Accounting Policies of Styrenix Performance Materials Ltd. Company
Mar 31, 2022
Background
INEOS Styrolution India Limited (the ''Company'') is a public limited Company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is engaged in manufacture, trading and sale of âEngineering Thermoplasticsâ. The Company has manufacturing facilities at Nandesari, Moxi, Katol and Dahej and Research and Development centre at Moxi in Gujarat.
Note 1: Significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation(i) Compliance with Ind AS:
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria as set out in the Schedule III to the Act.
The accounting policies adopted in the preparation of the financial statements are consistent with those of the previous year. Also refer Note 1(a)(iii) below.
(ii) Historical cost convention:
The financial statements have been prepared on a historical cost basis, except for the following:
⢠certain financial assets and liabilities (including derivative instruments) that are measured at fair value (refer note 35);
⢠assets held for sale - measured at lower of its carrying amount and fair value less costs to sell
⢠defined benefit plans - plan assets measured at fair value (refer note 40).
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. Refer note 41 for segment information presented.
(c) Foreign currency translation(i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements of the Company are presented in Indian rupee (INR), which is the Company''s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in Statement of profit and loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of profit and loss on a net basis within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
(d) Revenue recognition(i) Sale of goods
The Company is engaged in manufacturing, trading and sale of ''Engineering Thermoplastics''. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer''s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.
Revenue from these sales is recognised based on the price agreed with the customer, net of the estimated discounts based on discount agreements. Revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. No element of financing is deemed present as the sales are made with a credit term of 30-45 days, which is consistent with market practice.
Sale of goods does not involve warranty obligation or right to return.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Commission income is recognised when the terms of the contract are fulfilled.
Income from services rendered is recognised based on agreements/arrangements with the customers as the service is performed and there are no unfulfilled obligations.
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.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
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 amounts in the financial statements. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). 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 expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognized 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 offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or 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.
As a lessee:
Leases are recognized as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the company. Contracts may contain both lease and non-lease components. As a general rule, the Company separates non-lease components, such as services, from lease payments except where it is not practical to determine non-lease components.
Assets and liabilities arising from a lease are initially measured on present value basis. Lease liabilities include the net present value of the following lease payments:
- fixed payments (including in substances fixed payments), less any lease incentive receivable
- variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
- payments of penalties for terminating the lease, if the lease term reflects the company exercising that option
Lease payments to be made under reasonably certain extension option are also included in the measurement of the liability. The lease payments are discounted using the lessee''s incremental borrowing rate, being the rate that lessee would have to pay to borrow the fund necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar term, security and conditions.
The Company is exposed to potential future increases in variable lease payments based on index or rate, which are not included in the lease liability until they take effect. When adjustment to lease payments based on index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. Finance cost is charged to profit or loss over the lease period so as to produce a constant periodical rate of interest on the remaining balance of the liability for each period.
Variable lease payments other than those based on index or rate are recognized in profit or loss in the period in which the condition that triggers those payments occurs.
Right-of-use assets are measured at cost comprising the following:
- the amount of initial measurement of lease liability,
- any lease payments made at or before the commencement date less any lease incentives received,
- any initial direct costs, and
- restoration costs
Right-of-use assets are generally depreciated over the shorter of the asset''s useful life and the lease term on a straight line basis.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognized on a straightline basis in the Statement of profit and loss. Short term leases are leases with a lease term of 12 months or less. Low value asset comprise IT equipment and Office Equipment.
As a lessor:
The Company does not have any lease arrangements where the entity is a lessor.
The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset''s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, 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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for impairment.
Raw materials, packing materials, stores and spares, work in progress, traded and finished goods are stated at the lower of cost and net realisable value. Cost of raw materials and traded goods comprises cost of purchases. Cost of work-in progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition.
Costs are assigned to individual items of inventory on the basis of weighted average cost basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
(k) Investments and other financial assets(i) Classification
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value through profit or loss and
⢠those measured at amortised cost.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income as the case may be. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Statement of profit and loss.
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of acquisition of financial assets carried at fair value through profit and loss are expensed in the Statement of profit and loss.
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured subsequently at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method.
Equity instruments : The Company subsequently measures all equity investments at fair value through Statement of Profit and Loss. Dividends from such investments are recognised in profit or loss as other income when the Company''s right to receive payments is established.
(iii) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its financial assets carried at amortised cost. The impairment methodology applied depends on whether there has been an increase in credit risk (Refer note 35).
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
(iv) Derecognition of financial assets
A financial asset is derecognised only when
⢠The Company has transferred the rights to receive cash flows from the financial asset or
⢠Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the group retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
Interest income
Interest income on financial assets at amortised cost is calculated using the effective interest method is recognised in the statement of profit and loss as part of other income. Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.
Dividends
Dividends are received from financial assets at fair value through profit or loss. Dividends are recognised as other income in profit or loss when the right to receive payment is established.
Derivatives are taken as the hedging instrument by the Company.
For derivatives taken against underlying asset/liability or that are used to hedge forecast transactions, the Company generally designates only the change in fair value of the forward contract related to the spot component and aligned forward element on reporting date.
Gains or losses relating to the effective portion of the change in the spot component and aligned forward element of the forward contracts are recognised in Statement of profit and loss.
(m) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
(n) Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is 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 profit or loss during the reporting period in which they are incurred.
Depreciation methods and estimated useful lives:
Depreciation is calculated using the straight-line method over useful lives of assets as follows:
|
Asset Category |
Estimated useful life |
|
Lease hold land |
Lease Term |
|
Building, including temporary structure (*) |
3-60 Years |
|
Road (*) |
10 Years |
|
Plant & Machinery (*) |
3-40 Years |
|
Furniture & Fixtures (*) |
6-16 Years |
|
Office Equipment (*) |
3-7 Years |
|
Vehicles (*) |
8-10 Years |
(*) Based on technical evaluation, the management believes that the useful life given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013.
Useful life of Leasehold Improvements is considered based on lease term.
Depreciation and amortization methods and useful lives are reviewed periodically, including at each financial year end.
An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of profit and loss.
(o) Non-Current Assets Classified as Held for sale
Non-current Assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the asset is recognised at the date of de-recognition.
Assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.
Assets classified as held for sale are presented separately from the other assets in the balance sheet.
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid or not due for payment. The amounts are unsecured and are usually paid as per the agreed payment
terms. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings are initially recognised at fair value and are subsequently measured at amortised cost. In case of foreign currency loan, any difference between the proceeds received and repayment amount is recognised in the Statement of profit and loss.
Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
(s) Provisions and contingent liabilities
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. These are reviewed at each reporting period and reflect the best current estimate. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
Short-term employee benefits obligations:
All employee benefits payable within twelve months of service such as salaries, wages, bonus, ex-gratia, medical benefits etc. are classified as short-term employee benefits and are recognised in the Statement of Profit and Loss as an expense
and are presented as current employee benefit obligations in the Balance sheet at the undiscounted amount on an accrual basis. Short-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees.
Termination benefits are recognised as an expense as and when incurred.
Defined contribution plans
Contributions to defined contribution schemes such as contribution to Provident Fund, Super annuation fund, Employees'' State Insurance Corporation, National Pension Scheme and Labours Welfare Fund are charged as an expense to the Statement of Profit and Loss based on the amount of contribution required to be made as and when services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
Defined benefit plans
Gratuity: The Company provides for gratuity, a defined benefit plan (the âGratuity Planâ) 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 Company''s liability is actuarially determined (using the Projected Unit Credit method) by an independent actuary at the end of each year. Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income.
Non-current compensated absences: The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore 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. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the Balance Sheet if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the period (Refer Note 33).
All amounts disclosed in the financial statements and notes have been rounded off in lakhs as per the requirement of Schedule III, unless otherwise stated.
When items of income or expense are of such nature, size and incidence that their disclosure is necessary to explain the performance of the Company for the year, the Company makes a disclosure of the nature and amount of such items separately under the head âExceptional itemsâ
Critical estimates and judgments :
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the group''s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
Areas involving critical estimates and judgements are:
Estimated useful life of tangible assets
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation and amortisation expense in future periods. The policy has been detailed in note 1 (n).
Estimated defined benefit obligation
The Company''s retirement benefit obligations are subject to number of assumptions including discount rates, inflation and salary growth. Significant assumptions are required when setting these criteria and a change in these assumptions would have a significant impact on the amount recorded in the Company''s balance sheet and the statement of profit and loss. The Company sets these assumptions based on previous experience and third party actuarial advice. Further details on the Company''s retirement benefit obligations, including key judgements are set out in note 1 (t) and note 39.
Impairment of financial assets
The impairment provisions for financial assets disclosed are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Further details on impairment of financial assets, including key judgements are set out in note 1 (k) (iii) and note 35 (i)
Ind AS 116 Leases requires a lessee to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on lease by lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of lease and the importance of the underlying lease to the Company''s operations taking into account the location of the underlying asset and the availability of the suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics. Further details on Leases, including key judgements are set out in note 1 (f) and note 2 (B)
Provisions and contingent liabilities
A provision is recognised when the Company has a present obligation as result of a past event and it is probable that the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Contingent liabilities may arise in the ordinary course of business in relation to the claims against the Company. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgements and use of estimates regarding the outcome of future events. While ascertaining the possible outcome of contingencies, the management of the Company exercises judgements basis evaluation of the judicial pronouncements and/or legal opinions from an independent expert. Further details are set out in note 1 (s) and note 37.
Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.
Recent accounting pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 1st, 2022, as below.
Ind AS 16 - Property, Plant and Equipment
The amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2022. The Company has evaluated the amendment and expect the amendment to have no impact in its financial statements.
Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets
The amendments specify that that the ''cost of fulfilling'' a contract comprises the ''costs that relate directly to the contract''. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts. The amendment is essentially a clarification and the Company does not expect the amendment to have any impact in its financial statements.
Mar 31, 2018
Background
INEOS Styrolution India Limited (the ''Company'') is a public limited Company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company is engaged in manufacture, trading and sale of âEngineering Thermoplasticsâ. The Company has manufacturing facilities at Nandesari, Moxi, Katol and Dahej and Research and Development centre at Moxi in Gujarat.
Note 1: Significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation
(i) Compliance with Ind AS:
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] 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:
- certain financial assets and liabilities (including derivative instruments) that are measured at fair value (refer note 33);
- defined benefit plans - plan assets measured at fair value (refer note 38).
(b) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements of the Company are presented in Indian rupee (INR), which is the Company''s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in Statement of profit and loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of profit and loss on a net basis within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
(c) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, rate difference, value added taxes, goods and service tax and amounts collected on behalf of third parties.
The Company recognizes sales at the point of transfer of significant risks and rewards of ownership to the customers. No element of financing is deemed present as the sales are made with a credit term which is consistent with market practice.
The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Interest income is recognized in the time proportion basis taking into account the amount invested and rate of interest. Indent Commission income is recognized on accrual basis. Revenue in respect of other claims is recognized on accrual basis to the extent the ultimate realization is reasonably certain.
Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
(d) Income tax
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.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
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 amounts in the financial statements. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). 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 expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize 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 offset where the entity 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 recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
(e) Leases
As a lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the less or) are charged to the Statement of profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the less orâs expected inflationary cost increases.
(f) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset''s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
(g) 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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
(h) Trade receivables
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost, less provision for impairment.
(i) Inventories
Raw Materials, Packing Materials and Stores and Spares are valued at weighted average cost after taking credit for CENVAT and including Customs duty and goods and service tax, as applicable and Goods-in-transit at cost to date.
Work-in-progress and finished goods stock is valued at cost and net realizable value whichever is lower. Cost of work-in-progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.
Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs are assigned to individual items of inventory on the basis of weighted average cost basis. Costs of purchased inventory are determined after deducting discounts. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Goods-in-transit are valued at cost to date.
(j) Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value through profit or loss and
- those measured at amortized cost.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income as the case may be. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Statement of profit and loss.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of acquisition of financial assets carried at fair value through profit and loss are expensed in the Statement of profit and loss.
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method.
Equity instruments
The Company subsequently measures all equity investments at fair value through Statement of Profit and Loss. Dividends from such investments are recognized in profit or loss as other income when the Company''s right to receive payments is established.
(iii) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its financial assets carried at amortized cost. The impairment methodology applied depends on whether there has been an increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
(iv) Derecognition of financial assets
A financial asset is derecognized only when
- The Company has transferred the rights to receive cash flows from the financial asset or
- Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
- Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset.
(k) Derivatives
Derivatives are taken as the hedging instrument by the Company.
For derivatives taken against underlying asset/liability or that are used to hedge forecast transactions, the Company generally designates only the change in fair value of the forward contract related to the spot component and aligned forward element on reporting date.
Gains or losses relating to the effective portion of the change in the spot component and aligned forward element of the forward contracts are recognized in Statement of profit and loss.
(l) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
(m) Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset''s carrying amount or recognized 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 derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
(*) Based on technical evaluation, the management believes that the useful life given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.
Depreciation and amortization methods and useful lives are reviewed periodically, including at each financial year end.
An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of profit and loss.
(n) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid or not due for payment. The amounts are unsecured and are usually paid as per the agreed payment terms. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at recognized cost using the effective interest method.
(o) Borrowings
Borrowings are initially recognized at fair value and are subsequently measured at recognized cost. In case of foreign currency loan, any difference between the proceeds received and repayment amount is recognized in the Statement of profit and loss.
Borrowings are derecognized from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.
(p) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
(q) Provisions and contingent liabilities:
Provisions are recognized 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. These are reviewed at each reporting period and reflect the best current estimate. Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
(r) Employee benefits
Current employee benefits obligations:
All employee benefits payable within twelve months of service such as salaries, wages, bonus, ex-gratia, medical benefits etc. are classified as current employee benefits and are recognized in the Statement of Profit and Loss as an expense and are presented as current employee benefit obligations in the Balance sheet at the undiscounted amount on an accrual basis.
Termination benefits are recognized as an expense as and when incurred.
Short-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees.
Defined contribution plans
Contributions to defined contribution schemes such as contribution to Provident Fund, Super annuation fund, Employees'' State Insurance Corporation, and Labours Welfare Fund are charged as an expense to the Statement of Profit and Loss based on the amount of contribution required to be made as and when services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
Defined benefit plans
Gratuity: The Company provides for gratuity, a defined benefit plan (the âGratuity Planâ) 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 Company''s liability is actuarially determined (using the Projected Unit Credit method) by an independent actuary at the end of each year. Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income.
Non-current compensated absences: The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore 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. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the Balance Sheet if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.
(s) Contributed equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(t) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
(u) Earnings per share
Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the period.
(v) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off in lakhs as per the requirement of Schedule III, unless otherwise stated.
(w) New Ind AS/amendments issued but not yet effective
The Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 (the ''Rules'') on 28 March 2018. Relevant disclosures required by Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors for new Ind AS/amendments issued but not yet effective are as follows:
i. Ind AS 115, Revenue from contracts with customers
Ind AS 115, Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity''s contracts with customers. Revenue is recognized when a customer obtains control of a promised good or service and thus has the ability to direct the use and obtain the benefits from the good or service in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard replaces Ind AS 18 Revenue and Ind AS 11 Construction contracts and related appendices.
The Company is in the process of assessing the detailed impact of Ind AS 115. Presently, the Company is not able to reasonably estimate the impact that application of Ind AS 115 is expected to have on its financial statements, except that adoption of Ind AS 115 is not expected to significantly change the timing of the Company''s revenue recognition for product sales.
Critical estimates and judgments :
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgment in applying the group''s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.
Areas involving critical estimates and judgments are:
Estimated useful life of tangible assets - Refer Note 1 (m) and Note 2
Estimated defined benefit obligation - Refer Note 1 (r) and Note 38
Allowance for doubtful debts - Refer Note 1 (h), 1 (j) (iii) and Note 34
Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the group and that are believed to be reasonable under the circumstances.
b) Rights, preferences and restrictions attached to shares Equity Shares
The Company has one class of equity share having a par value of INR 10/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
Notes:
1) External Commercial Borrowing (ECB) loan is availed from a related party at a fixed interest rate of 8.90%, repayable in 7 half-yearly installments beginning from December 31, 2019.
2) Cash credit facility is availed at a rate of 8.45% p.a. (March 31, 2017: 8.45% p.a. to 9.75% p.a.) during the year.
3) Buyers credit facility is taken towards purchase of raw material which has been covered under letter of credit limit and carries interest rate from 1.20% p.a. to 2.15% p.a. (March 31, 2017: 0.60% p.a. to 1.22% p.a.) during the year and is generally repayable within 60 - 90 days (March 31, 2017: 30 - 90 days) from the date of the credit is extended.
4) Working capital loans are taken for a duration of 1 to 90 days and carries interest rate from 7.00% p.a. to 9.25% p.a. (March 31, 2017 : 9.01% p.a. - 9.70% p.a.) during the year.
5) Unsecured borrowings from banks are guaranteed by INEOS Styrolution Group GmbH.
6) Secured borrowings from banks are secured by first charge on inventories and trade receivables.
7) Current borrowing includes interest accrued but not due amounting to INR 27.28 Lakhs (March 31, 2017 - 21.14 Lakhs).
Mar 31, 2017
Background
INEOS Styrolution India Limited (the ''Company'') is a public limited Company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company was previously registered as Styrolution ABS (India) Limited and changed its name on 18 March, 2016 pursuant to special resolution passed by the shareholders of the company through Postal Ballot (including e-voting) on 25 February 2016 and subsequent approval from Registrar of Companies, Gujarat. The Company is engaged in manufacture, trading and sale of âEngineering Thermoplasticsâ. The Company has manufacturing facilities at Nandesari, Moxi, Katol and Dahej and Research and Development centre at Moxi in Gujarat.
Note 1: Significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation
(i) Compliance with Ind AS:
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
The financial statements up to year ended March 31, 2016 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act. These financial statements has been restated to comply with Ind AS.
These financial statements are the first financial statements of the Company under Ind AS. Refer note 43 for an explanation of how the transition from previous GAAP (hereinafter referred to as ''IGAAP'') to Ind AS has affected the Company''s financial position, financial performance and cash flows.
(ii) Historical cost convention:
The financial statements have been prepared on a historical cost basis, except for the following:
- certain financial assets and liabilities (including derivative instruments) that are measured at fair value (refer note 32);
- defined benefit plans - plan assets measured at fair value (refer note 37).
(b) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The financial statements of the Company are presented in Indian rupee (INR), which is the Company''s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in Statement of profit and loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of profit and loss on a net basis within other income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.
(c) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, rate difference, value added taxes and amounts collected on behalf of third parties. Revenue includes excise duty as it is paid on production and is a liability of the manufacturer, irrespective of whether the goods are sold or not.
The Company recognizes sales at the point of transfer of significant risks and rewards of ownership to the customers. No element of financing is deemed present as the sales are made with a credit term which is consistent with market practice.
The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity. The Company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Interest income is recognized in the time proportion basis taking into account the amount invested and rate of interest. Indent Commission income is recognized on accrual basis. Revenue in respect of other claims is recognized on accrual basis to the extent the ultimate realization is reasonably certain.
Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
(d) Income tax
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.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
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 amounts in the financial statements. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). 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 expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize 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 offset where the entity 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 recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
(e) Leases As a lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the less or) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the less orâs expected inflationary cost increases.
(f) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset''s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
(g) 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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
(h) Trade receivables
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost, less provision for impairment.
(i) Inventories
Raw Materials, Packing Materials and Stores and Spares are valued at weighted average cost after taking credit for CENVAT and including Customs duty, wherever applicable and Goods-in-transit at cost to date.
Work-in-progress and finished goods stock is valued at cost or net realizable value whichever is lower. Cost of work-in-progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.
Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs are assigned to individual items of inventory on the basis of weighted average cost basis. Costs of purchased inventory are determined after deducting discounts. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Goods-in-transit are valued at cost to date.
(j) Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value through profit or loss and
- those measured at amortized cost.
The classification depends on the entity''s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income as the case may be. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Statement of profit and loss.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of acquisition of financial assets carried at fair value through profit and loss are expensed in the Statement of profit and loss.
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method.
Equity instruments
The Company subsequently measures all equity investments at fair value through Statement of Profit and Loss. Dividends from such investments are recognized in profit or loss as other income when the Company''s right to receive payments is established.
(iii) Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its financial assets carried at amortized cost. The impairment methodology applied depends on whether there has been an increase in credit risk.
For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
(iv) Derecognition of financial assets
A financial asset is derecognized only when
- The Company has transferred the rights to receive cash flows from the financial asset or
- Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
- Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset.
(k) Derivatives
Derivatives are taken as the hedging instrument by the Company.
For derivatives taken against underlying asset/liability or that are used to hedge forecast transactions, the Company generally designates only the change in fair value of the forward contract related to the spot component and aligned forward element on reporting date.
Gains or losses relating to the effective portion of the change in the spot component and aligned forward element of the forward contracts are recognized in Statement of profit and loss.
(l) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
(m) Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset''s carrying amount or recognized 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 derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Transition to Ind AS:
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2015 measured as per the IGAAP and use that carrying value as the deemed cost of the property, plant and equipment. (Refer Note 2A)
Depreciation and amortization methods and useful lives are reviewed periodically, including at each financial year end.
An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of profit and loss.
(n) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid or not due for payment. The amounts are unsecured and are usually paid as per the agreed payment terms. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
(o) Borrowings
Borrowings are initially recognized at fair value and are subsequently measured at amortized cost. In case of foreign currency loan, any difference between the proceeds received and repayment amount is recognized in the Statement of profit and loss.
Borrowings are derecognized from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.
(p) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
(q) Provisions and contingent liabilities:
Provisions are recognized 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. These are reviewed at each reporting period and reflect the best current estimate. Provisions are not recognized for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
(r) Employee benefits
Current employee benefits obligations:
All employee benefits payable within twelve months of service such as salaries, wages, bonus, ex-gratia, medical benefits etc. are classified as current employee benefits and are recognized in the Statement of Profit and Loss as an expense and are presented as current employee benefit obligations in the Balance sheet at the undiscounted amount on an accrual basis.
Termination benefits are recognized as an expense as and when incurred.
Short-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees.
Defined contribution plans
Contributions to defined contribution schemes such as contribution to Provident Fund, Super annotation fund, Employees'' State Insurance Corporation, National Pension Scheme and Labours Welfare Fund are charged as an expense to the Statement of Profit and Loss based on the amount of contribution required to be made as and when services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
Defined benefit plans
Gratuity: The Company provides for gratuity, a defined benefit plan (the âGratuity Planâ) 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 Company''s liability is actuarially determined (using the Projected Unit Credit method) by an independent actuary at the end of each year. Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income.
Non-current compensated absences: The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore 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. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the Balance Sheet if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.
(s) Contributed equity
Equity shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(t) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorized and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
(u) Earnings per share
Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the period.
(v) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off in lakhs as per the requirement of Schedule
Mar 31, 2016
1. Company information
INEOS STYROLUTION INDIA LIMITED (the ''Company'') is a public limited Company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The Company was previously registered as Styrolution ABS (India) Limited and changed its name on 18 March, 2016 pursuant to special resolution passed by the shareholders of the company through Postal Ballot (including e-voting) on 25 February 2016 and subsequent approval from Registrar of Companies, Gujarat. The Company is engaged in manufacture, trading and sale of "Engineering Thermoplastics". The Company has manufacturing facilities at Nandesari, Moxi, Katol and Dahej and Research and Development centre at Moxi in Gujarat.
2. Summary of significant accounting policies:
A. Basis of preparation
These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under section133 of the Companies Act, 2013 (âActâ) read with rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently followed. The financial statements are presented in Indian Rupees rounded off to the nearest lakhs.
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Act.
Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in current and future periods.
B. Fixed assets and depreciation / amortisation:
Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation / impairment. Cost comprises of cost of acquisition, cost of improvements and any attributable cost of bringing the asset to the condition for its intended use. Interest on loans taken for procurement of specific qualifying assets accrued up to the date of acquisition/installation of the said assets is capitalised. Other borrowing costs are recognised as an expense in the period in which they are incurred.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Depreciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased/sold during a period is proportionately charged. The Management estimates the useful lives for the other fixed assets as follows: (1> Based on technical evaluation, the management believes that the useful life given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets are different from the useful lives as prescribed under Part C of Schedule II of the CompaniesAct2013.
Depreciation and amortization methods, useful lives and residual values are reviewed periodically, including at each financial year end.
Leasehold land is amortised on straight line basis over the period of lease.
Tangible fixed assets under construction are disclosed as capital work-in-progress.
C. Investments:
i) Long-term Investments are stated at cost, less other than temporary diminution in value, if any.
ii) Current Investments are stated at cost or market value, whichever is lower.
iii) Income on investment:
Dividend income is accounted when the right to receive is established.
D. Inventories:
Inventories are valued at the lower of cost and net realisable value, which are determined as follows:
i) Raw Materials (including stock lying at terminals), Packing Materials and Stores and Spares are valued at weighted average cost after taking credit for CENVAT, wherever applicable and Goods-in-transit at cost.
ii) The cost of Work-in-progress and Finished Goods comprises of raw materials, direct labour, other direct costs and related production overheads based on normal capacity and Excise duty as applicable. Net realizable value is the estimate of the selling price less estimated cost of completion and estimated cost necessary to make the sale in the ordinary course of business as applicable.
iii) Customs Duty as applicable is included in the cost of Raw Materials lying in stock.
E. Revenue recognition:
The Company recognises sales at the point of transfer of significant risks and rewards of ownership to the customers. Sales are net of Sales Tax and returns.
Revenue in respect of Duty Drawback, Insurance and other claims is recognised on accrual basis to the extent the ultimate realisation is reasonably certain. Interest income is recognised in the time proportion basis taking into account the amount invested and rate of interest. Indent Commission income is recognised on accrual basis.
F. Research and development:
Capital expenditure on Research and Development is treated in the same manner as Fixed Assets. The revenue expenditure on Research and Development is charged off as an expense in the year in which it is incurred.
G. Foreign currency transactions:
The transactions in foreign currencies are accounted at the exchange rate prevailing on the date of transactions. Gain or loss resulting from the settlement of such transaction and from the year end translation at the exchange rate prevailing on the balance sheet date of monetary assets and liabilities denominated in foreign currency are recognised in the Statement of Profit and Loss.
Premium or discount in respect of forward contracts obtained for underlying transaction is accounted over the period of contracts. The exchange difference measured by the change in rate between date of inception of forward contract and date of balance sheet is applied on foreign currency amount of the forward contract and is recognised in the Statement of Profit and Loss.
Forward contracts to which Accounting Standard (AS) 11 - ''The Effect of Change in Foreign Exchange Rates'' is applicable are recorded based on the accounting policy as stated above. Other derivative contracts, including forward foreign exchange contracts, to which the aforesaid accounting standard is not applicable, are marked to market at the rate on the Balance Sheet date and the resultant exchange losses are recognised in the Statement of Profit and Loss and gain, if any, is not recognized.
H. Income taxes:
Income tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).
Current tax amount is measured at the amount expected to be paid to (recovered from) the taxation authorities, using applicable tax rates and tax laws.
Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised, however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. At each Balance Sheet date, the Company reassesses unrecognised deferred tax assets, if any.
Minimum Alternative Tax (''MAT'') under the provisions of the Income-tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognised as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.
I. Employee benefits:
Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognized in the Statement of Profit and Loss as an expense at the undiscounted amount on an accrual basis.
Post Employment Employee Benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund and employee state insurance contribution to Government administered fund scheme which are defined contribution plans. The Company makes specified annual contribution towards superannuation fund to Life Insurance Corporation of India. The Companyâs contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined benefit plans
Gratuity: The Company provides for gratuity, a defined benefits plan (the âGratuity Planâ) 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 employeeâs salary and the tenure of employment. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) by an independent actuary at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.
Compensated Absences: Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year end are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences.
Accumulated compensated absences, which are expected to be availed beyond 12 months from the end of the year end, are treated as other long term employee benefits. The Companyâs liability is actuarially determined (using the Projected Unit Credit method) by an independent actuary at the end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise.
J. Provision and Contingent Liabilities
The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation for which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect current best estimates. Contingent asset, are neither disclosed nor recognised in the financial statements.
K. Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date for any indication of impairment based on internal/external factors. Where the carrying value exceeds the estimated recoverable amount, provision for impairment is made to adjust the carrying value to the recoverable amount. The recoverable amount is the greater of the assets estimated net realizable value and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using an appropriate discounting rate. If at the Balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost.
L. Operating lease
Lease rentals in respect of assets acquired under operating lease are recognised as an expense in the statement of profit and loss on a straight line basis.
M. Earnings per share
The basic earnings per share are computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period. Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.
N. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction of qualifying assets are capitalised. Other borrowing costs are recognised as an expense in the period in which they are incurred.
On 28th January, 2014, Styrolution (Jersey) Limited has transferred its entire holding of 13,189,218 (75%) equity shares to Styrolution South East Asia Pte Ltd., Singapore. Accordingly, the holding company of the Company is Styrolution South East Asia Pte. Ltd., Singapore with effect from 28th January, 2014.
Mar 31, 2015
A. Basis of preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on an accrual basis. These financial statements have
been prepared to comply in all material aspects with the accounting
standards notified under Section 211(3C) [Companies (Accounting
Standards) Rules, 2006, as amended], read with General Circular 15/2013
dated 13 September, 2013 issued by the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013 and other relevant
provisions of the Companies Act, 1956 'the Act'. The financial
statements are presented in Indian Rupees rounded off to the nearest
lakhs.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the revised Schedule VI.
Use of estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and reported amounts of assets, liabilities, income
and expenses and the disclosure of contingent liabilities on the date
of the financial statements. Actual results could differ from those
estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Any revision to accounting estimates is recognised
prospectively in current and future periods.
B. Fixed assets and depreciation / amortisation:
Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation
/ impairment. Cost comprises of cost of acquisition, cost of
improvements and any attributable cost of bringing the asset to the
condition for its intended use. Interest on loans taken for procurement
of specific qualifying assets accrued up to the date of
acquisition/installation of the said assets is capitalised. Other
borrowing costs are recognised as an expense in the period in which
they are incurred.
Depreciation for the year has been provided on all the tangible fixed
assets (except in the case of leasehold land which is being amortised
over the period of the lease) on the Straight Line Method at the rates
specified as per Schedule XIV to the Companies Act, 1956.
Leasehold land is amortised on straight line basis over the period of
lease.
Tangible fixed assets under construction are disclosed as capital
work-in-progress.
C. Investments:
i) Long term Investments are stated at cost, less other than temporary
diminution in value, if any.
ii) Current Investments are stated at cost or market value, whichever
is lower.
iii) Income on investment:
Dividend income is accounted when the right to receive is established.
D. Inventories:
Inventories are valued at the lower of cost and net realisable value,
which are determined as follows:
i) Raw Materials (including stock lying at terminals), Packing
Materials and Stores and Spares are valued at moving weighted average
cost after taking credit for CENVAT, wherever applicable and Goods
-in-transit at cost.
ii) The cost of Work-in-progress and Finished Goods comprises of raw
materials, direct labour, other direct costs and related production
overheads based on normal capacity and Excise duty as applicable. Net
realizable value is the estimate of the selling price less estimated
cost of completion and estimated cost necessary to make the sale in the
ordinary course of business as applicable.
iii) Customs Duty as applicable is included in the cost of Raw
Materials lying in stock.
E. Revenue recognition:
The Company recognises sales at the point of transfer of significant
risks and rewards of ownership to the customers. Sales are net of Sales
Tax and returns.
Revenue in respect of Duty Draw back, Insurance and other claims is
recognised on accrual basis to the extent the ultimate realisation is
reasonably certain. Interest income is recognised in the time
proportion basis taking into account the amount invested and rate of
interest. Indent Commission income is recognised on accrual basis.
F. Research and development:
Capital expenditure on Research and Development is treated in the same
manner as Fixed Assets. The revenue expenditure on Research and
Development is charged off as an expense in the year in which it is
incurred.
G. Foreign currency transactions:
The transactions in foreign currencies are accounted at the exchange
rate prevailing on the date of transactions. Gain or loss resulting
from the settlement of such transaction and from the year end
translation at the exchange rate prevailing on the balance sheet date
of monetary assets and liabilities denominated in foreign currency are
recognised in the Statement of Profit and Loss.
Premium or discount in respect of forward contracts obtained for
underlying transaction is accounted over the period of contracts. The
exchange difference measured by the change in rate between date of
inception of forward contract and date of balance sheet is applied on
foreign currency amount of the forward contract and is recognised in
the Statement of Profit and Loss.
Forward contracts to which Accounting Standard (AS) 11 - 'The Effect of
Change in Foreign Exchange Rates' is applicable, the accounting policy
as stated above is followed. In respect of other derivative contracts
including forward foreign exchange contracts to which the aforesaid
accounting standard is not applicable are marked to market at the rate
on the Balance Sheet date. The resultant exchange differences are
recognised in the Statement of Profit and Loss.
H. Current and deferred tax:
Income tax expense comprises current tax (i.e. amount of tax for the
year determined in accordance with the Income Tax Act, 1961) and
deferred tax charge or credit (reflecting the tax effects of timing
differences between accounting income and taxable income for the
period).
Current tax amount is measured at the amount expected to be paid to
(recovered from) the taxation authorities, using applicable tax rates
and tax laws.
Deferred tax is recognised for all the timing differences, subject to
the consideration of prudence in respect of deferred tax assets.
Deferred tax assets are recognised and carried forward only to the
extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised, however, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are
recognised only if there is virtual certainty supported by convincing
evidence that sufficient future taxable income will be available
against which such deferred tax assets can be realised. Deferred tax
assets and liabilities are measured using the tax rates and tax laws
that have been enacted or substantively enacted by the Balance Sheet
date. At each Balance Sheet date, the Company reassesses unrecognised
deferred tax assets, if any.
I. Employee benefits:
Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the service are classified as short term employee benefits and are
recognized in the Statement of Profit and Loss as an expense at the
undiscounted amount on an accrual basis.
Post Employment Employee Benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under
which an entity pays specified contributions to a separate entity and
has no obligation to pay any further amounts. The Company makes
specified monthly contributions towards employee provident fund and
employee state insurance contribution to Government administered fund
scheme which are defined contribution plans. The Company makes specified
annual contribution towards superannuation fund to Life Insurance
Corporation of India. The Company's contribution is recognised as an
expense in the Statement of Profit and Loss during the period in which
the employee renders the related service.
Defined benefit plans
Gratuity: 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 Company's liability
is actuarially determined (using the Projected Unit Credit method) by
an independent actuary at the end of each year. Actuarial losses/ gains
are recognised in the Statement of Profit and Loss in the year in which
they arise.
Compensated Absences: Accumulated compensated absences, which are
expected to be availed or encashed within 12 months from the end of the
year end are treated as short term employee benefits. The obligation
towards the same is measured at the expected cost of accumulating
compensated absences.
Accumulated compensated absences, which are expected to be availed
beyond 12 months from the end of the year end are treated as other long
term employee benefits. The Company's liability is actuarially
determined (using the Projected Unit Credit method) by an independent
actuary at the end of each year. Actuarial losses/ gains are recognised
in the Statement of Profit and Loss in the year in which they arise.
J. Provision and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation for which the likelihood of outflow
of resources is remote, no provision or disclosure is made.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the balance
sheet date. These are reviewed at each balance sheet date and adjusted
to reflect current best estimates. Contingent asset, are neither
disclosed or recognised in the financial statements.
K. Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date
for any indication of impairment based on internal/ external factors.
Where the carrying value exceeds the estimated recoverable amount,
provision for impairment is made to adjust the carrying value to the
recoverable amount. The recoverable amount is the greater of the assets
estimated net realizable value and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present
value using an appropriate discounting rate. If at the Balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciable
historical cost.
L. Operating lease
Lease rentals in respect of assets acquired under operating lease are
recognised as an expense in the statement of profit and loss on a
straight line basis.
M. Earnings per share
The basic earnings per share are computed by dividing the net profit
attributable to the equity shareholders for the year by the weighted
average number of equity shares outstanding during the reporting
period. Diluted EPS is computed by dividing the net profit attributable
to the equity shareholders for the year by the weighted average number
of equity and dilutive equity equivalent shares outstanding during the
year, except where the results would be anti-dilutive.
N. Borrowing costs
Borrowing costs that are attributable to the acquisition, construction
of qualifying assets are capitalised. Other borrowing costs are
recognised as an expense in the period in which they are incurred.
Dec 31, 2013
A. Basis of preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under Section 211(3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and other relevant provisions of
the Companies Act, 1956 ''the Act''. The financial statements are
presented in Indian Rupees rounded off to the nearest lakhs.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the revised Schedule VI.
Use of estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires management to make
judgments, estimates and assumptions that affect the application of
accounting policies and reported amounts of assets, liabilities, income
and expenses and the disclosure of contingent liabilities on the date
of the financial statements. Actual results could differ from those
estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Any revision to accounting estimates is recognised
prospectively in current and future periods.
B. Fixed assets and depreciation / amortisation:
Tangible fixed assets
Tangible fixed assets are stated at cost less accumulated depreciation
/ impairment. Cost comprises of cost of acquisition, cost of
improvements and any attributable cost of bringing the asset to the
condition for its intended use. Interest on loans taken for procurement
of specific qualifying assets accrued up to the date of acquisition/
installation of the said assets is capitalised.
Depreciation for the year has been provided on all the tangible fixed
assets (except in the case of leasehold land which is being amortised
over the period of the lease) on the Straight Line Method at the rates
specified as per Schedule XIV to the Companies Act, 1956.
Leasehold land is amortised on straight line basis over the period of
lease.
Tangible fixed assets under construction are disclosed as capital
work-in-progress.
C. Investments:
i) Long term Investments are stated at cost, less other than temporary
diminution in value, if any. ii) Current Investments are stated at
cost or market value, whichever is lower. iii) Income on investment:
Dividend income is accounted when the right to receive is established.
D. Inventories:
Inventories are valued at the lower of cost and net realisable value,
which are determined as follows:
i) Raw Materials (including stock lying at terminals), Packing
Materials and Stores and Spares are valued at daily moving weighted
average cost after taking credit for CENVAT, wherever applicable and
Goods-in-transit at cost. ii) The cost of Work-in-progress and
Finished Goods comprises of raw materials, direct labour, other direct
costs and related production overheads and Excise duty as applicable.
Net realizable value is the estimate of the selling price in the
ordinary course of business as applicable. iii) Customs Duty as
applicable is included in the cost of Raw Materials lying in stock.
E. Revenue recognition:
The Company recognises sales at the point of transfer of significant
risks and rewards of ownership to the customers. Sales are net of
Sales Tax and returns.
Revenue in respect of Duty Drawback, Insurance and other claims is
recognised on accrual basis to the extent the ultimate realisation is
reasonably certain. Interest income is recognised in the time
proportion basis taking into accounts the amount invested and rate of
interest. Indent Commission income is recognised on accrual basis.
F. Research and development:
Capital expenditure on Research and Development is treated in the same
manner as Fixed Assets. The revenue expenditure on Research and
Development is charged off as an expense in the year in which it is
incurred.
G. Foreign currency transactions:
The transactions in foreign currencies are accounted at the exchange
rate prevailing on the date of transactions. Gain or loss resulting
from the settlement of such transaction and from the year end
translation at the exchange rate prevailing on the balance sheet date of
monetary assets and liabilities denominated in foreign currency are
recognised in the Statement of Profit and Loss.
Premium or discount in respect of forward contracts obtained for
underlying transaction is accounted over the period of contracts. The
exchange difference measured by the change in rate between date of
inception of forward contract and date of balance sheet is applied on
foreign currency amount of the forward contract and is recognised in
the Statement of Profit and Loss.
H. Current and deferred tax:
Income tax expense comprises current tax (i.e. amount of tax for the
year determined in accordance with the Income Tax Act, 1961) and
deferred tax charge or credit (reflecting the tax effects of timing
differences between accounting income and taxable income for the
period).
Current tax amount is measured at the amount expected to be paid to
(recovered from) the taxation authorities, using applicable tax rates
and tax laws.
Deferred tax is recognised for all the timing differences, subject to
the consideration of prudence in respect of deferred tax assets.
Deferred tax assets are recognised and carried forward only to the
extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised, however, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are
recognised only if there is virtual certainty supported by convincing
evidence that sufficient future taxable income will be available
against which such deferred tax assets can be realised. Deferred tax
assets and liabilities are measured using the tax rates and tax laws
that have been enacted or substantively enacted by the Balance Sheet
date. At each Balance Sheet date, the Company reassesses unrecognised
deferred tax assets, if any.
I. Employee benefits:
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under
which an entity pays specified contributions to a separate entity and
has no obligation to pay any further amounts. The Company makes
specified monthly contributions towards employee provident fund and
employee state insurance contribution to Government administered fund
scheme which are defined contribution plans. The Company makes
specified annual contribution towards superannuation fund to Life
Insurance Corporation of India. The Company''s contribution is
recognised as an expense in the Statement of Profit and Loss during the
period in which the employee renders the related service.
Defined benefit plans
Gratuity: 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 Company''s liability
is actuarially determined (using the Projected Unit Credit method) by
an independent actuary at the end of each year. Actuarial losses/
gains are recognised in the Statement of Profit and Loss in the year in
which they arise.
Compensated Absences:
Accumulated compensated absences, which are expected to be availed or
encased within 12 months from the end of the year end are treated as
short term employee benefits. The obligation towards the same is
measured at the expected cost of accumulating compensated absences.
Accumulated compensated absences, which are expected to be availed
beyond 12 months from the end of the year end are treated as other long
term employee benefits. The Company''s liability is actuarially
determined (using the Projected Unit Credit method) by an independent
actuary at the end of each year. Actuarial losses/ gains are recognised
in the Statement of Profit and Loss in the year in which they arise.
J. Provision and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the balance
sheet date. These are reviewed at each balance sheet date and adjusted
to reflect current best estimates.
K. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Statement of Profit and Loss. If at the balance sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount.
L. Operating lease
Lease rentals in respect of assets acquired under operating lease are
recognised as an expense in the statement of profit and loss on a
straight line basis.
M. Earnings per share
The basic and diluted earnings per share (''EPS'') is computed by dividing
the net profit after tax for the year by the weighted average number of
equity shares outstanding during the year.
Consequent upon the formation of Global joint venture, M/s. Styrolution
(Jersey) Limited the acquirer, along with persons acting in concert had
in terms of SEBI (SAST) Regulations 1997, made a public offer to the
shareholders of the Company, vide Offer document dated January 5, 2012.
M/s. Styrolution (Jersey) Limited acquired 703,075 shares representing
4% of the capital of the Company from the public as on March 2012.
Subsequently to comply with the listing guidelines the promoters M/s
Styrolution (Jersey) Limited made offer for sale of 12.33% of the share
capital of the Company in May 2013. As a result, the total shareholding
of Styrolution (Jersey) Limited is now 75.00% of the capital of the
Company.
Subsequent to the year end, on 28th January, 2014, Styrolution (Jersey)
Limited has transferred its entire holding of 13,189,218 (75%) equity
shares to Styrolution South East Asia Pvt Ltd, Singapore. Accordingly,
the holding company of the Company is Styrolution South East Asia Pte.
Ltd., Singapore with effect from 28th January, 2014.
b. Rights, preferences and restrictions attached to the shares
The Company has one class of equity share having a par value of Rs.
10/- per share. Each shareholder is eligible for one vote per share
held. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend. In the event of liquidation, the
equity shareholders are eligible to receive remaining assets of the
Company after distribution of all preferential amounts, in proportion
to their shareholding.
e. Information on equity shares allotted without receipt of cash or
allotted as bonus shares or shares bought back during five years
immediately preceding December 31,2013.
No shares are allotted as bonus or allotted without receipt of cash
during past five years and there has been no buy back of shares.
Dec 31, 2012
A. Basis of preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under Section 211 (3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and other relevant provisions of
the Companies Act, 1956.The financial statements are presented in
Indian Rupees in Lakhs.
This is the first year of application of the revised Schedule VI to the
Companies Act, 1956 for the preparation of financial statements of the
company. The revised schedule VI introduces some significant conceptual
changes as well as new disclosures. These include classification of
all assets and liabilities into current and non-current. The previous
year figures have also undergone a major reclassification to comply
with the requirements of the revised Schedule VI.
Use of estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires manage- ment to make
judgements, estimates and assumptions that affect the application of
accounting policies and reported amounts of assets, liabilities, income
and expenses and the disclosure of contingent liabilities on the date
of the financial statements. Actual results could differ from those
estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Any revision to accounting estimates is recognised
prospectively in current and future periods.
B. Fixed assets and depreciation:
Tangible fixed assets
i) Tangible fixed assets are stated at cost less accumulated
depreciation / impairement. Cost comprises of cost of acquisition, cost
of improvements and any attributable cost of bringing the asset to the
condition for its intended use. Interest on loans taken for procurement
of specific qualifying assets accrued up to the date of
acquisition/installation of the said assets is capitalised.
ii) Depreciation for the year has been provided on all the tangible
fixed assets (except in the case of leasehold land which is being
amortised over the period of the lease) on the Straight Line Method at
the rates specified as per Schedule XIV to the Companies Act, 1956.
Tangible fixed assets under construction are disclosed as capital
work-in-progress.
C. Investments:
i) Long term Investments are stated at cost, less other than temporary
diminution in value, if any.
ii) Current Investments are stated at cost or market value, whichever
is lower.
iii) Income on investment:
Dividend income is accounted when the right to receive is established.
D. Inventories:
Inventories are valued at the lower of cost and net realisable value,
which are determined as follows:
i) Raw Materials (including stock lying at terminals), Packing
Materials and Stores and Spares are valued at moving weighted average
cost after taking credit for CENVAT, wherever applicable and
Goods-in-transit at cost.
ii) The cost of Work-in-progress and Finished Goods comprises of raw
materials, direct labour, other direct costs and related production
overheads and Excise duty as applicable. Net realizable value is the
estimate of the selling price in the ordinary course of business as
applicable.
iii) Customs Duty as applicable is included in the cost of Raw
Materials lying in stock.
E. Revenue recognition:
The Company recognises sales at the point of transfer of significant
risks and rewards of ownership to the customers. Sales are net of Sales
Tax and returns.
Revenue in respect of Duty Draw back, Insurance and other claims is
recognised only when these claims are accepted. Interest income is
recognised in the time proportion basis taking into accounts the amount
invested and rate of interest.
F. Research and development:
Capital expenditure on Research and Development is treated in the same
manner as Fixed Assets. The revenue expenditure on Research and
Development is charged off as an expense in the year in which it is
incurred.
G. Foreign currency transactions:
The transactions in foreign currencies are accounted at the exchange
rate prevailing on the date of transactions. Gain or loss resulting
from the settlement of such transaction and from the year end
translation at the exhange rate prevailing on the balance sheet date of
monetary assets and liabilities denominated in foreign currency are
recognised in the Statement of Profit and Loss.
Premium or discount in respect of forward contracts obtained for
underlying transaction is accounted over the period of contracts. The
exchange difference measured by the change in rate between date of
inception of forward contract and date of balance sheet is applied on
foreign currency amount of the forward contract and is recognised in
the Statement of Profit and Loss.
H. Current and deferred tax:
Tax expense for the period, comprising current tax and deferred tax,
are included in the determination of the net profit or loss for the
period.
Provision for current tax is based on the results for the year ended 31
December 2012, in accordance with the provisions of the Income Tax Act,
1961. The final tax liability will be determined on the basis of the
operations for the year 1 April 2012 to 31 March 2013, being the tax
year of the Company.
Deferred tax is recognised for all the timing differences, subject to
the consideration of prudence in respect of deferred tax assets.
Deferred tax assets are recognised and carried forward only to the
extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised. Deferred tax assets and liabilities are measured using
the tax rates and tax laws that have been enacted or substantively
enacted by the Balance Sheet date. At each Balance Sheet date, the
Company reassesses unrecognised deferred tax assets, if any.
I. Employee benefits:
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under
which an entity pays specified contributions to a separate entity and
has no obligation to pay any further amounts. The Company makes
specified monthly contributions towards employee provident fund and
employee state insurance contribution to Government administered fund
scheme which are defined contribu- tion plans. The Company makes
specified annual contribution towards superannuation fund to Life
Insurance Corporation of India. The Company''s contribution is
recognised as an expense in the Statement of Profit and Loss during the
period in which the employee renders the related service.
Defined benefit plans
Gratuity: The Company provides for gratuity, a defined benefit plan
(the "Gratuity Plan") covering eligible employees in accor- dance with
the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump
sum payment to vested employees at retire- ment, death, incapacitation
or termination of employment, of an amount based on the respective
employee''s salary and the tenure of employment. The Company''s liability
is actuarially determined (using the Projected Unit Credit method) by
an indepen- dent actuary at the end of each year. Actuarial losses/
gains are recognised in the Statement of Profit and Loss in the year in
which they arise.
Compensated Absences: Accumulated compensated absences, which are
expected to be availed or encashed within 12 months from the end of the
year end are treated as short term employee benefits. The obligation
towards the same is measured at the expected cost of accumulating
compensated absences.
Accumulated compensated absences, which are expected to be availed
beyond 12 months from the end of the year end are treated as other long
term employee benefits. The Company''s liability is actuarially
determined (using the Projected Unit Credit method) by an independent
actuary at the end of each year. Actuarial losses/ gains are recognised
in the Statement of Profit and Loss in the year in which they arise.
J. Provision and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the balance
sheet date. These are reviewed at each balance sheet date and adjusted
to reflect current best estimates.
K. Impairment of asset
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Statement of Profit and Loss. If at the balance sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount.
L. Operating lease
Lease rentals in respect of assets acquired under operating lease are
recognised as an expense in the statement of profit and loss on a
straight line basis.
Consequent upon the formation of 50:50 Global joint venture between
INEOS and BASF, bringing together key Styrenics business of the two
joint venture partners worldwide effective October 1, 2011, M/s.
Styrolution (Jersey) Limited (formerly known as INEOS ABS (Jersey)
Limited), the acquirer, along with persons acting in concert has in
terms of SEBI (SAST) Regulations 1997, made a public offer to the
shareholders of the Company, vide Offer document dated January 5, 2012.
The cash offer price is Rs. 606.81 (Rupees six hundred six and Paise
eighty one only) for one fully paid up equity share of Rs. 10 each to
acquire maximum of 2,931,920 equity shares representing balance 16.67%
of the capital of the Company. M/s. Styrolution (Jersey) Limited has
acquired 703,075 shares representing 4% of the capital of the Company
from the public. As a result the total shareholding of M/s.
Styrolution (Jersey) Limited is now 87.33% of the capital of the
Company. The Board of Directors has since been reconstituted.
The Company''s name has been changed to Styrolution ABS (India) Limited
after receiving approval from Registrar of Companies, effective May
1,2012.
Dec 31, 2011
A. Basis of Accounting:
The Financial Statements are prepared on accrual basis of accounting,
in conformity with the applicable accounting principles generally
accepted in India, and comply with the applicable accounting standards
notified u/s 211(3C) of the Companies Act,1956 and the relevant
provisions of the Act.
B. Fixed Assets and Depreciation:
I) Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises of cost of acquisition, cost of improvements
and any attributable cost of bringing the asset to the condition for
its intended use. Interest on loans taken for procurement of specific
assets accrued up to the date of acquisition/installation of the said
assets is capitalised.
ii) Depreciation for the year has been provided on all the fixed assets
(except in the case of leasehold land which is being amortised over the
period of the lease) on the Straight Line Method at the rates specified
as per Schedule XIV to the Companies Act, 1956.
C. Investments:
I) Investments, being long term, are stated at cost, less other than
temporary diminution in value, if any.
ii) Current Investments are stated at cost or fair value whichever is
lower. iii) Income on investment:
Dividend income is accounted when the right to receive is established.
D. Inventories:
Inventories are valued at the lower of cost and net realisable values,
which are determined as follows:
i) Raw Materials, (including stock lying at terminals) Packing
Materials, Traded Goods and Stores and Spares are valued at moving
weighted average cost after taking credit for CENVAT,wherever applicable
and Material-in-transit at cost.
ii) The cost of work-in-progress and finished goods comprises of raw
materials, direct labour, other direct costs and related production
overheads and Excise duty as applicable. Net realizable value is the
estimate of the selling price in the ordinary course of business as
applicable.
iii) Customs Duty as applicable is included in the cost of traded goods
and raw materials lying in stock.
E. Revenue recognition:
The Company recognises sales at the point of transfer of significant
risks and rewards of ownership to the customers. Sales are net of Sales
Tax, Excise Duty and returns.
Revenue in respect of Duty Draw back, Insurance and other claims is
recognised only when these claims are accepted.
F. Research and Development:
Capital expenditure on Research and Development is treated in the same
manner as Fixed Assets. The Revenue expenditure on Research and
Development is charged off as an expense in the year in which it is
incurred.
G. Foreign Currency Transactions:
The transactions in foreign currencies are accounted at the exchange
rate prevailing on the date of transactions. Gain or loss resulting
from the settlement of such transaction and from the translation of
monetary assets and liabilities denominated in foreign currency are
recognised in the Profit and Loss Account.
Premium or discount in respect of forward contracts is accounted over
the period of contracts. The exchange difference measured by the change
in rate between date of inception of forward contract and date of
balance sheet is applied on foreign currency amount of the forward
contract and is recognised in the profit and loss account.
H. Taxes on Income :
Current Tax:
Current Tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred Tax:
Deferred Tax resulting from timing differences between book and tax
profits is accounted for under the liability method, at the current
rate of tax, to the extent that the timing differences are expected to
crystallise.
I. Retirement Benefits:
a) In case of Defined Contribution plans, the Company's contributions
to these plans are charged to the Profit and Loss Account as incurred.
Liability for Defined Benefit plans is provided on the basis of
valuations, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial valuation method used for measuring the
liability is the Projected Unit Credit method. The obligations are
measured as the present value of estimated future cash flows discounted
at rates reflecting the prevailing market yields of Indian Government
securities as at the Balance Sheet date for the estimated term of the
obligations. The estimate of future salary increases considered takes
into account the inflation, seniority, promotion and other relevant
factors. The expected rate of return of plan assets is the Company's
expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
Plan assets are measured at fair value as at the Balance Sheet date.
The liability for leave encashment and compensated absences is provided
on the basis of valuation, as at the Balance Sheet date, carried out by
an independent actuary.
b) Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised in the
Profit and Loss Account in the year in which they arise.
J. Provision and Contingent Liabilities:
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the balance
sheet date. These are reviewed at each balance sheet date and adjusted
to reflect current best estimates.
K. Impairment of Asset :
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Profit and Loss Account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount.
Dec 31, 2010
A. Basis of Accounting
The Financial Statements are prepared on accrual basis of accounting,
in conformity with the applicable accounting principles generally
accepted in India, and comply with the applicable accounting standards
notified u/s 211(3C) of the Companies Act, 1956 and the relevant
provisions of the Act.
B. Fixed Assets and Depreciation
i) Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises of cost of acquisition, cost of improvements and any
attributable cost of bringing the asset to the condition for its
intended use. Interest on loans taken for procurement of specific
assets accrued up to the date of acquisition/installation of the said
assets is capitalised.
ii) Depreciation for the year has been provided on all the fixed assets
(except in the case of leasehold land which is being amortised over the
period of the lease) on the Straight Line Method at the rates specified
as per Schedule XIV to the Companies Act, 1956.
C. Investments
i) Investments, being long term, are stated at cost, less other than
temporary diminution in value, if any.
ii) Current Investments are stated at cost or fair value whichever is
lower.
iii) Income on investment:
Dividend income is accounted when the right to receive is established.
D. Inventories
Inventories are valued at the lower of cost and net realisable values,
which are determined as follows:
i) Raw Materials, Packing Materials, Stores and Spares are valued at
weighted average cost after taking credit for CENVAT, wherever
applicable.
ii) Work-in-process and Material-in-transit (including stock lying at
terminals) are valued at cost.
iii) Finished goods and traded goods are valued at lower of cost and
net realisable value.
iv) Customs Duty and Excise Duty as the case may be, are included in
the cost of finished products, traded goods and raw materials lying in
stock.
E. Revenue recognition
The Company recognises sales at the point of transfer of significant
risks and rewards of ownership to the customers. Sales are net of Sales
Tax, Excise Duty and returns.
Revenue in respect of Duty Draw back, Insurance and other claims is
recognised only when these claims are accepted.
F. Research and Development:
Capital expenditure on Research and Development is treated in the same
manner as Fixed Assets. The Revenue expenditure on Research and
Development is charged off as an expense in the year in which it is
incurred.
G. Foreign Currency Transactions
The transactions in foreign currencies are accounted at the exchange
rate prevailing on the date of transactions. Gain or loss resulting
from the settlement of such transaction and from the translation of
monetary assets and liabilities denominated in foreign currency are
recognised in the Profit and Loss Account.
Premium or discount in respect of forward contracts is accounted over
the period of contracts. The exchange difference measured by the change
in rate between date of inception of forward contract and date of
balance sheet is applied on foreign currency amount of the forward
contract and is recognised in the profit and loss account.
H. Taxes on Income
Current Tax
Current Tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred Tax
Deferred Tax resulting from timing differences between book and tax
profits is accounted for under the liability method, at the current
rate of tax, to the extent that the timing differences are expected to
crystallise.
I. Retirement Benefits
a) In case of Defined Contribution plans, the Companys contributions
to these plans are charged to the Profit and Loss Account as incurred.
Liability for Defined Benefit plans is provided on the basis of
valuations, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial valuation method used for measuring the
liability is the projected Unit Credit method. The obligatins are
measured as the present value of estimated future cashflows discounted
at rates reflecting the prevailing market yields of Indian Government
securities as at the Balance Sheet date for the estimated term of the
obligations. The estimate of future salary increases considered takes
into account the inflation, seniority, promotion and other relevant
factors. The expected rate of return of plan assets is the Companys
expectatin of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
Plan assets are measured at fair value as at the Balance Sheet date.
The liability for leave enchashment and compensated absences is
provided on the basis of valuation, as at the Balance Sheet date,
carried out by an independent actuary.
b) Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised in the
Profit and Loss Account in the year in which they arise.
J. Provision and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the balance
sheet date. These are reviewed at each balance sheet date and adjusted
to reflect current best estimates.
K Impairment of Asset
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Profit and Loss Account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount. 2010 2009 (Rupees 000) (Rupees 000)
Dec 31, 2009
A. Basis of Accounting
The Financial Statements are prepared on accrual basis of accounting,
in conformity with the applicable accounting principles generally
accepted in India, and comply with the applicable accounting standards
notified u/s 211(3C) of the Companies Act, 1956 and the relevant
provisions of the Act.
B. Fixed Assets and Depreciation
i) Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises of cost of acquisition, cost of improve- ments and any
attributable cost of bringing the asset to the condition for its
intended use. Interest on loans taken for procurement of specific
assets accrued up to the date of acquisition/installation of the said
assets is capitalised.
ii) Depreciation for the year has been provided on all the fixed assets
(except in the case of leasehold land which is being amortised over the
period of the lease) on the Straight Line Method at the rates specified
as per Schedule XIV to the Companies Act, 1956.
C. Investments
i) Investments, being long term, are stated at cost, less other than
temporary diminution in value, if any.
ii) Current Investments are stated at cost or fair value whichever is
lower.
iii) Income on investment: Dividend income is accounted when the right
to receive is established.
D. Inventories
Inventories are valued at the lower of cost and net realizable values,
which are determined as follows:
i) Raw Materials, Packing Materials, Stores and Spares are valued at
weighted average cost after taking credit for CENVAT, wherever
applicable.
ii) Work-in-process and Material-in-transit (including stock lying at
terminals) are valued at cost.
iii) Finished goods and traded goods are valued at lower of cost and
net realizable value.
iv) Customs Duty and Excise Duty as the case may be, are included in
the cost of finished products, traded goods and raw materials lying in
stock.
E Revenue recognition
The Company recognizes sales at the point of transfer of significant
risks and rewards of ownership to the customers. Sales are net of Sales
Tax, Excise Duty and returns.
Revenue in respect of Duty Draw back, Insurance and other claims is
recognised only when these claims are accepted.
F. Research and Development:
Capital expenditure on Research and Development is treated in the same
manner as Fixed Assets. The Revenue expenditure on Research and
Development is charged off as an expense in the year in which it is
incurred.
G Foreign Currency Transactions
The transactions in foreign currencies are accounted at the exchange
rate prevailing on the date of transactions. Gain or loss resulting
from the settlement of such transaction and from the translation of
monetary assets and liabilities denominated in foreign currency are
recognised in the Profit and Loss Account. In cases where they relate
to acquisition of fixed assets, they are adjusted to carrying cost of
such assets.Premium or discount in respect of forward contracts is
accounted over the period of contracts. The exchange difference
measured by the change in rate between date of inception of forward
contract and date of balance sheet is applied on foreign currency
amount of the forward contract and is recognized in the profit and loss
account.
H. Taxes on Income
Current Tax
Current Tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred Tax
Deferred Tax resulting from timing differences between book and tax
profits is accounted for under the liability method, at the current
rate of tax, to the extent that the timing differences are expected to
crystallise.
Fringe Benefit Tax:
Provision for Fringe Benefit Tax has been made in accordance with the
applicable Income Tax Laws prevailing for relevant Assessment Years.
1. Retirement Benefits
a) In case of Defined Contribution plans, the Companys contributions
to these plans are charged to the Profit and Loss Account as incurred.
Liability for Defined Benefit plans is provided on the basis of
valuations, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial valuation method used for measuring the
liability is the Projected Unit Credit method. The obligations are
measured as the present value of estimated future cashflows discounted
at rates reflecting the prevailing market yields of Indian Government
securities as at the Balance Sheet date for the estimated term of the
obligations. The estimate of future salary increases considered takes
into account the inflation, seniority, promotion and other relevant
factors. The expected rate of return of plan assets is the Companys
expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
Plan assets are measured at fair value as at the Balance Sheet date.
The Liability for leave encashment and compensated absences is provided
on the basis of valuation, as at the Balance Sheet date, carried out by
and independent actuary.
b) Actuarial gains and losses comprise experience adjustments and the
effects of changes in actuarial assumptions and are recognised in the
Profit and Loss Account in the year in which they arise.
J. Provision and Contingent Liabilities
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Provisions are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the balance
sheet date. These are reviewed at each balance sheet date and adjusted
to reflect current best estimates.
K Impairment of Asset
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of asset or the recoverable amount of cash
generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Profit and Loss Account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount.
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- Banker/Auditor/Registrar
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Company History
- Rights
- BSE Price History
- NSE Price History
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Styrenix Performance Materials Ltd. Key Financial Ratios
- Ratios
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Styrenix Performance Materials Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
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Styrenix Performance Materials Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
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Styrenix Performance Materials Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
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Styrenix Performance Materials Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
- Change of Name
