither recognized nor disclosed.
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