Accounting Policies of Poddar Pigments Ltd. Company
Mar 31, 2023
1 Corporate Information
Poddar Pigments Limited (the Company) is a public limited company domiciled in India, incorporated under the provisions of Companies Act, 1956 and presently being governed by the Companies Act 2013. Its shares are listed on Bombay Stock Exchange and National Stock Exchange of India. The Company is a manufacturer of Color & Additive Master batches for dope dyeing of man-made fibers, various plastic applications. These financial statement have been authorised for issue with a resolution of the Board of Directors on 29th May, 2023.
2 Basis of preparation
A Statement of Compliance
Company has adopted Indian accounting Standard (Referred to as âInd ASâ) as notified by Companies (Indian Accounting Standards) Rules 2015 (as amended) read with Section 133 of the Companies Act, 2013 with effect from 1st April, 2017. For all periods up to and including for the year ended 31st March, 2023, the company''s financial statements prepared complying in all material respects with the accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The accounting policies are applied consistently to all the periods presented in the financial statements.
B Basis of Measurement
The Financial statements have been prepared under historical cost convention on accrual basis, except for the items that have been measured at fair value as required by relevant Ind AS.The standalone financial statements are presented in Indian Rupees O, which is the Companyâs functional and presentation currency and all amounts are rounded to the nearest lakh C 00,000) and two decimals thereof, except as stated otherwise.
C Use of Estimates
In preparing Company''s financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the period in which the same is determined.
D Basis of classification Current and non-current
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is current when it is:
⢠Expected to be realized or intended to sold or consumed in normal operating cycle;
⢠Held primarily for the purpose of trading;
⢠Expected to be realized within twelve months after the reporting period; or
⢠Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as noncurrent.
A liability is current when:
⢠It is expected to be settled in normal operating cycle;
⢠It is held primarily for the purpose of trading;
⢠It is due to be settled within twelve months after the reporting period; or
⢠There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.
3 Significant accounting policies A Property Plant & Equipment
A.1 Initial recognition and measurement
An item of property, plant and equipments recognized as an asset if and only if 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.
Items of Property, Plant and Equipment are measured at cost less accumulated depreciation/amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset, inclusive of non-refundable taxes & duties, to the location and condition necessary for it to be capable of operating in the manner intended by management. When parts of an item of property, plant and equipment have different useful lifes, they are recognized separately. Items of spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalized. Property, Plant and Equipments which are not ready for intended use as on the date of Balance Sheet are disclosed as ''Capital Work-In-Progress ''includes value of Machinery lying at Bonded warehouse as at year end. The company had applied for the one time transition exemption of all considering the cost of the transition date i.e. 1st April, 2016 as the deemed cost under Ind-AS. Hence, regarded thereafter as historical cost.
A.2 Subsequent costs
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably. The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of Property, Plant and Equipment are recognized in profit or loss as incurred.
A.3 Derecognition
Property, Plant and Equipment are derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit and loss.
A.4 Depreciation/amortization
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lifes of each part of an item of Property, Plant and Equipment. Leasehold lands are amortized over the lease term unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.
Depreciation on additions to/deductions from property, plant and equipment during the year is charged on pro-rata basis from/up to the date on which the asset is available for use/disposed.
Depreciation on property, plant and equipment except leasehold land is provided on their estimated useful life as prescribed by Schedule II of Companies Act, 2013.
B Capital work-in-progress
The cost of self-constructed assets includes the cost of materials & direct labour, any other costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management and borrowing costs.
Expenses directly attributable to construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets.
C Intangible assets and intangible assets under development C.1 Recognition and measurement
Intangible assets are recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.
C.2 Derecognition
An intangible asset is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognized in the statement of profit and loss.
Intangible assets having definite life are amortized on straight line method in their useful life.
Inventories are valued âat lower of cost or net realizable valueâ except stock of residual products and scrap which are valued at net realizable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.
E Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and cash on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.
F.1.1 Initial recognition and measurement
All financial assets are recognized initially at fair value plus or minus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs are attributable to the acquisition or issue of the financial asset, otherwise charged to Statement of Profit & Loss.
F.1.2 Subsequent measurement
Financial assets are subsequently classified and measured at:
⢠Financial assets at amortised cost.
⢠Financial assets at fair value through profit and loss (FVTPL).
⢠Financial assets at fair value through other comprehensive income (FVOCI).
a) Trade Receivables
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses wherever applicable. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
b) Debt instruments
i) Measured at amortized cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss.
ii) Measured at FVTOCI (Fair Value through OCI)
A âdebt instrumentâ is classified as at the FVTOCI if
both of the following criteria are met:
(a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
(b) The assetâs contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the OCI. However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
iii) Measured at FVTPL (Fair value through profit or loss)
Debt instruments does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. The Company elects to classify the debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.
c) Equity Instruments
All investments in equity instruments measured at fair value.
Equity instrument valued at FVTOCI, and all fair value changes on the instruments, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment as the company transfers cumulative gain or loss within the equity.
Equity instruments if classified as FVTPL category are measured at fair value i.e. at NAV with all changes recognized in the profit and loss.
F.1.3 Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e. removed from the Companyâs balance sheet) when:
⢠The contractual rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its contractual rights to receive cash flows from the asset.
F.1.4 Impairment of Financial Asset
Expected credit losses are recognized for all
financial assets subsequent to initial recognition in Statement of Profit & Loss other than financials assets in FVTPL category.
For recognition of impairment loss on financial assets other than Trade receivables, the company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide impairment loss. However, If credit risk is increased significantly, lifetime ECL is used.
If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
For trade receivables Company applies âsimplified approachâ which requires expected lifetime losses to be recognized from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analyzed.
For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
F.2.1 Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as finance cost.
F.2.2 Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or prem ium on acquisition and any material transaction that are any integral part of the EIR. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
F.2.3 Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
F.3 Derivative financial instruments
The Company uses forwards to mitigate the risk of changes in exchange rates. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss.
Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to Statement of Profit and Loss over the period of maturity.
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a nonfinancial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
H Impairment of Non-Financial Assets
The Company, in accordance with the Indian Accounting Standard (Ind AS) 36 âImpairment of Assetsâ, has adopted the practice of assessing at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, then the company provides for the loss for impairment of Assets after estimating the recoverable amount of the assets.
I Provisions & Contingent Liabilities
(i) Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each reporting period and are adjusted to reflect the current best estimate.
(ii) Contingencies
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 or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Financial Statements. Contingent assets are not recognized in financial statements but are disclosed, if any.
J Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable and it is probable that future economic benefits will flow to the entity. Amount of sales are net of goods and service tax, sale returns, trade discounts and rebates but inclusive of excise duty. Revenue from sale of products is recognized when the significant risks and rewards of ownership of the products have been transferred to the buyer, and the amount of revenue can be measured reliably.
Company continues to account for export benefits on accrual basis based upon the concept of accrual in the year of utilisation of advance licences.
Dividend income is recognized when the right to receive the income is established.
Interest income is recognized, when no significant uncertainty as to measurability or collectability exists, on a time proportion basis taking into account the amount outstanding and the applicable interest rate , using the effective interest rate method (EIR).
K Foreign Currency Conversions/Transactions
Foreign Currency Transactions are recorded at the exchange rates prevailing on the date of the transactions. Gains and losses arising out of subsequent fluctuations are accounted for on actual payments or realisations as the case may be. Monetary assets and liabilities denominated in foreign currency as on Balance Sheet date are translated into functional currency at the exchange rates prevailing on that date and Exchange differences arising out of such conversion are recognised in the Statement of Profit and Loss.
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates to any business combination or to an item which is recognised directly in equity or in other comprehensive income.
Current tax expense is made on the basis of estimated taxable income for the current accounting period in accordance with the provisions of Income Tax Act, 1961 and judicial interpretations thereof as at the Balance Sheet date and takes into consideration various deductions and exemptions to which the Company is entitled to as well as the reliance placed by the Company on the legal advices received by it.
b) Deferred Tax
Deferred tax charge or credit reflects the tax effects of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date and are written-down or written-up to reflect the amount that is reasonably certain (as the case may be) to be realized.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation law. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. 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 that case, the tax is recognised in other comprehensive income or directly in equity, respectively.
M Employee Benefits
(i) Defined Contribution Plan
Employee benefits in the form of Provident Fund (with Government Authorities) are considered as defined contribution plan and the contributions are charged to the statement of Profit & Loss of the year when the contributions to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of Gratuity and Long term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. Other short term absences are provided based on past experience of leave availed. Actuarial Gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income (OCI) in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods. All other expenses related to defined benefit plans are recognized in Statement of Profit and Loss as employee benefit expenses.
General and Specific Borrowing Cost that are directly attributable to the acquisition or construction or production of qualifying assets are capitalized as part of the cost of such assets upto the date when such assets are ready for intended use. Qualified assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other borrowing costs are charged as expenses in the year in which they are incurred. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalisation.
O Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, net profit after tax during the year and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.
The Company, as a lessee, recognises a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset.
The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset. The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any re-measurement of the lease liability. The right-of-use assets is depreciated using the straightline method from the commencement date over the period of lease term.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the incremental borrowing rate of the company.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.
Q Research & Development
Research and development costs are recognized as expense in the period in which it is incurred. The company does not incur any development expenditure which are eligible for capitalisation under Para 57 ofIndAS 38.
Statement of cash flows is prepared in accordance with the indirect method prescribed in Ind AS-7 âStatement of cash flows â.
Mar 31, 2018
Significant accounting policies
A Property Plant & Equipment
A.1 Initial recognition and measurement
An item of property, plant and equipments recognized as an asset if and only if 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.
Items of Property, Plant and Equipment are measured at cost less accumulated depreciation/amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset, inclusive of non-refundable taxes & duties, to the location and condition necessary for it to be capable of operating in the manner intended by management. When parts of an item of property, plant and equipment have different useful lifes, they are recognized separately. Items of spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalized. Property, Plant and Equipments which are not ready for intended use as on the date of Balance Sheet are disclosed as âCapital Work-In-Progressâ. For compliance of Ind AS, written down value of Property Plant & Equipment has been taken all cost.
A.2 Subsequent costs
Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably. The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of Property, Plant and Equipment are recognized in profit or loss as incurred.
A.3 Derecognition
Property, Plant and Equipment are derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit and loss.
A.4 Depreciation/amortization
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lifes of each part of an item of Property, Plant and Equipment. Leasehold lands are amortized over the lease term unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.
Depreciation on additions to/deductions from property, plant and equipment during the year is charged on prorata basis from/up to the date on which the asset is available for use/disposed.
Depreciation on property, plant and equipment except leasehold land is provided on their estimated useful life as prescribed by Schedule II of Companies Act, 2013.
B Capital work-in-progress
The cost of self-constructed assets includes the cost of materials & direct labour, any other costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management and borrowing costs.
Expenses directly attributable to construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets.
C Intangible assets and intangible assets under development
C.1 Recognition and measurement
Intangible assets are recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.
C.2 Derecognition
An intangible asset is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognized in the statement of profit and loss.
C.3 Amortization
Intangible assets having definite life are amortized on straight line method in their useful life.
D Inventories
Inventories are valued âat lower of cost or net realizable valueâ except stock of residual products and scrap which are valued at net realizable value. The cost is computed on the weighted average basis. In case of finished goods and stock in process, cost is determined by considering material, labour, related overheads and duties thereon.
E Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and cash on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.
F Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
F.1 Financial assets:
F.1.1 Initial recognition and measurement
All financial assets are recognized initially at fair value plus or minus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs are attributable to the acquisition or issue of the financial asset, otherwise charged to Statement of Profit & Loss.
F.1.2 Subsequent measurement
Financial assets are subsequently classified and measured at:
- Financial assets at amortised cost
- Financial assets at fair value through profit and loss (FVTPL)
- Financial assets at fair value through other comprehensive income (FVOCI).
a) Trade Receivables
Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses wherever applicable. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
b) Debt instruments
i) Measured at amortized cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met: (a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and (b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss.
ii) Measured at FVTOCI (Fair Value through OCI)
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:(a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and(b) The assetâs contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the OCI. However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
iii) Measured at FVTPL (Fair value through profit or loss)
Debt instruments does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. The Company elects to classify the debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.
c) Equity Instruments:
All investments in equity instruments measured at fair value.
Equity instrument valued at FVTOCI, and all fair value changes on the instruments, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment as the company transfers cumulative gain or loss within the equity.
Equity instruments if classified as FVTPL category are measured at fair value i.e. at NAV with all changes recognized in the profit and loss.
F.1.3 Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e. removed from the Companyâs balance sheet) when:
- The contractual rights to receive cash flows from the asset have expired, or
- The Company has transferred its contractual rights to receive cash flows from the asset.
F.1.4 Impairment of Financial Asset
Expected credit losses are recognized for all financial assets subsequent to initial recognition in Statement of Profit & Loss other than financials assets in FVTPL category.
For recognition of impairment loss on financial assets other than Trade receivables, the company determines whether there has been a sigificant increase in the credit risk since initial recogniton. If credit risk has not increased significantly, 12-month ECL is used to provide impairment loss. However, If credit risk is increased significantly, lifetime ECL is used.If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12- Month ECL.
For trade receivables Company applies âsimplified approachâ which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
F.2 Financial liabilities
F.2.1 Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
F.2.2 Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any material transaction that are any integral part of the EIR. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
F.2.3 Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
F.3 Derivative financial instruments
The Company uses forwards to mitigate the risk of changes in exchange rates. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are also subsequently measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to Statement of Profit and Loss.
G Fair value measurement
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
H Impairment of Non-Financial Assets
The Company, in accordance with the Indian Accounting Standard (Ind AS) 36 âImpairment of Assetsâ , has adopted the practice of assessing at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, then the company provides for the loss for impairment of Assets after estimating the recoverable amount of the assets.
I Provisions & Contingent Liabilities
(i) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each reporting period and are adjusted to reflect the current best estimate.
(ii) Contingencies
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 or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Financial Statements. Contingent assets are not recognized in financial statements but are disclosed, if any
J Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable and it is probable that future economic benefits will flow to the entity. Amount of sales are net of goods and service tax, sale returns, trade discounts and rebates but inclusive of excise duty. Revenue from sale of products is recognized when the significant risks and rewards of ownership of the products have been transferred to the buyer, and the amount of revenue can be measured reliably.
Company continues to account for export benefits on accrual basis based upon the concept of accrual in the year of utilisation of advance licences.
Dividend income is recognized when the right to receive the income is established.
Interest income is recognised, when no significant uncertainty as to measurability or collectblitiy exists, on a time proportion basis taking into account the amount outstanding and the applicable interest rate, using the effective interest rate method (EIR).
K Foreign Currency Conversions/Transactions
Foreign Currency Transactions are recorded at the exchange rates prevailing on the date of the transactions. Gains and losses arising out of subsequent fluctuations are accounted for on actual payments or realisations as the case may be. Monetary assets and liabilities denominated in foreign currency as on Balance Sheet date are translated into functional currency at the exchange rates prevailing on that date and Exchange differences arising out of such conversion are recognised in the Statement of Profit and Loss.
L Income Taxes
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates to any business combination or to an item which is recognised directly in equity or in other comprehensive income.
a) Current Tax
Current tax expense is made on the basis of estimated taxable income for the current accounting period in accordance with the provisions of Income Tax Act, 1961 and judicial interpretations thereof as at the Balance Sheet date and takes into consideration various deductions and exemptions to which the Company is entitled to as well as the reliance placed by the Company on the legal advices received by it.
b) Deferred Tax
Deferred tax charge or credit reflects the tax effects of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date and are written-down or written-up to reflect the amount that is reasonably certain (as the case may be) to be realized.
Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation law. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.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 that case, the tax is recognised in other comprehensive income or directly in equity, respectively.
c) Minimum Alternative Tax (MAT)
Minimum Alternative Tax (MAT) is applicable to the Company. Credit of MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognised as an asset, the said asset is created by way of a credit to the profit and loss account and shown as MAT credit entitlement.
M Employee Benefits
(i) Defined Contribution Plan
Employee benefits in the form of Provident Fund (with Government Authorities) are considered as defined contribution plan and the contributions are charged to the statement of Profit & Loss of the year when the contributions to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of Gratuity and Long term compensated leaves are considered as defined benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. Other short term absences are provided based on past experience of leave availed. Actuarial Gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income (OCI) in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods. All other expenses related to defined benefit plans are recognized in Statement of Profit and Loss as employee benefit expenses.
N Borrowing Cost
General and Specific Borrowing Cost that are directly attributable to the acquisition or construction or production of qualifying assets are capitalized as part of the cost of such assets upto the date when such assets are ready for intended use. Qualified assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other borrowing costs are charged as expenses in the year in which they are incurred. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalisation.
O Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, net profit after tax during the year and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.
P Leases
Accounting for finance leases
Leases of Property, Plant and Equipment, if any, where the Company, as lessee has substantially all risks and rewards of ownership are classified as finance lease. On initial recognition, assets held under finance leases are recorded as Property, Plant and Equipment and the related liability is recognized under borrowings. At inception of the lease, finance leases are recorded at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability.
Accounting for operating leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating lease. Payments made under operating leases are recognized as an expense over the lease term.
Q Research & Development
Research and development costs are recognized as expense in the period in which it is incurred.The company does not incur any development expenditure which are eligible for capitalisation under Para 57 of Ind AS 38.
R Statement of Cash Flows
Statement of cash flows is prepared in accordance with the indirect method prescribed in Ind AS-7 âStatement of cash flows.
Mar 31, 2016
Corporate Information
Poddar Pigments Limited (the Company) is a public limited company domiciled in India, incorporated under the provisions of Companies Act, 2013. Its shares are listed on Bombay Stock Exchange. The Company is a manufacturer of Color & Additive Master batches for dope dyeing for man-made, fibers, various plastic applications.
A. Basis of preparation
The financial statements are prepared on Historical Cost basis and on the principles of going concern. The accounting policies not specifically referred to otherwise, are consistent and in consonance with generally accepted accounting principles. All income and expenditure are being accounted for on accrual basis. The financial statements are presented in Indian rupees in lacs.
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 Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/noncurrent classification of assets and liabilities.
B. Use of Estimates
In preparing Company''s financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the period in which the same is determined.
C. Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation and Cenvat benefit availed. All expenses relating to acquisition or installation of fixed assets and pre-operative expenses till the date of commencement of commercial production are capitalized.
Foreign fluctuation exchange loss/(gain) on long term borrowings in foreign currency utilized for acquiring fixed assets is capitalized pursuant to para 46 & 46A of Accounting Standard 11 (AS-11) - âThe Effects of Changes in Foreign Exchange Ratesâ notified by the Ministry of Corporate Affairs on 29th December, 2011.
D. Depreciation
Depreciation on fixed assets is provided on straight-line method (on shift basis) in accordance with the rates specified in Schedule II to the Companies Act, 2013.
Depreciation on Capitalized Exchange Fluctuation is provided over the remaining life of the assets.
No amortization of lease hold land is done, in view of long tenure of lease & which is generally renewed after the lease period.
E. Valuation of Inventories Inventories are valued as under :-
Raw Materials - At Cost - net of cenvat credit (on weighted average basis).
Stores & Spares - At Cost - net of cenvat credit (on weighted average basis)
Stock in Process - At Cost (cost includes prime cost, appropriate portion of overheads etc.)
Finished Goods - At lower of weighted average cost (cost includes prime cost, appropriate portion of overheads etc.) or net realizable value. Excise duty payable on goods lying at plant at the year end is provided and considered for valuation of stocks. Waste - At estimated realizable value
F. Investments
Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as Non Current investments. Current investments are carried at cost or fair value, whichever is lower. Non Current investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
G. Provision for current tax & deferred tax Current Tax
Provision for current tax expense is made on the basis of estimated taxable income for the current accounting period in accordance with the provisions of Income Tax Act, 1961 and judicial interpretations thereof as at the Balance Sheet date and takes into consideration various deductions and exemptions to which the Company is entitled to as well as the reliance placed by the Company on the legal advices received by it.
Deferred Tax
Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the current year and reversal of timing differences for earlier years. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date and are written-down or written-up to reflect the amount that is reasonably/virtually, certain (as the case may be) to be realized. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.
H. Foreign Currency Conversions/Transactions Foreign Currency Transactions are recorded at the exchange rates prevailing on the date of the transactions. Gains and losses arising out of subsequent fluctuations are accounted for on actual payments of realizations as the case may be. Current assets and liabilities denominated in foreign currency as on Balance Sheet date are converted at the exchange rates prevailing on that date and Exchange differences arising out of such conversion are recognized in the Statement of Profit and Loss. Exchange differences on forward contracts are recognized in the Statement of Profit and Loss over the length of the contract. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense as the case may be in the statement of Profit and Loss.
I. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
J. Employee Benefits
Contribution to provident fund schemes and Employee State Insurance Scheme made to appropriate authorities which are defined contribution schemes, are charged to statement of profit & loss account on accrual basis. Gratuity and leave encashment which are defined benefit schemes, are funded with as per specified Fund Scheme administered by LIC or provided for an accrual basis upon the actuarial valuation determined by LIC.
K. Revenue Recognition
Revenue from sale of products is recognized when the significant risks and rewards of ownership of the products have been transferred to the buyer, recovery of the consideration is reasonably assured and the amount of revenue can be measured reliably. Sales are net of sales tax and sale returns but inclusive of excise duty.
Company continues to account for export benefits on accrual basis based upon the concept of accrual in the year of utilization of advance licenses.
Dividend income is recognized when the right to receive the income is established. Income from interest on deposits and loans is recognized on time proportionate method.
L. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets upto the date when such assets are ready for intended use. Other borrowing costs are charged as expenses in the year in which they are incurred. Borrowing cost incidental to arranging the loans is charged as and when incurred.
M. Segment Reporting
The accounting policies adopted for segment reporting are in line with accounting policies of the Company. The Revenues & results have been identified to segment on the basis of their relationship to operating activities of the segments and internal management information systems and the same is reviewed from time to time to realign the same to conform to the Business. Units of the Company. The Revenues & results, which are common to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been treated as âCommon Revenues/Resultsâ, as the case may be.
N. Earnings Per Share
Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, net profit after tax during the year and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.
O. Impairment of Assets
The Company, in accordance with the Accounting Standard (AS) 28 âImpairment of Assetsâ issued by The Institute of Chartered Accountants of India, has adopted the practice of assessing at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, then the company provides for the loss impairment of Assets after estimating the recoverable amount of the assets.
P. Research and Development
Research and Development expenditure is charged to revenue in the year in which it is incurred. Capital Expenditure on Research and Development is shown as an addition to Fixed Assets.
Q. Leases
Leases, where the less or effectively retains substantially all the risks and benefits of ownership of the leased items, are classified as operating leases. Lease payment in respect of such leases are recognized as an expenses. In the Profit & Loss on a straight line basis over the lease term of extended term.
Mar 31, 2015
Corporate Information
Poddar Pigments Limited (the Company) is a public limited company
domiciled in India, incorporated under the provisions of Companies Act,
2013. Its shares are listed on Bombay Stock Exchange. The Company is a
manufacturer of Color & Additive Master batches for dope dyeing of man-
made fibers and various plastic applications.
A. Basis of preparation and presentation of financial statements
The financial statements are prepared on Historical Cost basis and on
the principles of going concern. The accounting policies not
specifically referred to otherwise, are consistent and in consonance
with generally accepted accounting principles. All income and
expenditure are being accounted for on accrual basis. The financial
statements are presented in Indian rupees in lacs. 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 Companies Act, 2013. Based on the nature of
products and the time between the acquisition of assets for processing
and their realization in cash and cash equivalents, the Company has
ascertained its operating cycle as 12 months for the purpose of current
/noncurrent classification of assets and liabilities.
B. Use of Estimates
In preparing Company's financial statements in conformity with
accounting principles generally accepted in India, management is
required to make estimates and assumptions that affect the reported
amount of assets and liabilities and the disclosure of contingent
liabilities at the date of the financial statements and reported amount
of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Any revision to accounting estimates
is recognized in the period in which the same is determined.
C. Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition or construction less
accumulated depreciation and Cenvat benefit availed. All expenses
relating to acquisition or installation of fixed assets and
pre-operative expenses till the date of commencement of commercial
production are capitalized.
Foreign fluctuation exchange loss/(gain) on long term borrowings in
foreign currency utilised for acquiring fixed aseets is capitalized
pursuant to para 46 & 46A of Accounting Standard 11 (AS-11) - ''The
Effects of Changes in Foreign Exchange Rates" notified by the
Ministry of Corporate Affairs on 29th December 2011.
D. Depreciation
Depreciation on fixed assets is provided on straight-line method (on
shift basis) in accordance with the rates specified in Schedule II to
the Companies Act, 2013.
Depreciation on Capitalized Exchange Fluctuation is provided over the
remaining life of the assets.
No amortization of lease hold land is done, in view of long tenure of
lease & which is generally renewed after the lease period.
E. Valuation of Inventories
Inventories are valued as under :-
Raw Materials
- At Cost - net of cenvat credit (on weighted average basis). Custom
duty on stocks lying in bonded warehouse at the year end is provided
and considered for valuation of stocks.
Stores & Spares - At Cost - net of cenvat credit (on weighted average
basis)
Stock in Process - At Cost (cost includes prime cost, appropriate
portion of overheads etc.)
Finished Goods - At lower of weighted average cost (cost includes prime
cost, appropriate portion of overheads etc.) or net realisable value.
Excise duty payable on goods lying at plant at the year end is provided
and considered for valuation of stocks. Waste - At estimated
realisable value
F. Investments
Investments that are readily realisable and are intended to be held for
not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as Non Current investments. Current investments are carried
at cost or fair value, whichever is lower. Non Current investments are
carried at cost. However, provision for diminution is made to recognise
a decline, other than temporary, in the value of the investments, such
reduction being determined and made for each investment individually.
G. Provision for Current Tax & Deferred Tax Current Tax
Provision for current tax expense is made on the basis of estimated
taxable income for the current accounting period in accordance with the
provisions of Income Tax Act, 1961 and judicial interpretations thereof
as at the Balance Sheet date and takes into consideration various
deductions and exemptions to which the Company is entitled to as well
as the reliance placed by the Company on the legal advices received by
it.
Deferred Tax
Deferred tax charge or credit reflects the tax effects of timing
differences between accounting income and taxable income for the
current year and reversal of timing
differences for earlier years. The deferred tax charge or credit and
the corresponding deferred tax liabilities or assets are recognized
using the tax rates that have been enacted or substantively enacted by
the Balance Sheet date. Deferred tax assets are reviewed at each
Balance Sheet date and are written-down or written-up to reflect the
amount that is reasonably / virtually certain (as the case may be) to
be realized. Deferred tax assets and deferred tax liabilities are
offset when there is a legally enforceable right to set off assets
against liabilities representing current tax and where the deferred tax
assets and the deferred tax liabilities relate to taxes on income
levied by the same governing taxation laws.
H. Foreign Currency Conversions/Transactions
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of the transactions. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payments or
realisations as the case may be. Current assets and liabilities
denominated in foreign currency as on Balance Sheet date are converted
at the exchange rates prevailing on that date and Exchange differences
arising out of such conversion are recognised in the Statement of
Profit and Loss. Exchange differences on forward contracts are
recognized in the Statement of Profit and Loss over the length of the
contract. Any profit or loss arising on cancellation or renewal of
forward contract is recognized as income or expense as the case may be
in the statement of Profit and Loss.
I. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
J. Employee Benefits
Contribution to provident fund schemes and Employee State Insurance
Scheme made to appropriate authorities which are defined contribution
schemes, are charged to statement of profit & loss account on accrual
basis. Gratuity and leave encashment which are defined benefit
schemes, are funded with as per specified Fund Scheme administered by
LIC or provided for on accrual basis based upon the actuarial valuation
determined by LIC.
K. Revenue Recognition
Revenue from sale of products is recognized when the significant risks
and rewards of ownership of the products have been transferred to the
buyer, recovery of the consideration is reasonably assured and the
amount of revenue can be measured reliably. Sales are net of sales tax
and sale returns but inclusive of excise duty.
Company continues to account for export benefits on accrual basis based
upon the concept of accrual in the year of utilisation of advance
licences.
Dividend income is recognized when the right to receive the income is
established. Income from interest on deposits and loans is recognized
on time .proportionate method.
L. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expenses in the year in which they are
incurred. Borrowings cost incidental to arranging the loans is charged
as and when incurred.
M. Segment Reporting
The accounting policies adopted for segment reporting are in line with
accounting policies of the Company. The Revenues & results have been
identified to segments on the basis of their relationship to operating
activities of the segments and internal management information systems
and the same is reviewed from time to time to realign the same to
conform to the Business Units of the Company. The Revenues & results,
which are common to the enterprise as a whole and are not allocable to
segments on a reasonable basis, have been treated as "Common
Revenues/Results", as the case may be.
N. Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, net profit after tax
during the year and the weighted average number of shares outstanding
during the year,are adjusted for the effect of all dilutive potential
equity shares.
O. Impairment of Assets
The Company, in accordance with the Accounting Standard (AS) 28
"Impairment of Assets" issued by The Institute of Chartered Accountants
of India, has adopted the practice of assessing at each Balance Sheet
date whether there is any indication that an asset may be impaired. If
any such indication exists, then the company provides for the loss for
impairment of Assets after estimating the recoverable amount of the
assets.
P. Research and Development
Research and Development expenditure is charged to revenue in the year
in which it is incurred. Capital Expenditure on Research and
Development is shown as an addition to Fixed Assets.
Q. Leases
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased items, are classified as
operating leases. Lease payment in respect of such leases are
recognized as an expenses in the Profit & Loss on a straight line basis
over the lease term or extended term.
Mar 31, 2014
Corporate Information
Poddar Pigments Limited (the Company) is a public limited company
domiciled in India, incorporated under the provisions of Companies Act,
1956. Its shares are listed on Bombay Stock Exchange. The Company is a
manufacturer of Color & Additive Master batches for dope dyeing of man-
made fibers and various plastic applications.
A. Basis of preparation and presentation of financial statements
The financial statements are prepared on Historical Cost basis and on
the principles of going concern. The accounting policies not
specifically referred to otherwise, are consistent and in consonance
with generally accepted accounting principles. All income and
expenditure are being accounted for on accrual basis. The financial
statements are presented in Indian rupees in lacs.
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 VI to the Companies Act, 1956. Based
on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current /noncurrent classification of assets
and liabilities.
B. Use of Estimates
In preparing Company''s financial statements in conformity with
accounting principles generally accepted in India, management is
required to make estimates and assumptions that affect the reported
amount of assets and liabilities and the disclosure of contingent
liabilities at the date of the financial statements and reported amount
of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Any revision to accounting estimates
is recognized in the period in which the same is determined.
C. Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition or construction less
accumulated depreciation and Cenvat benefit availed on capital goods.
All expenses relating to acquisition or installation of fixed assets
and pre-operative expenses till the date of commencement of commercial
production are capitalized.
Foreign fluctuation exchange loss/(gain) on long term borrowings in
foreign currency utilised for acquiring fixed aseets is capitalized
pursuant to para 46 & 46A of Accounting Standard 11 (AS-11) Â "The
Effects of Changes in Foreign Exchange Rates" notified by the Ministry
Of Corporate Affairs on 29th December 2011.
D. Depreciation
Depreciation on fixed assets is provided on straight-line method (on
shift basis) in accordance with the rates specified in Schedule XIV to
the Companies Act,1956. Depreciation on Capitalized Exchange
Fluctuation is depreciated over the remaining life of the assets.
No amortization of lease hold land is done, in view of long tenure of
lease & which is generally renewed after the lease period.
E. Valuation of Inventories
Inventories are valued as under :-
Raw Materials
At Cost - net of cenvat credit (on weighted average basis). Custom duty
on stocks lying in bonded warehouse at the year end is provided and
considered for valuation of stocks.
Stores & Spares
At Cost - net of cenvat credit (on weighted average basis)
Stock in Process
At Cost (cost includes prime cost, appropriate portion of overheads
etc.)
Finished Goods
- At lower of weighted average cost (cost includes prime cost,
appropriate portion of overheads etc.)
or net realisable value. Excise duty on goods lying at plant at the
year end is provided and considered for valuation of stocks.
Waste
- At estimated realisable value
F. Investments
Investments that are readily realisable and are intended to be held for
not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as Non Current investments. Current investments are carried
at cost or fair value, whichever is lower. Non Current investments are
carried at cost. However, provision for diminution is made to recognise
a decline, other than temporary, in the value of the investments, such
reduction being determined and made for each investment individually.
G. Provision for Current Tax & Deferred Tax
Current Tax
Provision for current tax expense is made on the basis of estimated
taxable income for the current accounting period in accordance with the
provisions of Income Tax Act, 1961 and judicial interpretations thereof
as at the Balance Sheet date and takes into consideration various
deductions and exemptions to which the Company is entitled to as well
as the reliance placed by the Company on the legal advices received by
it.
Deferred Tax
Deferred tax charge or credit reflects the tax effects of timing
differences between accounting income and taxable income for the
current year and reversal of timing differences for earlier years. The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the Balance Sheet date. Deferred
tax assets are reviewed at each Balance Sheet date and are written-down
or written-up to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realized. Deferred tax assets and
deferred tax liabilities are offset when there is a legally enforceable
right to set off assets against liabilities representing current tax
and where the deferred tax assets and the deferred tax liabilities
relate to taxes on income levied by the same governing taxation laws.
H. Foreign Currency Conversions / Transactions
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of the transactions. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payments or
realisations as the case may be. Current assets and liabilities
denominated in foreign currency as on Balance Sheet date are converted
at the exchange rates prevailing on that date and Exchange differences
arising out of such conversion are recognised in the Statement of
Profit and Loss. Exchange differences on forward contracts are
recognized in the Statement of Profit and Loss over the length of the
contract. Any profit or loss arising on cancellation or renewal of
forward contract is recognized as income or expense as the case may be
in the statement of Profit and Loss.
I. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
J. Employee Benefits
Contribution to provident fund schemes and Employee State Insurance
Scheme made to appropriate authorities which are defined contribution
schemes, are charged to statement of profit & loss account on accrual
basis. Gratuity and leave encashment which are defined benefit schemes,
are funded with as per specified Fund Scheme administered by LIC or
provided for on accrual basis based upon the actuarial valuation
determined by LIC.
K. Revenue Recognition
Revenue from sale of products is recognized when the significant risks
and rewards of ownership of the products have been transferred to the
buyer, recovery of the consideration is reasonably assured and the
amount of revenue can be measured reliably. Sales are net of sales tax
and sale returns but inclusive of excise duty.
Company continues to account for export benefits on accrual basis based
upon the concept of accrual in the year of utilisation of advance
licences.
Dividend income is recognized when the right to receive the income is
established. Income from interest on deposits and loans is recognized
on time proportionate method.
L. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expenses in the year in which they are
incurred. Borrowings cost incidental to arranging the loans is charged
as and when incurred.
M. Segment Reporting
The accounting policies adopted for segment reporting are in line with
accounting policies of the Company. The Revenues & results have been
identified to segments on the basis of their relationship to operating
activities of the segments and internal management information systems
and the same is reviewed from time to time to realign the same to
conform to the Business Units of the Company. The Revenues & results,
which are common to the enterprise as a whole and are not allocable to
segments on a reasonable basis, have been treated as "Common
Revenues/Results", as the case may be.
Notes to the Financial Statements for the year ended 31st March, 2014
(contd.)
N. Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, net profit after tax
during the year and the weighted average number of shares outstanding
during the year are adjusted for the effect of all dilutive potential
equity shares.
O. Impairment of Assets
The Company, in accordance with the Accounting Standard (AS) 28
"Impairment of Assets" issued by The Institute of Chartered Accountants
of India, has adopted the practice of assessing at each Balance Sheet
date whether there is any indication that an asset may be impaired. If
any such indication exists, then the company provides for the loss for
impairment of Assets after estimating the recoverable amount of the
assets.
P. Research and Development
Research and Development expenditure is charged to revenue in the year
in which it is incurred. Capital Expenditure on Research and
Development is shown as an addition to Fixed Assets.
Q. Leases
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased items, are classified as
operating leases. Lease payment in respect of such leases are
recognized as an expenses in the Profit & Loss on a straight line basis
over the lease term or extended term.
Mar 31, 2013
A. Basis of preparation and presentation of financial statements
The financial statements are prepared on historical Cost basis and on
the principles of going concern. The accounting policies not
specifically referred to otherwise, are consistent and in consonance
with generally accepted accounting principles. All income and
expenditure are being accounted for on accrual basis. The financial
statements are presented in Indian rupees in lacs.
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 VI to the Companies Act, 1956. Based
on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current/ noncurrent classification of assets
and liabilities.
B. Use of Estimates
In preparing Company''s financial statements in conformity with
accounting principles generally accepted in India, management is
required to make estimates and assumptions that affect the reported
amount of assets and liabilities and the disclosure of contingent
liabilities at the date of the financial statements and reported amount
of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Any revision to accounting estimates
is recognized in the period in which the same is determined.
C. Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition or construction less
accumulated depreciation and Cenvat benefit availed on capital goods.
All expenses relating to acquisition or installation of fixed assets
and pre-operative expenses till the date of commencement of commercial
production are capitalized.
Foreign fluctuation exchange loss/(gain) on long term borrowings in
foreign currency utilised for acquiring fixed assets is capitalized
pursuant to para 46 & 46A of Accounting Standard 11 (AS-11) - "The
Effects of Changes in Foreign Exchange Rates" notified by the Ministry
of Corporate Affairs on 29th December, 2011.
D. Depreciation
Depreciation on fixed assets is provided on straight-line method (on
shift basis) in accordance with the rates specified in Schedule XIV to
the Companies Act,1956. Depreciation on capitalized exchange
fluctuation is depreciated over the remaining life of the assets.
No amortization of lease hold land is done, in view of long tenure of
lease & which is generally renewed after the lease period.
E. Valuation of Inventories
Inventories are valued as under :-
Raw Materials - At Cost - net of cenvat credit (on weighted average
basis). Custom duty on stocks lying in bonded warehouse at the year end
is provided and considered for valuation of stocks.
Stores & Spares - At Cost- net of cenvat credit (on weighted average
basis)
Stock in Process -
AtCost(costincludesprimecost,appropriateportionofoverheadsetc.)
Finished Goods - At lower of weighted average cost (cost includes prime
cost, appropriate portion of overheads etc.) or net realisable value.
Excise duty on goods lying at plant at the year end is provided and
considered for valuation of stocks.
Waste - At estimated realisable value
F. Investments
Investments that are readily realisable and are intended to be held for
not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as Non Current investments. Current investments are carried
at cost or fair value, whichever is lower. Non Current investments are
carried at cost. However, provision for diminution is made to recognise
a decline, other than temporary, in the value of the investments, such
reduction being determined and made for each investment individually.
G. Provision for Current Tax & Deferred Tax
Current Tax
Provision for current tax expense is made on the basis of estimated
taxable income for the current accounting period in accordance with the
provisions of Income Tax Act, 1961 and judicial interpretations thereof
as at the Balance Sheet date and takes into consideration various
deductions and exemptions to which the Company is entitled to as well
as the reliance placed by the Company on the legal advices received by
it.
Deferred Tax
Deferred tax charge or credit reflects the tax effects of timing
differences between accounting income and taxable income for the
current year and reversal of timing differences for earlier years. The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the Balance Sheet date. Deferred
tax assets are reviewed at each Balance Sheet date and are written-down
or written-up to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realized. Deferred tax assets and
deferred tax liabilities are offset when there is a legally enforceable
right to set off assets against liabilities representing current tax
and where the deferred tax assets and the deferred tax liabilities
relate to taxes on income levied by the same governing taxation laws.
H. Foreign Currency Conversions /Transactions
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of the transactions. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payments or
realisations as the case may be. Current assets and liabilities
denominated in foreign currency as on Balance Sheet date are converted
at the exchange rates prevailing on that date and Exchange differences
arising out of such conversion are recognised in the Statement of
Profit and Loss. Exchange differences on forward contracts are
recognized in the Statement of Profit and Loss over the length of the
contract. Any profit or loss arising on cancellation or renewal of
forward contract is recognized as income or expense as the case may be
in the statement of Profit and Loss.
I. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
J. Employee Benefits
Contribution to provident fund scheme and Employee State Insurance
Scheme made to appropriate authorities which are defined contribution
schemes, are charged to profit & loss account on accrual basis.
Gratuity and leave encashment which are defined benefit schemes, are
funded with as per specified Fund Scheme administered by LIC or
provided for on accrual basis based upon the actuarial valuation
determined by LIC.
K. Revenue Recognition
Revenue from sale of products is recognized when the significant risks
and rewards of ownership of the products have been transferred to the
buyer, recovery of the consideration is reasonably assured and the
amount of revenue can be measured reliably. Sales are net of sales tax
and sale returns but inclusive of excise duty.
Company continues to account for export benefits on accrual basis on
utilisation of advance licences as a prudent accounting policy.
Dividend income is recognized when the right to receive the income is
established. Income from interest on deposits and loans is recognized
on time proportionate method.
L. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expenses in the year in which they are
incurred. Borrowings cost incidental to arranging the loans is charged
as and when incurred.
M. Segment Reporting
The accounting policies adopted for segment reporting are in line with
accounting policies of the Company. The Revenues & results have been
identified to segments on the basis of their relationship to operating
activities of the segments and internal management information systems
and the same is reviewed from time to time to realign the same to
conform to the Business Units of the Company. The Revenues & results,
which are common to the enterprise as a whole and are not allocable to
segments on a reasonable basis, have been treated as "Common Revenues /
Results", as the case may be.
N. Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, net profit after tax
during the year and the weighted average number of shares outstanding
during the year are adjusted for the effect of all dilutive potential
equity shares.
O. Impairment of Assets
The Company, in accordance with the Accounting Standard (AS) 28
"Impairment of Assets" issued by The Institute of Chartered Accountants
of India, has adopted the practice of assessing at each Balance Sheet
date whether there is any indication that an asset may be impaired. If
any such indication exists, then the company provides for the loss for
impairment of Assets after estimating the recoverable amount of the
assets.
P. Research and Development
Research and Development expenditure is charged to revenue in the year
in which it is incurred. Capital Expenditure on Research and
Development is shown as an addition to Fixed Assets.
Q. Leases
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased items, are classified as
operating leases. Lease payment in respect of such leases are
recognized as an expenses in the Statement of Profit & Loss on a
straight line basis over the lease term or extended term.
Mar 31, 2012
A. Basis of preparation and presentation of financial statements
The financial statements are prepared on Historical Cost basis and on
the principles of going concern. The accounting policies not
specifically referred to otherwise, are consistent and in consonance
with generally accepted accounting principles. All income and
expenditure are being accounted for on accrual basis. The financial
statements are presented in Indian rupees.
During the year ended March 2012, the revised Schedule VI notified
under the Companies Act, 1956 has become applicable to the Company for
presentation of its financial statements. The adoption of revised
Schedule VI does not impact recognition and measurement principles
followed for preparation of financial statement. However, the revised
Schedule VI has a significant impact on the presentation and
disclosures made in the financial statements. The Company has also
reclassified the previous year figures in accordance with the
requirements applicable in the current year.
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 to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current noncurrent classification of assets
and liabilities.
B. Use of Estimates
In preparing Company's financial statements in conformity with
accounting principles generally accepted in India, management is
required to make estimates and assumptions that affect the reported
amount of assets and liabilities and the disclosure of contingent
liabilities at the date of the financial statements and reported amount
of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Any revision to accounting estimates
is recognized in the period in which the same is determined.
C. Tangible Fixed Assets
Fixed Assets are stated at cost of acquisition or construction less
accumulated depreciation and Cenvat benefit availed on capital goods.
All expenses relating to acquisition or installation of fixed assets
and pre-operative expenses till the date of commencement of commercial
production are capitalized.
Foreign fluctuation exchange loss/(gain) on long term borrowing in
foreign currency is capitalized pursuant to para 46 & 46A of Accounting
Standard 11 (AS-11) - "The Effects of Changes in Foreign Exchange
Rates" notified by the Ministry of Corporate Affairs on 29th December
2011.
D. Depreciation
Depreciation on fixed assets is provided on straight-line method (on
shift basis) in accordance with the rates specified in Schedule XIV to
the Companies Act, 1956. Depreciation on Capitalized Exchange
Fluctuation is charged over the remaining useful life of the assets.
No amortization of lease hold land is done in view of long tenure of
lease & which is generally renewed after the lease period.
E. Valuation of Inventories
Inventories are valued as under :-
Raw Materials - At Cost - net of cenvat credit (on weighted
average basis). Custom duty on stocks lying
in bonded warehouse at the year end is
provided and considered for valuation of
stocks.
Stores & Spares - At Cost - net of cenvat credit (on weighted
average basis)
Stock in Process - At Cost (cost includes prime cost, appropriate
portion of overheads etc.)
Finished Goods - At lower of cost (cost includes prime cost,
appropriate portion of overheads etc.) or net
realisable value. Excise duty on goods lying
at plant at the year end is provided and
considered for valuation of stocks.
Waste - At estimated realisable value
Notes to the Financial Statement for the year ended 31st March, 2012
(Contd.)
F. Investments
Investments that are readily realisable and are intended to be held for
not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as Non Current investments. Current investments are carried
at cost or fair value, whichever is lower. Non Current investments are
carried at cost. However, provision for diminution is made to recognise
a decline, other than temporary, in the value of the investments, such
reduction being determined and made for each investment individually.
G. Income 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.
Current Tax
Current tax expense is based on the provisions of Income Tax Act, 1961
and judicial interpretations thereof as at the Balance Sheet date and
takes into consideration various deductions and exemptions to which the
Company is entitled to as well as the reliance placed by the Company on
the legal advices received by it.
Deferred Tax
Deferred tax charge or credit reflects the tax effects of timing
differences between accounting income and taxable income for the
current year and reversal of timing differences for earlier years. The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the Balance Sheet date. Deferred
tax assets are reviewed at each Balance Sheet date and are written-down
or written-up to reflect the amount that is reasonably/virtually
certain (as the case may be) to be realized. Deferred tax assets and
deferred tax liabilities are offset when there is a legally enforceable
right to set off assets against liabilities representing current tax
and where the deferred tax assets and the deferred tax liabilities
relate to taxes on income levied by the same governing taxation laws.
H. Foreign Currency Conversions/Transactions
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of the transactions. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payments or
realisations as the case may be. Current assets and liabilities
denominated in foreign currency as on Balance Sheet date are converted
at the exchange rates prevailing on that date and Exchange differences
arising out of such conversion are recognised in the Statement of
Profit and Loss. Exchange differences on forward contracts are
recognized in the Statement of Profit and Loss over the length of the
contract. Any profit or loss arising on cancellation or renewal of
forward contract is recognized as income or expense as the case may be
in the Profit and Loss Account.
I. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
J. Employee Benefits
Contribution to provident fund schemes and Employee State Insurance
Scheme made to appropriate authorities which are defined contribution
schemes, are charged to profit & loss account on accrual basis.
Gratuity and leave encashment which are defined benefit schemes, are
funded with as per specified Fund Scheme administered by LIC or
provided for on accrual basis based upon the actuarial valuation
determined by LIC.
K. Revenue Recognition
Revenue from sale of products is recognized when the significant risks
and rewards of ownership of the products have been transferred to the
buyer, recovery of the consideration is reasonably assured and the
amount of revenue can be measured reliably. Sales are net of sales tax
and sale returns but inclusive of excise duty.
Company continues to account for export benefits on accrual basis on
utilisation of advance licences.
Dividend income is recognized when the right to receive the income is
established. Income from interest on deposits and loans is recognized
on time proportionate method.
L. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expenses in the year in which they are
incurred
M. Segment Reporting
The accounting policies adopted for segment reporting are in line with
accounting policies of the Company. The Revenues & results have been
identified to segments on the basis of their relationship to operating
activities of the segments and internal management information systems
and the same is reviewed from time to time to realign the same to
conform to the Business Units of the Company. The Revenues & results,
which are common to the enterprise as a whole and are not allocable to
segments on a reasonable basis, have been treated as "Common
Revenues/Results", as the case may be.
N. Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, net profit after tax
during the year and the weighted average number of shares outstanding
during the year are adjusted for the effect of all dilutive potential
equity shares.
O. Impairment of Assets
The Company, in accordance with the Accounting Standard (AS) 28
"Impairment of Assets" issued by The Institute of Chartered Accountants
of India, has adopted the practice of assessing at each Balance Sheet
date whether there is any indication that an asset may be impaired. If
any such indication exists, then the company provides for the loss for
impairment of Assets after estimating the recoverable amount of the
assets.
P. Research and Development
Research and Development expenditure is booked to the respective heads
of the accounts and charged to revenue in the year in which it is
incurred. Capital Expenditure on Research and Development is shown as
an addition to Fixed Assets.
Q. Leases
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased items, are classified as
operating leases. Lease payment in respect of such leases are
recognized as an expenses in the Profit & Loss account on a straight
line basis over the lease term or extended term.
Mar 31, 2011
1. Basis of Accounting
(a) The financial statements are prepared on Historical Cost basis and
on the principles of going concern. The accounting policies not
specifically referred to otherwise, are consistent and in consonance
with generally accepted accounting principles.
(b) All income and expenditure are being accounted for on accrual
basis.
2. Use of Estimates
In preparing Company's financial statements in conformity with
accounting principles generally accepted in India, management is
required to make estimates and assumptions that affect the reported
amount of assets and liabilities and the disclosure of contingent
liabilities at the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognized in the period the same is determined.
3. Revenue Recognition
(a) Revenue for sale of goods is recognized at the point of despatch of
material to customers from plant. Sale includes excise duty, and is net
of all rebates and discounts.
(b) Company continues to account for export benefits on accrual basis
on utilisation of advance licences.
4. Fixed Assets
(a) Fixed Assets are stated at cost of acquisition or construction less
accumulated depreciation and Cenvat benefit availed on capital goods.
All expenses relating to acquisition or installation of fixed assets
and pre-operative expenses till the date of commencement of commercial
production are capitalised.
(b) No amortisation of lease hold land is done, in view of long tenure
of lease & which is generally renewed after the lease period.
5. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expenses in the year in which they are
incurred.
6. Depreciation
Depreciation on fixed assets is provided on straight-line method (on
shift basis) in accordance with the rates specified in Schedule XIV to
the Companies Act, 1956. Depreciation on Capitalized Exchange
Fluctuation is charged over the remaining useful life of the assets.
7. Investments
Long Term Investments are stated at cost and the same are recorded on
trade date.
8. Inventory
Inventories are valued as under:-
Finished Goods - at lower of cost (cost includes prime cost,
appropriate portion of overheads etc.) or net
realisable value. Excise duty on goods lying at
plant at the year end is provided and considered
for valuation of stocks.
Stock in Process - at Cost (cost includes prime cost, appropriate
portion of overheads etc.)
Raw Materials - at Cost - net of cenvat credit (on weighted average
basis). Custom duty on stocks lying in bonded
warehouse at the year end is provided
and considered for valuation of stocks.
Stores & Spares - at Cost- net of cenvat credit (on weighted average
basis).
Waste - at estimated realisable value.
9. Research and Development
Research and Development expenditure is booked to the respective heads
of the accounts and charged to revenue in the year in which it is
incurred. Capital Expenditure on Research and Development is shown as
an addition to Fixed Assets.
10. Foreign Currency Transactions
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of the transactions. Gains and losses arising
out of subsequent fluctuations are accounted for on actual payments or
realisations as the case may be. Current assets and liabilities
denominated in foreign currency as on Balance Sheet date are converted
at the exchange rates prevailing on that date and Exchange differences
arising out of such conversion are recognised in the Profit and Loss
Account. Exchange differences on forward contracts are recognized in
the Profit and Loss Account over the length of the contract. Any profit
or loss arising on cancellation or renewal of forward contract is
recognized as income or expense as the case may be in the Profit and
Loss Account.
11. Deferred Tax
Deferred Tax resulting from timing differences between book profit and
taxable profit are accounted by using the current rate of tax to the
extent the timing differences are expected to crystalise.
12. Retirement Benefits
Contribution to provident fund schemes and Employee State Insurance
Scheme made to appropriate authorities which are defined contribution
schemes, are charged to profit & loss account on accrual basis.
Gratuity and leave encashment which are defined benefit schemes, are
funded with as per specified Fund Scheme administered by LIC or
provided for on accrual basis based upon the actuarial valuation
determined by LIC.
13. Impairment of Assets
The Company, in accordance with the Accounting Standard (AS) 28
"Impairment of Assets" issued by The Institute of Chartered Accountants
of India, has adopted the practice of assessing at each Balance Sheet
date whether there is any indication that an asset may be impaired. If
any such indication exists, then the company provides for the loss for
impairment of Assets after estimating the recoverable amount of the
assets.
14. Leases
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased items, are classified as
operating leases. Lease payment in respect of such leases are
recognized as an expenses in the Profit & Loss account on a straight
line basis over the lease term or extended term.
15. Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period.
16. Provisions, Contingent Liabilities and Contingent Assets
Provision is made as per Accounting Standard (AS) 29 "Provisions,
Contingent Liabilities and Contingent Assets" issued by The Institute
of Chartered Accountants of India, in respect of any present obligation
as a result of a past event that could lead to probable outflow of
resources which would be required to settle the obligation.
Mar 31, 2010
1. Basis of Accounting
(a) The financial statements are prepared on Historical Cost basis and
on the principles of going concern. The accounting policies not
specifically referred to otherwise, are consistent and in consonance
with generally accepted accounting principles.
(b) All income and expenditure are being accounted for on accrual
basis.
2. Use of Estimates
In preparing Companys financial statements in conformity With
accounting principles generally accepted in India, management is
required to make estimates and assumptions that affect the reported
amount of assets and liabilities and the disclosure of contingent
liabilities at the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates Any revision to accounting
estimates is recognized in the period the same is determined.
3. Revenue Recognition
(a) Revenue for sale of goods is recognized at the point of despatch of
material to customers from plant Sale includes excise duty, and is net
of all rebates and discounts.
(b) Company continues to account for export benefits on accrual basis
on utilisation of advance licences.
4. Fixed Assets
(a) Fixed Assets are stated at cost of acquisition or construction less
accumulated depreciation and Cenvat benefit availed on capital goods.
All expenses relating to acquisition or installation of fixed assets
and preoperative expenses till the date of commencement of commercial
production are capitalised.
(b) No amortisation of lease hold land is done, in view of long tenure
of lease & which is generally renewed after the lease period.
5. Borrowing Cost
Borrowing Cost attributable to the acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets
upto the date when such assets are ready for intended use. Other
borrowing costs are charged as expenses in the year in which they are
incurred.
6. Depreciation
Depreciation on fixed assets is provided on straight-line method (on
shift basis) in accordance with the rates specified in Schedule XIV to
the Companies Act,1956. Depreciation on Capitalised Exchange
Fluctuation is charged over the remaining useful life of the assets.
7. Investments
Long Term Investments are stated at cost and the same are recorded on
trade date.
8. Inventory
Inventories are valued as under:-
Finished Goods - at lower of cost (cost includes prime
cost, appropriate portion of overheads
etc.) or net realisable value. Excise
duty on goods lying at plant at the year
end is provided and considered for
valuation of stocks.
Stock in Process - at Cost (cost includes prime cost,
appropriate portion of overheads etc.)
Raw Materials - at Cost -net of cenvat credit (on
weighted average basis). Custom duty on
stocks lying in bonded warehouse at the
year end is provided and considered for
valuation of stocks.
Stores & Spares - at Cost-net of cenvat credit (on weighted
average basis).
Waste - at estimated realisable value.
9. Research and Development
Research and Development expenditure is booked to the respective heads
of the accounts and charged to revenue in the year in which it is
incurred. Capital Expenditure on Research and Development is shown as
an addition to Fixed Assets.
10. Foreign Currency Transactions
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of the transactions. Gains and losses ansing out
of subsequent fluctuations are accounted for on actual payments or
realisations as the case may be. Current assets and liabilities
denominated in foreign currency as on Balance Sheet date are converted
at the exchange rates prevailing on that date and Exchange differences
arising out of such conversion are recognised in the Profit and Loss
Account. Exchange differences on forward contracts are recognized in
the Profit and Loss Account over the length of the contract. Any profit
or loss arising on cancellation or renewal of forward contract is
recognized as income or expense as the case may be in the Profit and
Loss Account.
11. Deferred Tax
Deferred Tax resulting from timing differences between book profit and
taxable profit are accounted by using the current rate of tax to the
extent the timing differences are expected to crystallise.
12. Retirement Benefits
Contribution to provident fund schemes and Employee State Insurance
Scheme made to appropriate authorities which are defined contribution
schemes, are charged to profit & loss account on accrual basis.
Gratuity and leave encashment which are defined benefit schemes, are
funded with as per specified Fund Scheme administered by LIC or
provided for on accrual basis based upon the actuarial valuation
determined by LIC.
13. Impairment of Assets
The Company, in accordance with the Accounting Standard (AS) 28
"Impairment of Assets" issued by The Institute of Chartered Accountants
of India, has adopted the practice of assessing at each Balance Sheet
date whether there is any indication that an asset may be impaired. If
any such indication exists, then the company provides for the loss for
impairment of Assets after estimating the recoverable amount of the
assets.
14. Leases
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased items, are classified as
operating leases. Lease payment in respect of such leases are
recognized as an expenses in the Profits Loss account on a straight
line basis over the lease term or extended term.
15. Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period.
16. Provisions, Contingent Liabilities and Contingent Assets
Provision is made as per Accounting Standard (AS) 29 "Provisions,
Contingent Liabilities and Contingent Assets" issued by The Institute
of Chartered Accountants of India, in respect of any present obligation
as a result of a past event that could lead to probable outflow of
resources which would be required to settle the obligation.
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