Accounting Policies of Indian Acrylics Ltd. Company

Mar 31, 2018

i) Basis of Preparation

The financial statements have been prepared in accordance with Indian Accounting Standards (‘IND AS’) notified under section 133 of the Companies Act 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015.

For all the periods up to and including the year ended 31 March, 2017, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (‘Previous GAAP’). These are the Company first IND AS financial statements and the date of transition to IND AS is 01 April, 2016.

The Standalone financial statements have been prepared under the historical convention, on the accrual basis of accounting except for certain financial assets and financials liabilities that are measured at fair value at the end of the each reporting period, as stated in the accounting policies below. The accounting policies have been applied consistently over all the periods presented in the Standalone financial statements.

The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

ii) The preparation of the financial statements in conformity with IND AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made. Differences between actual results and estimates are recognized in the period in which the results are known/ materialized.

iii) REVENUE RECOGNITION

Revenue is recognized to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.

A. SALE OF GOODS

Revenue from sale of goods is recognized when the significant risks and rewards of ownership in the goods are transferred to the buyer of goods as per the terms of contracts, the Company retains no effective control of the goods transferred to a degree usually associated with the ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. The Company collects CST/VAT/GST on the behalf of the Government and therefore these are not economic benefits flowing to the company. Hence they are excluded from Revenue.

However, the revenue unto Q1 of the F.Y 2017-18 includes the excise duty amounts that have been collected from customers, which is shown separately in the expenditure head of the statement of profit & loss as per the disclosure requirements. Thereafter, with the introduction of Goods & Service Tax as on 01 July 2017, the tax amounts are excluded from the revenue for the period from Q2 to Q4 of F.Y. 2017-18.

B. INTEREST

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

C. DUTY DRAWBACK AND EXPORT INCENTIVES

Income from duty drawback and export incentives is recognized on an accrual basis.

iv) PROPERTY PLANT AND EQUIPMENT

Fixed Assets are stated at cost less depreciation. Cost of acquisition or construction is inclusive of duties, taxes and other incidental expenses. Cenvat credit available is deducted from cost of fixed assets. Capital work-in-progress includes advances paid for purchase of Fixed Assets, preoperative expenses pending capitalization, and capital work in progress. As per practice, expenses incurred on modernization/ debottlenecking of plant are capitalized.

Transition to IND AS

For transition to IND AS, The Company has elected to continue with the carrying value of all of its PPE recognized as of 01 April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

v) DEPRECIATION

Depreciation is provided as per rates specified in Schedule II of the Companies Act, 2013 as per details given below:

S.No. Name of Asset

1. Building & Tubewell SLM Basis

2. Plant & Machinery (Modified Cotton) SLM Basis

3. Plant & Machinery WDV Basis

4. Other Assets (Vehicles, Furniture & Fixture) WDV Basis

The plant being a continuous process plant, so rates of depreciation as applicable to continuous process Industry have been applied.

vi) INVENTORIES

The cost in respect of various items of inventories are computed as under:-

- In case of raw materials stores and spares at weighted average cost plus direct expenses.

- In case of work in process at raw material cost plus conversion expenses depending upon stage of completion.

- In case of finished goods at raw materials cost plus conversion cost, packing cost and other overheads to bring the goods to present condition and location.

- Raw material and other stocks lying at port pending clearance at cost inclusive of custom duty actually paid. The custom duty payable on material lying into bond is accounted on clearance for home consumption.

vii) BORROWING COST

Borrowing costs that are directly attributable to acquisition, construction or production of a qualifying asset are capitalized/inventoried as part of cost of such assets till such time the asset is ready for its intended use/or sale. Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are expensed in the period in which they are incurred.

viii) LEASES

Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease under which the risks and rewards incidental to ownership are not transferred to lessee is classified as operating lease. Lease payments under operating leases are recognized as an expense on a straight line basis in net profit in the statement of profit and loss over the lease term.

ix) RETIREMENT BENEFITS

The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. The gratuity plan in Company is funded through annual contributions to Life Insurance Corporation of India (LIC) under its Company’s Gratuity Scheme whereas others are not funded. The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Company’s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. They are included in retained earnings in the statement of changes in equity and in the balance sheet. Past-service costs are recognized immediately in profit or loss. Gratuity and earned leave encashment has been provided for in the books of accounts on actuarial valuation basis as at the end of the year.

x) FOREIGN CURRENCY TRASANCTIONS

Functional and Presentation currency:

The functional currency of the Company is Indian Rupee. These financial statements are presented in Indian Rupee (rounded off to lakhs).

Transactions and Balances:

The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognized in profit or loss in the period in which they arise.

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Mar 31, 2016

1. SIGNIFICANT ACCOUNTING POLICIES :

i) The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standard and relevant presentational requirements of the Companies Act, 2013.

ii) Fixed Assets.:

Fixed Assets are stated at cost less depreciation. Cost of acquisition or construction is inclusive of duties, taxes and other incidental expenses. Cenvat credit available is deducted from cost of fixed assets.

Capital work-in-progress includes advances paid for purchase of Fixed Assets, preoperative expenses pending capitalization, and capital work in progress. As per practice, expenses incurred on modernization/ debottlenecking of plant are capitalized.

iii) Depreciation :

Depreciation is provided as per rates specified in Schedule 11 of the Companies Act, 2013 as per details given below:

The plant being a continuous process plant, so rates of depreciation as applicable to continuous process industry have been applied.

iv) Inventories :

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventories are computed as under:-

a) In case of raw materials stores and spares at weighted average cost plus direct expenses.

b) In case of work in process at raw material cost plus conversion expenses depending upon stage of completion.

c) In case of finished goods at raw materials cost plus conversion cost, packing cost, excise duty and other overheads to bring the goods to present condition and location.

d) Raw material and other stocks lying at port pending clearance at cost inclusive of custom duty actually paid. The custom duty payable on material lying into bond is accounted on clearance for home consumption.

v) Retirement Benefits :

Gratuity and earned leave encashment has been provided for in the books of accounts on acturial valuation basis as at the end of the year.

vi) Interest :

Interest in respect of fixed deposits lying with banks has been accounted for on accrual basis.

vii) Cenvat & Excise Duty

Purchases, Sales and Stocks are shown net of cenvat credit available. Balance in the cenvat account is shown as current assets and excise duty expenditure is booked on gross basis. Provision made for excise duty liability on stock of finished goods lying at the year end is booked in excise duty expenditure account and liability for the same is shown as provisions under schedule of current liabilities.

viii) Recognition of Income/Expenditure :

All revenues and expenses are accounted for on accrual basis except for medical reimbursement payable, claims receivable and export incentives which are accounted for on cash basis, unless otherwise explained hereafter. All expenses are shown as net of Input Tax Credit as Service Tax Credit is adjustable against excise duty under Cenvat Credit Rules.

ix) Foreign Exchange Fluctuations :

a) Foreign currency assets / liabilities are covered by forward contracts are restated at the rates prevailing at the end of the year.

b) Any income or expense on account of exchange difference is recognized in the Profit and Loss Account as per the requirement of AS-11 (Revised).

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Mar 31, 2015

I) The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standard and relevant presentational requirements of the Companies Act, 2013.

ii) Fixed Assets.:

Fixed Assets are stated at cost less depreciation. Cost of acquisition or construction is inclusive of duties, taxes and other incidental expenses. Cenvat credit available is deducted from cost of fixed assets.

Capital work-in-progress includes advances paid for purchase of Fixed Assets, preoperative expenses pending capitalisation, and capital work in progress. As per practice, expenses incurred on modernisation / debottlenecking of plant are capitalised.

iii) Depreciation :

Depreciation is provided as per rates specified in Schedule II of the Companies Act, 2013 as per details given below:

S.No. Name of Asset

1. Building SLM Basis

2. Plant & Machinery WDV Basis

3. Other Assets (Vehicles, Furniture & Fixture) WDV Basis

The plant being a continuous process plant, so rates of depreciation as applicable to continuous process industry have been applied.

iv) Inventories :

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventories are computed as under:-

* In case of raw materials stores and spares at weighted average cost plus direct expenses.

* In case of work in process at raw material cost plus conversion expenses depending upon stage of completion.

* In case of finished goods at raw materials cost plus conversion cost, packing cost, excise duty and other overheads to bring the goods to present condition and location.

* Raw material and other stocks lying at port pending clearance at cost inclusive of custom duty actually paid. The custom duty payable on material lying into bond is accounted on clearance for home consumption.

v) Retirement Benefits :

Gratuity and earned leave encashment has been provided for in the books of accounts on acturial valuation basis as at the end of the year.

vi) Interest :

Interest in respect offixed deposits lying with banks has been accounted for on accrual basis.

vii) Cenvat & Excise Duty

Purchases, Sales and Stocks are shown net of cenvat credit available. Balance in the cenvat account is shown as current assets and excise duty expenditure is booked on gross basis. Provision made for excise duty liability on stock offinished goods lying at the year end is booked in excise duty expenditure account and liability for the same is shown as provisions under schedule of current liabilities.

viii) Recognition of Income/expenditure :

All revenues and expenses are accounted for on accrual basis except for medical reimbursement payable, claims receivable and export incentives which are accounted for on cash basis, unless otherwise explained hereafter. All expenses are shown as net of Input Tax credit as Service Tax credit is adjustable against excise duty under cenvat credit Rules.

ix) Foreign Exchange Fluctuations :

a) Foreign currency assets / liabilities not covered by forward contracts are restated at the rates prevailing at the end of the year.

b) Any income or expense on account of exchange difference is recognised in the Profit and Loss Account as per the requirement of AS-11.

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Mar 31, 2014

I) The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standard and relevant presentational requirements of the Companies Act, 1956.

ii) FIXED ASSETS.:

Fixed Assets are stated at cost less depreciation. Cost of acquisition or construction is inclusive of duties, taxes and other incidental expenses. Cenvat credit available is deducted from cost of fixed assets.

Capital work-in-progress includes advances paid for purchase of Fixed Assets, preoperative expenses pending capitalisation, and capital work in progress. As per practice, expenses incurred on modernisation / debottlenecking of plant are capitalised.

iii) Depreciation :

Depreciation is provided as per rates specified in Schedule XIV of the Companies Act, 1956 as per details given below:

S.No. Name of Asset

1. Building SLM Basis

2. Plant & Machinery WDV Basis

3. Other Assets (Vehicles, Furniture & Fixture) WDV Basis

The plant being a continuous process plant, so rates of depreciation as applicable to continuous process industry have been applied.

iv) Inventories :

Inventories are valued as under :-

* In case of raw materials stores and spares at weighted average cost plus direct expenses.

* In case of work in process at raw material cost plus conversion expenses depending upon stage of completion.

* In case of finished goods at raw materials cost plus conversion cost, packing cost, excise duty and other overheads to bring the goods to present condition and location.

* Raw material and other stocks lying at port pending clearance at cost inclusive of custom duty actually paid. The custom duty payable on material lying into bond is accounted on clearance for home consumption.

v) Retirement Benefits :

Gratuity and earned leave encashment has been provided for in the books of accounts on acturial valuation basis as at the end of the year.

vi) Interest :

Interest in respect of fixed deposits lying with banks has been accounted for on accrual basis.

vii) Cenvat & Excise Duty

Purchases, Sales and Stocks are shown net of cenvat credit available. Balance in the cenvat account is shown as current assets and excise duty expenditure is booked on gross basis. Provision made for excise duty liability on stock of finished goods lying at the year end is booked in excise duty expenditure account and liability for the same is shown as provisions under schedule of current liabilities.

viii) Recognition of Income/Expenditure :

All revenues and expenses are accounted for on accrual basis except for medical reimbursement payable, claims receivable and export incentives which are accounted for on cash basis, unless otherwise explained hereafter. All expenses are shown as net of Input Tax credit as Service Tax credit is adjustable against excise duty under cenvat credit Rules.

ix) Foreign Exchange Fluctuations :

a) Foreign currency assets / liabilities not covered by forward contracts are restated at the rates prevailing at the end of the year.

b) Any income or expense on account of exchange difference is recognised in the Profit and Loss Account as per the requirement of AS-11

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Mar 31, 2013

I) The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standard and relevant presentational requirements of the Companies Act, 1956.

ii) FIXED ASSETS :

Fixed Assets are stated at cost less depreciation. Cost of acquisition or construction is inclusive of duties, taxes and other incidental expenses. Cenvat credit available is deducted from cost of fixed assets. Capital work-in-progress includes advances paid for purchase of Fixed Assets, preoperative expenses pending capitalisation, and capital work in progress. As per practice, expenses incurred on modernisation /debottlenecking of plant are capitalised.

iii) Depreciation :

Depreciation is provided as per rates specified in Schedule XIV of the Companies Act, 1956 as per details given below:

S.No. Name of Asset

1. Building SLM Basis

2. Plant & Machinery WDV Basis

3. Other Assets (Vehicles, Furniture & Fixture) WDV Basis

The plant being a continuous process plant, so rates of depreciation as applicable to continuous process industry have been applied.

iv) Inventories :

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventories are computed as under:-

- In case of raw materials stores and spares at weighted average cost plus direct expenses.

- In case of work in process at raw material cost plus conversion expenses depending upon stage of completion.

- In case of finished goods at raw materials cost plus conversion cost, packing cost, excise duty and other overheads to bring the goods to present condition and location.

- Raw material and other stocks lying at port pending clearance at cost inclusive of custom duty actually paid. The custom duty payable on material lying into bond is accounted on clearance for home consumption.

v) Retirement Benefits :

Gratuity and earned leave encashment has been provided for in the books of accounts on acturial valuation basis as at the end of the year.

vi) Interest :

Interest in respect of fixed deposits lying with banks has been accounted for on accrual basis.

vii) Cenvat & Excise Duty

Purchases, Sales and Stocks are shown net of cenvat credit available. Balance in the cenvat account is shown as current assets and excise duty expenditure is booked on gross basis. Provision made for excise duty liability on stock of finished goods lying at the year end is booked in excise duty expenditure account and liability for the same is shown as provisions under schedule of current liabilities.

viii) Recognition of Income/Expenditure :

All revenues and expenses are accounted for on accrual basis except for medical reimbursement payable, claims receivable and export incentives which are accounted for on cash basis, unless otherwise explained hereafter. All expenses are shown as net of Input Tax credit as Service Tax credit is adjustable against excise duty under cenvat credit Rules.

ix) Foreign Exchange Fluctuations :

a) Foreign currency assets / liabilities not covered by forward contracts are restated at the rates prevailing at the end of the year.

b) Any income or expense on account of exchange difference is recognised in the Profit and Loss Account as per the requirement of AS-11 issued by ICAI, New Delhi.

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Mar 31, 2012

I) The financial statements are prepared under the historical cost convention in accordance with the applicable Accounting Standard and relevant presentational requirements of the Companies Act, 1956.

ii) FIXED ASSETS :

Fixed Assets are stated at cost less depreciation. Cost of acquisition or construction is inclusive of duties, taxes and other incidental expenses. Cenvat credit available is deducted from cost of fixed assets.

Capital work-in-progress includes advances paid for purchase of Fixed Assets, preoperative expenses pending capitalisation, and capital work in progress. As per practice, expenses incurred on modernisation / debottlenecking of plant are capitalised.

iii) Depreciation :

Depreciation is provided as per rates specified in Schedule XIV of the Companies Act, 1956 as per details given below:

S.No. Name of Asset 1. Building SLM Basis

2. Plant & Machinery WDV Basis

3. Other Assets (Vehicles, Furniture & Fixture) WDV Basis

The plant being a continuous process plant, so rates of depreciation as applicable to continuous process industry have been applied.

iv) Inventories :

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventories are computed as under:-

- In case of raw materials stores and spares at weighted average cost plus direct expenses.

- In case of work in process at raw material cost plus conversion expenses depending upon stage of completion.

- In case of finished goods at raw materials cost plus conversion cost, packing cost, excise duty and other overheads to bring the goods to present condition and location.

- Raw material and other stocks lying at port pending clearance at cost inclusive of custom duty actually paid. The custom duty payable on material lying into bond is accounted on clearance for home consumption.

v) Retirement Benefits :

Gratuity and earned leave encashment has been provided for in the books of accounts on actuarial valuation basis as at the end of the year.

vi) Interest :

Interest in respect of fixed deposits lying with banks has been accounted for on accrual basis.

vii) Cenvat & Excise Duty

Purchases, Sales and Stocks are shown net of cenvat credit available. Balance in the cenvat account is shown as current assets and excise duty expenditure is booked on gross basis. Provision made for excise duty liability on stock of finished goods lying at the year end is booked in excise duty expenditure account and liability for the same is shown as provisions under schedule of current liabilities.

viii) Recognition of Income/Expenditure :

All revenues and expenses are accounted for on accrual basis except for medical reimbursement payable, claims receivable and export incentives which are accounted for on cash basis, unless otherwise explained hereafter. All expenses are shown as net of Input Tax credit as Service Tax credit is adjustable against excise duty under cenvat credit Rules.

ix) Foreign Exchange Fluctuations :

a) Foreign currency assets / liabilities not covered by forward contracts are restated at the rates prevailing at the end of the year.

b) Any income or expense on account of exchange difference is recognised in the Profit and Loss Account as per the requirement ofAS-11 issued by ICAI, New Delhi.