Accounting Policies of Sadhana Nitro Chem Ltd. Company
Mar 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
2.1 Statement of Compiiance
The shipr alone f inane a I statements h avp t>PH=! n prepa ren in (Kjttg''iJfin re with. In 1 ''an ntmg Sta nd areM I n 1 AS \ a*
pgr the Cwnpanlesjlndlflr AccgynlUfjj Standard-r) Hi ilex, 2D IS htjttffdS under Section 13;H n1 C, nil i pan PS ABt,2013{ttig
"Anf''J and timer relevant provisions nT [he Apt these ^tgrxtctOTe finanrt nl slalernenla have been jvepared 1or the
Cornpeny a&S going concern Lin, ihs besip or jelevartl hid AS tbal are erlentivu at 1?le Company''s annual report date,
March 31. Uto.r lhcst: s modal⢠it- I i mutual statumeiUJS msjrtj unit inrtitd ''or (ppugnee by Lta: Company''s Lloa''ti or
U iftdCtiw S On May 34. 2023.
1.1 Basis of preparation ail d presentation
These financial statements have beep prepared on lhe historical cost oasis, except for cedsin Tirteficial iruftrurpents
''.vhiclr are measured at fa r values at the end of each reporting pi-dad. as explained in Bib accounting sohe''es bekw.
Historicti'' cost is generaâiy cased on the fair value oi line consideration given id exchange For goods and sendees Fain
value is the price Wi-ch thal would be received or paid to transfer p liability ip an orderly transaction between market
participants at the measurement (tele
3.3 Use of estimate
The preparehDn oi ih$se financial siatements in contarmity with the recognition nnd measurement principles or tnd
AS requirea Ifie nlanegemenI ot lr 10 Oompai iy 10 n iaV,e esli 111 ales and a&su 111 phone it ia! effect the renoded jjalances
of asset® sud liabilities, disdnyurus fniating to contingent kablreas as at the datoof the financial statements and the
1 averted , 1 moui ,ts of Incbn 10 am 1 u^pt 11 se fu 1 Lt-u ptr iods preset itn c
Estimates and underlying assumptions are reviewed on an ongoing basis Rev.sions to accounting ¦BHmates are
recognised n the penod in which flic esl mates are revised and future periods are affected The management
believes that lhe estimates used r preparation of the tinSnijUs! statements are prudent end reasonable Pdjune
resu Its coui ct d iffe r due to these e stimgres and differences between adtial results and estimates are recognized in the
penods id which the results are fihcrwnAnstgriaizie
Key source of e<*1 ima tigp flf Pncertalt|1y a i the n a te oi the hnar.ni a ¦U.atem e n h which, may oguse a rn a lenar adj 1: si merl
In- Itre carry ng amoUrls of assets6nd liabi nes v/irhin trie neil finaiiCte year is irvtfespect oi Fair valuationot I ihumj
Inatrurrtprits. usafuf lives of property, plant and spuipment, valuation of deterred tax Ashots &tteblhtie£ and provieioofi
and con tlngei: t iiahiJiliefi.
Useful lives dl property. plant and equipment
Tho Company .reviews ine useful iifo of proporly. plarit and tejuipirMtil si tho end of cacti reporting porioo Thua
reassessmeni may result in change in deprec''ationexpense in future penods
Valuatio n of rtef o rred 1 a * assets & Liabl I i ties
I lho Company reviews thecarTying^frumnl nc deferred tax assets & Lisbililied^ the end of each reporting period; Tha
policy for the same hes been sxptainBiJ under Noie ?. 10
Fmvisions and contingent liabjlitfes
Frovisimis- Hie raccgihzed *hen itie Comp^ry b^Sa pmsei''.t legal orcnnstnjgfive obhenhort hs a resud of pas! events,
it is probBble llui an [iLilllow of resources will bs rtfiiurred to settle I lie L''tliqdli;;n; and It''-e amourd ceil be re iably
eslimalod.
Provisions are measured at tho present value ot the axpandilures expected tb be required to seine the obl-gslior
using a pro tax rate that rellects correm marltet assessments of lhe time value of money (f the impact of discounting is
signdicanl) and tne risks specific to tire obligation. Tlio ,1''.crease in the provision due to unwinding of discount over
passage of dme recognized as fnance cost. Provisions are reviewed at the each reporting date and adjusted to
refl-ect the current best estimate If if *5 no fang-er pnobeble that an oiftflow of economic resources wilf Ce required ft?
settle theoWigfllton, !hB provision ia ravnread
A provision li:jr onpmjs mnlrnrts ;s lenogrnrrerl whan LhF expected twnfifils to ne rterivad by lbs company from a
contract are lowai than Hue unavoidable COS1 of mealing itaol''igaiiona unde1 tfie odnlraizt. TJle provision -a measured
aL Lire present yaiua oi me axpecieu net coal of continuing with the dpn''tr^bt Before a provision la establfehed. tire
company recogflfejes any impairment loss an (ho pesefasessas utod with that cur tract.
Adit-closure far a cooling
not wholly within tbe oonlrol of tbe company or a present obhqnt''or that arises from tho pasl events where il is ehner
not probable that an outflow of resources will be required So settle Lhe obligation or a reflcble estimate of Lhe amount
cannot be metre Contingent riobi iries ere rot recognised in the ffnadgtel stalemenrs A contingent orsset re neiiher
recog faced nor disclosed mbs finances l statements
Fair value measurement!; and valuation processes
3;mfl oflhe cnrr-pnny''s assets nriri ;iabntiee me mem-ured si lair value tor flnanc a I reporting ppfpOS^S Dte Company
had gained Independent fair valubbcm fur linanciat l^trumenls wherever flScessary to rintomiirie the appiopnate
Vrilual uii techniques ebd Inputs for fait value measurements. In some cases die fair value ol financial ihStrumeulS Is
tone intertally by titania;- lagumenlof !ha Ctoiiipany ustrtpmaiKuvobserveblo Inputs.
In asti mating the fair vjiuo of an asset or a liability, the company uses market observable data to the extent if is
available When.: Level 1 inputs are rot availaote, the company engages fhiind party qualified valuers to perform ti e
val uat on. Tho qual ifiod exlc mal valuers esl a fa is h th e s pp ropriate valu 31 ion teenniq ues anc i n d uis to the model. The
externa, valuers report to the management of the Company 1 is r fir-dings for every reporting pen mi to explain the
¦cause offlucluaSionsinfhe fair value oftheassets sncHiabiliHes
Information shout the vacation Lechniques and npute used in deLarrninmg the fair value of various assefs and
Il b h II I IPS are dreefased in notes no 30
2.4 Revenue Recognition
I. Sale of goods
Revenue ss recognised upon transfer of eonlioL of promisee goods to customers n an amount that reffaefa ilia
consjueratfan which the Company expects to receive in exchange for those goods
Revenue front sale of goods is recogn-sed at tlx; point in time when control is transferred to the customer wn ch is
[reunify or. drepatclfa delivery of goods based on contract whh customers
Revenue is measured on the tranMctipfi price, Which is ihe consideration. griiusted for volume discount, price
connessions, incentives and returns, f pry as specified in 1ne Contracts with customers Revenue excludes iaxe$
nolfarted from customers bn riefi^lt of tha rjovemmerr AccruaiB for discount.'' incenlrve end reLums are
esli ii^iiedriising the rips! likely rielhori) trass i an Hrcurnutoted expenerce find underlying schemes and
artapgdmdflte with CUStomfelfi Due to the shDri ri^Lura O''- urmdil Iiariud uivan to uusiuma.-s Ultra i''- no financing
compel rent m toe ooritracL
The Company has adopted hid A3 11 s Revenue from CcHifractwilh Custonwrs, wrth effect from April : 2LTU. led AS
1 lb asfablishfes principles for reporting information about the nature, amount, tming and uncertairnty of rever-ire aivd
casn flows orsmg from the oooiracts with its customers and replaces indAS ; 3 Revenue and I rto AS 11 Constructor
Ccml''acis.
ii Oiherlnconie
¦? dividend income from investmonls is recognised when ihe snareho-rier''s nrjht to receive p^ymen- hes been
established Wflicn IS when fh= Shdreu: rifir-; gppmve tf''.e dividend- inrov CFd rf-nf 11 is gmhahle flisl fhe acnnomic
benefits Will howto ifia company and 1he nrrpiiril n; incxjme r:sn be me isured rei.jhlyl
u. Interest Incni rre 1 fpm u frna i icial a seel it 1 ocogntee d when it rs pru t:a bte that 11 ¦¦t erswofftlc barrel its wi il flow to ti»
Coil many and Luu amount of incumi; can bu meaflUrad rulijby. IrKorast l.''totomu'' s attorned Ori d ;,m<: basis, uy
refer&nce to the pmcipal outstanding and at Ihe effective Interest rata up plica uto. which IS the rate that exactly
discounts Gstbnalod future cosh occipLi through the expected ''ife of tho hr-andal asset to that as sot''s net carrying
amount on initial recognition.
2.5 Leases
A contract IB, ar contains, a =m-.e if tKt= contract Conveys tee right to contra tee I.iss at an identifies asset For a n^riori nf
I ime in-exr: (tenge for coTisideralâC-n.
Company as a le-.rsee
the Cui n jahy reOugniven riyhteat-UHa a;; set reyreaentin( 1:1 s nub I to u He the l, n J a: ly ing asst I to 1 (he lease letm at Lb e
lease uml M n u ncu irte 1 it ri ate. T ho coif or (f 10 right 01-uSc as £Ut measured a f r ite ul.eil ut lalI (xmipr ifte ol Lhu amount of
the initial measurement of the .¦ ease liability adjusted f;:i any tease payments mada a; or before the comm&rKennant
Sato less any reasa incent. ves received, pi us ai 1 y Initial direct costs incu 1 red and art estimate of costs to bo Incu rro d by
tic lessee in dismantling and removing the unde-lying asset or restoring the undorlyng asset or sue on which it is
located The right-erf:l so assets is subsequently measured at cost less any accumulated de pn&oation, accum u lated
impairment losses, if any and adjusted for ary remeasure mem of tee lease liability. The right-chuse assets ore
deprecated usmg the svaighr-line method from rhe commericement date over the shorter of lease term or useful life
of rjght-of-use asset The estimated useful lives of nghhcNjae assets ore determines nn tee seme basis as those of
property plant and ewipmen Right ot-use e&ttets are tested fen impairment whenever there is any indication thnt
their carrying amounts may pot he reonyemh-e Impam-non: loss, ''f any |s recognised "¦ Ihe statement -nf prnfi: er''c
loss.
The Company measures the lease I ability el tee present value of ihe lease payments mat are no1, paid at the
riummencement date of She la-tune I lit- urese payments gis drauuUnted using Lhu Inter as! rale Implicit In thu lease. d
that rate c^ei: 1 be -enuily datarrrtined If thief rate cannot ba readily defaimiried, (tie company uses irseiwmfcfflal
burrowing rate The lease payments shall include tineo payntenli-. varable loose payments residual value
gu a rantees, eve rose price of a p u rchase op Port where the company ;s rea sonably certa 1 ¦ to exercise tha L option an d
paymwits of penah ies for ttmi r-ating the lease, if ll 10 ea se term reflects tee ressee eve rdsl ng a n pption to tern: mate
the lease. The lease liability is subsequently re-measured hy increasing the co Tying amount to ref led interest on the
lease liability, reducing the carrying amount ta reflect ttie lease paynrems made and re-meast-reg the carrying
smou nt la reflect any reassessment or lease modifications or to reflect revised m-su hstance fixed lease payments
The Company recognijces [he amounI n\Pie re-meas: ireri 1 hlit rd iert5g liability due to.rTiod''fitetPpn as ai: adjirstment tn
I he ruhl-nt-use assel and stfrienienl of profit and loirs depenmng upon the nail ire nJ mooifl ration Where the. narryir;;
aphount ot Ilia ffght-oi-uraa apse! is reduced io zero Sod I here Is a further reduction In I be measure men I of I lie lease
lieu lily, file Company recog 11 iZesany remaining amcnMTtofthe re-measurement in Statement of pfol-Lend loss.
The Company has elected not 1o apply the requIremvrls of Ind AS 116 Leases io short term leases of alI assets that
have a lease- term of \1 months ir loss and leases foi whicl tha underlying asset is of low value, Tho loaso payments
associated wrfh teese leosc-s are r ecognizcd as an expense one straight- li no bass over 1he lease (inn
2.6 Fo rel gn Cu rrency fran sactio ns & Transl atie 113
The f u notional currency of the C orr p 3 ny is Indian rupee
Transactions in foreign --urrency are rerouted at the exchnsge rate prevail-ng on ihe date of transaction Foreign
currency denominated monelary sssete end liabilities are Irensieted al the exchange rate prevailing on th.fi oalance
sheet ria lf=.
tKchanqe rale differences resulting ''iciu faieign Currency IsHnsacl-rns se11led during Ihe nerind mcludmq yEHi-
iStdtrans^lftfioh cif ascete n Uab Mss ars m the Htat&mtntof prefituiid feats
Nan-rrKHialary assets ''.vtilch am measured in terms of hfelOHcai cost da ntn ntflfl ted ih a foreign currency, are reported
Lsi 1 iy tiie exchange rate at ilia date of Initial hansalhwi.
Changes 1 n fai r ¦¦¦ a! u u of f or.varrt coittracls Designated as fair value hedge are rec&g n ised in tho statement ot profit an u
loss.
2.7 BorrcwinoCosts
Borrowing ccsts direully-attnn-ulablc 10 the acquisition, construction or production of qualifying assets-ore added to the
cost of ihos* assefs. until such Tme 03 the assets are sutjstsr.fial^ ready for their intended use Interest income
earned or. the temporery investment of specific borrow1 ng? pending their expenditure on qualifying .assets is
nerniater from (he borrowing tosts eligible for napitehsntion. CdpitateatkJfl nt morrawng cost is susnended ^rnl
chnrqer In the steteu enl gt Profit and 1 nss during extenheri periods whenar.live deveiupmem arfivily nn the
qualifying nsseli: is iilairuiilnd. All ohier hoirewim rests -j-e reenqu Ked In profit of loss in |ha perinn- in yfh ch they are
incurred.
2.6 Govurnmenlgrunts
(il U overn man l g rants I n reupecl to m a nu factu r Ing u nits localetl i n developin y rey Ion s :
The Compa ivy rs enntted to van cus i nceittives r''rant govunnneni autnoritics 1 n respect of manufacturing urn ts ¦ ocatea
leftlevataplrig regions. Tne Company accounts for ts entitle m cuts on accrua''bas son approval ofiâte mlilai dahm by
the releva nt authorities and th c re is reasonable assu nance that the gra nts w 11 he received
{ii) Govern merit g rants in re 5 pect of ad ditton a I Capital Expenditures :
Gtivamnien< gr^mlr. woos h primary condit.np is ''hat tl ''.Ef Company 5htHJ in pu rctias e. non struct nr otherwise gppi jirn
cspila'' awets is acconnled tor as deferred income The grtmt is renogmsed as incpm9ever Ihe iteof 2, depreciable
asset by accounting deferred income n ''.he Steternent nt Pro I1 lane Losron a SYsLer''''ahr and fBflonat baps ov^rthe
useful I ife ct Ihe h Suet
fur) Export Incentives
Expert incentives under VflruXJSectlefnes urn EJOCDLi''tLid for id |imj ye-m h?1 export
£.9 Employee benefits
{1) Defined Contribution Plan:
Payn^o-nts to defined contribution ret foment benefit schemes viz Company''s Pncivtoenl Tuno Scheme and
Sups rannuation F u nd are recognised as a n e upense whar ¦ th-e employee s have rendered me service entitling :hem to
theeontritwjtiwi
{£) Defined Benefit Pten;
Pdr defined benelil rehrsmeoi b&hefH plans, the rnsl r.l nrovid-rq nenerus is determiner! using the projected unit credit
me I find. with eutLHnal valuations being barrrgd nur a I the arid of eaeh annual reuorling fur nod. Ftameasuremenl
composing actuarial gains and losses die effect of lha changes to the asset calling hi applicable) and the reiuu 1 on
plan assets faxdudmg intorasLl. is rutucted lumiadihk- y In ftpSjlaUMTIdrl of fnarl''Mal position With -j charge ;;i credit
1 ecog nlsed Iri otl ter nwnpnelianslve Ihcwim rrilhe period ir 1 which t! my occur.
Remeosuremenl recognised in othar compnohersivt income is reflected immediately in retained earn ngs aittl will
not be reclassified to profit or toss. Past sen- ;co cost is recognised in profit or loss In the penod of a plan amendment.
Net interest is calculated by applying Ihc discount rate at the beginning of (tie period <0 Ihe riel defined benefit liability
or asseI, Defined ben efit cosls a^e categ onsetl as follows
¦ service cost (including ctirrenl sendee cost, past service cos!, as toafi os gains and tosses on Curtailments arxt
settlements):
¦ net interest expense or income; and
¦ re measurement
{i} Gratuity:
The Company has an oblige Lion towards gratuity, a de lined bent lit retirement plan covering eligible employees. The
plan provides for a lump sum payment to vested employees at raliramant death white in emptoyrnenl rn on
I emu notion ofernploymsnt of an amounl equivalent 1o 1 S.''26 days salary payable for cadi completed year of service
Vesting occurs upon completion of five years at service The Company accounts for the liability for gratuity benefits
payable m Future based on an fride pendent actuarial valuation The Company has taken a Group Gratuity cum Life
Assgnance Scheme with L ife I n surancc Corco ration for future payment of g ratuity to the ellgibie emotoyces
{ii) Compensa-ledAbscness.
The Company provides for the encashment of compensated absences with pey sufcjec" to certain rules Tpe
employees are entitled (o accumulate compensated absences subject to cedar limits, for Mure erd^ihteent
Accu mulated leave, which is expected to be utilised within the next twelve months. is treated as short-term employee
bene Tit and the acc-i imute led leave eXpenter to be earned toward beyond Iwelve mn.iIJi is beaten hs long-term
employee bene''i I which er s provide rl based on toe 11 u n ider nf days pf i n Utt ised nnmpen sated absent ail 11 le bn sis
el id independent (Mtjuanidf val jal-urt.
£.10 Taxation
I ncoma Lax expense comprise s current tax expense and th c net change in the datarre d La x asset or liability duni'' L; the
yctar. Currant and deferred tax are recognised in profit or loss, except when they relate to items that are recognised fo
ether comprehuns-vo income or directly in equity, m whicn case, the curr-e mane deferred tax are 3 so recogmsec n
otlâor comprehensive Income or directly in equity, respectively income ia* expense represents the sum of ihe tax
currently payable a nd deferred tax.
Current income lux
The fex currently payable is hussrl no taxable nfofi1 for hie year Tax a re profit differs from profit hefnre tax as
reported in me steterrmnl pf pmfrL or toss and nrt-er cornprenens''ve LrmomDystaterrenl of prnf.t nr loss her,--ruse oi
Perns ftf income Of expense that are laxan e or deriLjrdime Id other years sod Items I hat never !ax:in e m
deductible.
Deferred income tunes
Deferred income fen is recognised using the balance sfieel approach. Deferred lax assets and liabilities are
reorngn-sed for deductible enri fexuble tefrtpwary differences arising between Ihe ia* haseoi esselsanâ Ifekillt esaqri
their carrying amount. sxrepl whan the deferred iimme (ax arses 1mm the ipilna .Rsonniiion rd qoorrwill or an assel
Dr liability m a Iransael|fpt1 that is not a buninaeS cumbmalmn and affecis neither aiiCO anting nor taxable profit Of loss at
Lh L! tit i>e d tl to transaction.
Defamed tax asset are recognis-cid lotho extent that ,-L is probable (Fiat taxable profit aim be avai-ablo against which B*a
? aductibfe temporary dillsrences and the carry forward of urtusad tax credits and unused tax tosses can bo nfllised.
T no ca-nying amou n t of deferred Inooinie fax assists i s reviewed as each report) :kj date ana induced to the e xterrt tlial. t
Is no longer piobsbfe thst sufficem taxable profit wil; be avn liable to alfew niI or part of the deferred i n come lax asset to
be utilised.
Deferred fex assets and lisbil ties are measured using fiubsfentively.''inacted tax rates expected to apply to fejfeh e
Income in the years in which the temporary rt if Ferenc^* are expeefed to be reserved nr seined Deferred lax SffltKfe
flfld liabilil.es are n"seâ viiften they rarefe to ncome Lhxss levied by the same fexatnn euVinriiyand 1be relevant entity
Intends to settle riscni''eril tax assets anc haOi litres On a net h-nSfe
2.11 Property, Plant and Equrpmeiit
Proparty. pfei tl ai id equipment I » id foi us* In pi ud action or tu pply of goods or sorviots oi for admliifstralivrs pu i pusus
are staled at cost loss accumulatod doprec-aLioni''ainomzaLlon loss accumufetod inipairmenL, .f any. The cost of
property, plant S.c-L|j pment comprises -ts purchase- pfite net of any trade discounts and rebates, any import duties
and other Saxes {other than those suosequenfl/ recoverable from the lax authorities) any d rectly attr bufao c
expenditure on mu king the asset reedy far its Intended use. and interest cn borrowings .attribulabtelo acquisition of
a: n litying fixed ass ets u p to the dale the asset is rendy For its fr iter-bred iiss.
Capifa work-1''-progress for production, supply of administrative purposes is carded at cost less accuniufeteri
impairmen t oss. if any. < inti I nonslriyctton and festal latino n,re cnmpfefe and I h = asset IS ready t-n r its infended Lise
Depmnlatmu is racing n zed (other Ihadr>n capital wn-rk-m-pmgresH) on a straight!inebears over the estimateduseli.il
lives dI ressglS in respect nl properly qfenl (£ equipment & Cbffl^utsrs acquired afler 1st April 20QG Properly plants
ecuiprneitl niclLtftingrKfOfeefery bu,I:ang fui 11iture JixirLures & velUC s arqui ied pnur to J st Api¦ 12D(Hiare deprecfetad
uiLtle: WCW Midi:, d ai the rafes preset bud uudor Schedule; II of G&mjpgtiles Ant, 2d 113. DapfadaWn on assets
acquired^ purchased, soFct/dSpardedduring the year I* provided or. noro-rata basis fiom thadalflofea^iaddllltirt till
flic date of salcFretircmeriL
Tho economic useful lives of assets is assessed based on atedmiry: evaluation, tak ng into accuunttbe nafjre of
assets, ine estmâiated usage of assets tlâ.e operating condihops of theossets, past h- story of replacement, anticipaten
technological changes, ma ntenance history, etc Thr- eslimaied useful life s reviewed at the e"1 -if each repod-cg
period, with effect of any change in estimate being accounted for on a prospective basis
Where the oust oF psrtcif tlie asset is sigflifwafit to It''S total cost of !Fie asseFs and the LJsefu'' life of that F>an is drffereitl
Fmrn the 11 sefi. I of the nstltflini nq as set nseFiri life >:tl lhar 11 iFica nt pari is determi 11 ed -sr p a rately Deprenint-o u at >= i ich
significant pad, if any, ts hasedon the useful life of that pad.
Frmit iciEd land is not dupreciaiad.
An itom of property, plant and equipmam is doracocmiad upon disposal or whan no fulure economic benefits are
expected to arise from the conti need use of the a sset. An y gam or loss ans. ng on tri« d sposai or retire me nt of an iten
of property, eta nt and eguipmient, ctetermtued us the qiforauce behvecn the sales proceeds an d tl-e carrying amot.iât
pfttia asset, is recognized in the StFifement of Profit or Less
Rightoft.se assets are dsrrec.aled overrhe reuse psnod without considering any residual arsalvage value
2.12 Intar gibLe As sets
Imanqihle 9S5eiM wild ''mile Liseridl I''vee lh.-jt are acquired senaratEly are earned al rosl ihsu artcuuriHated
ai iKn ti nation Ann: tii h I inn Is rec-nq ri zed nn 0 k I; aigFi! i ii ie basi s over 11'' e ir e stlmaled useful lives of 5 ye e i s. which
retfects ute pa Lfern i n wn ictt me asset''s economic; be 11 a I ts a ¦ e Coil so mud The es I i r a lad usari. I life 13le amortizatibn
matfjod and tnu emortlzabcm pc nod arc ruviowaiJ at the liiilI of uad'' reporting ponoc. witl effect uf any change n
estimate being acowiiiiqd f&t pn a proepacbvu basis.
An irttangible asset cfereqpgriiized on d''Sposal ot wcien no futurt; e-conomlc oenetits aro expocled from use or
ijisposa i Gail i s or losses ads mg from de -recorj i'' itlon of a n int&i; gible asset, nneasured as ifio dlffs renco beiwoen tl''a
net oispossl process s end rhe H(rying amount of rhe asset, a nd a re recognised in the profit or ioss when the asset is
rterer/jgnifrefl
2.13 Im parrme nt or la ncj i ble a nil i nta r.q ible as a &ts othe r than gcodwiff:
AI ttie end ul im th i sport injj pe r;u-J, die C i ?m pa ny i ev ewi Ilia Ca fTyii iq amount s of |ls 1u-igi trie a i vd in La ng ible aast t£ Lb
tiatfHmine wtiuiiior thora is any1 indication that Ib&Ea assets have. suffcrM an Impairment toss. M arty such inmcai''ni.
uJsts, [he mcovorahie amotml of tnu asset is asUtnaled in «der to datamiin* the extent of lha impairment lose (if
¦anyi. Whan it is nol possible [o estimate the recovarabia amount of an individual asset. Lire Company estimates the
recoverable amount of the cash generating unit to. which the asset belongs.
Recoverable s mount is the higher o>'' fa if value less costs of dispose andvniuc-n use In ossessi-ng folue ip use, the
BBlimaled fut.re tosh News are discounted to the r present value using a pre laxcK^dount rale that reflects cumanl
⢠rket assessments of the Jime vp ii .1* of money and t he ris^s speedic to the asset for wn ch the estimates of future
ces h flows have nor been adjusted
11 the necoyerahle arnpttnl n1 an asset (nr cash-genera I mg nrut} is estimated 1n he ess than its carrying a mount. I he
carrying s mount o1 the assel |or cash-rjH aerating unll) Is rertuned tn ile recoverable aniour.l An -Nina 1 ''irient loss is
reotjgri iced immetilaâely in prpfM ann lo?$.
When ar 11111.:h relent lose SUbSiHjtjeillly revarsus, tire tarrying a mount ul dm atsef tor a r;a&ti-g«Tbfallrg LmitJ Is
increased to flic revised estlmats of lls recoverable amount uut so (tat !no increased caLying amount docs; nol
exocud Lria cairyi-ng amount that would have been deuarminod had no impairment loss boon recognised foeEtio asset
(or cash generating uniO in prior years. A reversal of a n I mpa imient loss is recognized immedialel y in profit and loss.
2.14 inventories
Inventories of raw materials, stock in trade, atones S. spares Fue packing materia work in program . 3âocfch bade
and finished goods see valued et the lower of cost and net realizable value aifter providing for obsolescence end other
los sen. whe re cons-.n p red neoes sarv S lock 0< scrap and sper-l a nid is valued ar net -egli cgble val ue f~OSl rompirieses
all on-lit Of purchase. C05 1 Of conve.- sipn arid n|iie â cords incurred in h 1 ng mg I iia iuvp n lories 1o their p reSenj lone kern
an d c- ndil ion Stares a nd s nBrES 3 re val .led on weighted avp rage com bam s and h :| nth p rs are vail, p ri on a h i FfJ
basis:2.15 Financial Instruments
financial assets and liabilities are tedtantsad when tha Company becomes a party 1o ino coniractLril provis ons bf
the instrument. financial assets and liabilities arc ii tia&y measured at fair value. Transaction costs Ihat ane directly
aLtuUulaore fu ihe acquisition or issue of financial assets and financta liabiiilnis tender ihan financial assets and
financial icibi-ifies at fair value irirough prefit or loss) ere added toordeductccfrom the fair value measured or. ntUn-
recog n ition of f man ciai asset or financial l:ah Hi I y.
Cash and cash equivalents
The Company considers gII highly Liquid financiei instrumerls, whim ere readily coflvertitite into known amounts of
resti that nre subject ban Ins gnifioFinl rink of r.t''ange in value Find having r-riginal mailurifies oflhTpe months r,r leas
from lire rirttg of nurrfnese, Lnbeoash eguivalents. Cesh end fissli eguivelents cons nT balances wifti banks which
BTfil unre-ilrluted tar p,-i|htlradwal and tiflagd
he CornpHiiy''s curiunt 1ax Is calculated using liix ratBS ttjthavu C-ueu eoaefed or sub star llwty Liuictcd by the end
or the reporllng period.
Mar 31, 2018
1. CORPORATE INFORMATION
The Company was incorporated on July 21,1973. The Company is engaged in Manufacturing of chemical intermediates, heavy organic chemicals and performance chemicals. As on March 31, 2018 Manekchand Panachand Trading Investment Company Pvt Ltd, holding company owned 63.99% of the company''s equity share capital. The Company''s registered office is located at Mumbai, Maharashtra India and manufacturing facility is located at Roha, Raigad District, Maharashtra, India. The company shares are listed in Bombay Stock Exchange (BSE)
2. SIGNIFICANT ACCOUNTING POLICIES:
2.01 Statement of Compliance
In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (referred to as âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2017. Previous period numbers in the financial statements have been restated to Ind AS. In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company has presented a reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (âPrevious GAAPâ) to Ind AS of Shareholdersâ equity as at March 31,2017 and April 1, 2016 and of the Other comprehensive income for the year ended March 31, 2017 and April 1, 2016. These financial statements have been prepare in accordance with Ind AS as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013.
2.02 Basis of preparation and presentation
These financial statements have been prepared on the historical cost basis, except for certain financial instruments which are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price which that would be received or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
2.03 Use of estimate
"The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expense for the periods presented.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognizes in the period in which the estimates are revised and future periods are affected. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and differences between actual results and estimates are recognized in the periods in which the results are known/materialize.
Key source of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment of investments, useful lives of property, plant and equipment, valuation of deferred tax liabilities and provisions and contingent liabilities.
Impairment of investments
The Company reviews its carrying value of investments carried at cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Val auction of deferred tax assets
The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy for the same has been explained under Note 2.10.
Provisions and contingent liabilities
Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events; itâs probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money (if the impact of discounting is significant) and the risks specific to the obligation. The increase in the provision due to unwinding of discount over passage of time is recognized as finance cost. Provisions are reviewed at the each reporting date and adjusted to
reflect the current best estimate. If it is no longer probable that an out flow of economic resources will be required to settle the obligation, the provision is reversed.
A provision for onerous contracts is recognized when the expected benefits to be derived by the company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the expected net cost of continuing with the contract. Before a provision is established, the company recognizes any impairment loss on the assets associated with that contract.
A disclosure for a contingent liability is made where there is a possible obligation that arises from past events and 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 the past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.â
Fair value measurements and valuation processes
Some of the companyâs assets and liabilities are measured at fair value for financial reporting purposes. The company has obtained independent fair valuation for financial instruments wherever necessary to determine the appropriate valuation techniques and inputs for fair value measurements. In some cases the fair value of financial instruments is done internally by the management of the Company using market-observable inputs.
"In estimating the fair value of an asset or a liability, the company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the company engages third party qualified valuers to perform the valuation. The qualified external valuers establish the appropriate valuation techniques and inputs to the model. The external valuers report to the management of the Company their findings for every reporting period to explain the cause of fluctuations in the fair value of the assets and liabilities. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in notes no 27."
2.04 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.
i. Sale of goods
Revenue from the sale of goods is recognised when the goods are delivered and titles have passed, at which time all the following conditions are satisfied:
- the company has transferred to the buyer the significant risks and rewards of ownership of the goods;
- the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
- the amount of revenue can be measured reliably;
- it is probable that the economic benefits associated with the transaction will flow to the company; and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from sales and operation includes Excise Duty but excludes Sales Tax, Value Added Tax & GST
ii. Other Income
a. Dividend income from investments is recognised when the shareholderâs right to receive payment has been established which is when the shareholders approve the dividend, (provided that it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably).
b. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetâs net carrying amount on initial recognition.
2.05 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Operating Lease:
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. Operating lease payments are recognised as an expense on a straight-line basis over the lease term.
Finance Lease:
Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss.
2.06 Foreign Currency
The functional currency of the Company is Indian rupee. Income and expenses in foreign currencies are recorded at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses arising on settlement and restatement are recognised in the statement of profit and loss.
2.07 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
2.08 Government grants
(i) Government grants in respect to manufacturing unites located in developing regions: The Company is entitled to various incentives from government authorities in respect of manufacturing units located in developing regions. The Company accounts for its entitlements on accrual basis on approval of the initial claim by the relevant authorities and there is reasonable assurance that the grants will be received.
(ii) Government grants in respect of additional Capital Expenditures : Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire capital assets is accounted for as deferred income. The grant is recognised as income over the life of a depreciable asset by accounting deferred income in the Statement of Profit and Loss on a systematic and rational basis over the useful life of the asset.
(iii) Export Incentives Export incentives under various schemes are accounted in the year of export.
2.09 Employee benefits
(1) Defined Contribution Plan: Payments to defined contribution retirement benefit schemes viz. Company''s Provident Fund Scheme and Superannuation Fund are recognised as an expense when the employees have rendered the service entitling them to the contribution.
(2) Defined Benefit Plan: For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income in the period in which they occur.
Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest i s calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
Defined benefit costs are categorised as follows: - service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);- net interest expense or income; and - remeasurement.
(I) Gratuity:
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15/26 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in future based on an independent actuarial valuation. The Company has taken a Group Gratuity cum Life Assurance Scheme with Life Insurance Corporation for future payment of gratuity to the eligible employees.
(ii)Compensated Absences:
The Company provides for the encashment of compensated absences with pay subject to certain rules. The employees are entitled to accumulate compensated absences subject to certain limits, for future encashment. Accumulated leave, which is expected to be utilised within the next twelve months, is treated as short-term employee benefit and the accumulated leave expected to be carried forward beyond twelve month is treated as long-term employee benefit which are provided based on the number of days of un utilised compensated absence on the basis of an independent actuarial valuation.
2.10 Taxation
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. Income tax expense represents the sum of the tax currently payable and deferred tax.
Current income tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before taxâ as reported in the statement of profit or loss and other comprehensive income/statement of profit or loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying units intends to settle the asset and liability on a net basis
"Deferred income taxes
Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities
are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction."
Deferred income tax asset are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.
2.11 Property, Plant and Equipment
Property, plant and equipment held for use in production or supply of goods or services or for administrative purposes are stated at cost less accumulated depreciation/amortization less accumulated impairment, if any. The cost of fixed assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.
Capital work-in-progress for production, supply of administrative purposes is carried at cost less accumulated impairment
loss, if any, until construction and installation are complete and the asset is ready for its intended use.
"Depreciation is recognized (other than on capital work-in-progress) on a straight line basis over the estimated useful lives of assets in respect of property plant & equipment & computers acquired after 1st April 2006. Property plant & equipment including non-factory building furniture fixtures & vehicles acquired prior to 1st April 2006 are depreciated under WDV Method at the rates prescribed under Schedule II of Companies Act, 2013. Depreciation on assets acquired/ purchased, sold/discarded during the year is provided on a pro-rata basis from the date of each addition till the date of sale/retirement."
The economic useful lives of assets is assessed based on a technical evaluation, taking into account the nature of assets,
the estimated usage of assets, the operating conditions of the assets, past history of replacement, anticipated technological changes, maintenance history, etc. The estimated useful life is reviewed at the end of each reporting period, with effect of any change in estimate being accounted for on a prospective basis.
Where the cost of part of the asset is significant to the total cost of the assets and the useful life of that part is different from the useful of the remaining asset, useful life of that significant part is determined separately. Depreciation of such significant part, if any, is based on the useful life of that part. Freehold land is not depreciated.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment, determined as the difference between the sales proceeds and the carrying amount of the asset, is recognized in the Statement of Profit or Loss.
For transition to IND AS the company has elected to continue with the carrying value of all its property plant and equipment recognised as on 1st April 2016 transition date measured as per previous GAAP and used that carrying value as its deemed cost as of the transition date.
2.12 Intangible Assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization. Amortization is recognized on a straight line basis over their estimated useful lives of 3 years, which reflects the pattern in which the assetâs economic benefits are consumed. The estimated useful life, the amortization method and the amortization period are reviewed at the end of each reporting period, with effect of any change in estimate being accounted for on a prospective basis.
An intangible asset is derecognised on disposal or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognised in the profit or loss when the asset is derecognised.
2.13 Impairment
Financial assets (other than at fair value)The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. IND AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction.
For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
2.14 Inventories
Inventories of raw materials, stock-in-trade, stores & spares ,Fuel, packing material, work in progress, stock in trade and finished goods are valued at the lower of cost and net realizable value after providing for obsolescence and other losses, where considered necessary. Stock of scrap and spent acid is valued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition . Stores and spares are valued on weighted average cost basis and all others are valued on a FIFO basis.
2.15 Financial Instruments:
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability.
Cash And Cash Equivalents:
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
Financial Assets At Amortised Cost:
Financial assets are subsequently measured at amortised cost if these financial assets are held within a
business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets At Fair Value Through Other Comprehensive Income:
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial Assets At Fair Value Through Profit Or Loss:
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in profit or loss.
Investment In Subsidiaries:
Investment in subsidiaries are measured at cost as per IND AS 27 - Separate Financial Statements.
Financial liabilities:
Financial liabilities are measured at amortised cost using the effective interest method.
Financial Guarantee Contracts:
A Financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instruments. Financial guarantee contracts issued by a holding company are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:
-The amount of loss allowance determined in accordance with impairment requirements of IND AS 109; and
- The amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IND AS 18.
Equity Instruments:
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the proceeds received net off direct issue cost.
Reclassification of Financial Assets:
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior manage ment determines change in the business model as a result of external or internal changes which are significant to the companyâs operations. Such changes are evident to external parties. A change in the business model occurs when a company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses (including impairment gains and losses) or interest.
Offsetting Of Financial Instruments:
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
2.16 Earnings Per Share (EPS)
The Company reports basic and diluted earnings per share in accordance with Ind AS 33 on Earnings per share. Basic earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit or loss for the period by the weighted average number of equity shares outstanding during the period as adjusted for the effects of all diluted potential equity shares except where the results are anti-dilutive.
2.17 Cash Flow Statement
The Cash Flow Statement is prepared by the indirect method set out in IND AS 7 on Cash Flow Statements and presents cash flows by operating, investing and financing activities of the Company.
2.18 Current/Non-Current Classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is classified as current when it satisfies any of the following criteria:
- It is expected to be realized or intended to be sold or consumed in normal operating cycle
- It is held primarily for the purpose of trading
- It is expected to be realized within 12 months after the date of reporting period, or
- Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after reporting period.
Current assets include the current portion of non-current financial assets.
All other assets are classified as non-current.
A liability is current when it satisfies any of the following criteria:
- 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 12 months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period Current liabilities include the current portion of long term financial liabilities.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets and their realization in cash and cash equivalents. The Company has identified 12 months as its operating cycle.
2.19 Share Capital
Ordinary Shares Ordinary shares are classified as equity. Incremental costs, if any, directly attributable to the issue of ordinary shares are recognized as adduction from other equity, net of any tax effects.
2.20 Fair Value Measurement
Fair value is the price that would be received from the sale of 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 an asset or transfer the liability takes place either:
- in the principle market for the asset or liability
- in the absence of principle market, in the most advantageous market for the asset or liability.
The principle 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.
The fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:-
Level 1 - Quoted (Unadjusted) Market prices in active markets for incidental assets or liabilities
Level 2 -Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3-ValuationTechniquesforwhichthelowestlevelinputthatissignificanttothefair value measurement is
unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers that have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Determination of Fair Value
1) Financial Assets - Debt Instruments at amortized cost.
After initial measurement the financial assets are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or cost that are an integral part of the EIR.
2) Financial Assets - Debt Instruments at Fair Value through Other Comprehensive Income (FVTOCI)
Measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the Other Comprehensive Income (OCI). On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to P&L.
3) Debt instruments, derivatives and equity instruments at Fair Value through Profit or Loss (FVTPL)
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
4) Financial Liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit & loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Companies financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.
Subsequent Measurement Fair Value Through Profit & Loss
Financial liabilities at fair value through profit & loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. All changes in fair value of such liabilities are recognised in statement of profit or loss.
Loans and Borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. The EIR amortization is included as finance costs in the statement of profit and loss.
2.21 Dividend
Dividend on share is recorded as liability on the date of approval by the shareholders.
2.22 Investments
Long Term Investments are carried at cost. Provision for diminution is made to recognize the decline, other than temporary in the value of these investments. Current investments are carried at lower of the cost and fair value.
2.23 Segment Reporting
The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market/fair value factors. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included
under unallocated revenue / expenses / assets / liabilities.
Mar 31, 2017
a) Basis of preparation of Financial Statements
The financial statements are prepared in accordance with generally accepted accounting principles in India. The company has prepared these financial statements to comply in all material respects with the accounting standard notified under section 133 of Companies Act, 2013. The financial statements have been prepared on accrual basis and under historical cost convention. The accounting policies adopted in the preparation of financial statement are consistent with those of previous year.
b) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.
c) Revenue Recognition
Sales of Products are recognized when significant risks and rewards of ownership of products are passed on to customers. Sales are stated at realizable values and are recorded net of excise duty, sales tax and returns. Dividend Income is recognized when the right to receive dividend is established. Interest income is recognized on the time proportion method.
d) Property, Plant and Equipment
(i) Property, Plant and Equipment are stated at their original cost including interest, borrowing cost and other expenses directly related to qualifying assets during construction period.
(ii) Cost of Property, Plant and Equipment not ready for their intended use before such date is disclosed under Capital Work in Progress.
(m) All costs relating to up gradations/ enhancements are generally charged off as revenue expenditure unless they bring significant additional benefits of lasting nature.
(iv) CENVAT Credits on capital goods are recognized in the books when the company becomes eligible to claim the same and are reduced from the cost of respective asset. Depreciation on these assets are calculated on the net amount.
(v) Property, plant and equipment includes spare parts, stand-by equipment and servicing equipment where the useful life of such assets are more than twelve months.
e) Depreciation
(i) Assets individually costing Rs. 5,000/- or less are depreciated fully in the year of purchase.
(ii) Depreciation on Leasehold land is over the primary period of lease.
(iii) Plant and Equipment acquired before 1st April 2006, building including non-factory building, furniture, fixture and vehicle are depreciated under WDV method at rates prescribed in Schedule II of Companies Act, 2013.
(iv) Plant and Equipment acquired after 1st April 2006 and computer are depreciated in accordance with Schedule II of Companies Act, 2013.
(v) Depreciation on Effluent Treatment Plant has been provided @100%.
f) Borrowing Cost
The borrowing cost attributed to the acquisition or constructions of qualifying assets are capitalized as a part of cost of such assets. A qualified asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing cost are charged to Statement of Profit and Loss.
g) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.
h) Investments
Long term investments are stated at cost net of provisions. Investments in shares of foreign subsidiary is expressed in Indian currency at the rate of exchange prevailing at the time when the original investment was made. When market value becomes less than cost, provision is considered only when the diminution is considered as being permanent by the management.
I) Valuation of Inventories
Inventories of Raw Materials, Stores and Spare parts, Packing Material, Fuel, Work-in-progress, Stock in Trade and Finished Goods are stated âat cost or net realisable value, whichever is lowerâ. Stock of Scrap and Spent Acid is valued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Stores and Spares are valued on Weighted Average Cost Basis. All other inventories are valued at Cost on âFirst-ln-First-Outâ Basis. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company,
j) Foreign Currency Transaction
Foreign currency transactions are recorded by applying the rates on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss for the period.
All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognized in the Statement of Profit and Loss for the year. All nonâmonetary assets and liabilities are stated at the rates prevailing on the date of the transaction. Exchange difference arising on reporting of long term foreign currency monetary items relating to acquisition of depreciable capital assets at rate different from those at which they were initially recorded in the previous financial statement are being depreciated over the balance life of assets. Exchange difference arising on reporting of all other long term foreign currency monetary items having a term of twelve month or more at the date of origination is amortised over the balance period of such monetary item,
k) Retirement Benefits
(i) Short-term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.
(ii) Post employment and other long term employee benefit are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services .The expenses is recognized at the present value of amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of employment and other long term benefit are charged to the Statement of Profit and Loss.
I) Research and Development cost:
(i) Revenue expenses on Research and Development are written off to the Statement of Profit and Loss.
(ii) Capital expenditure on Research and Development is shown as addition to fixed assets,
m) Taxation
Current tax is determined as the amount of tax payable in respect of taxable income for the financial year. Deferred tax is recognized subject to the consideration of prudence in respect of deferred assets on timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In the event of unabsorbed depreciation and carry forward loses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets,
n) Provisions
A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates,
o) Insurance Claims
Claims receivable are accounted at the time of lodgment depending on virtual certainty of receipt,
p) Earnings Per Share (EPS)
Basic EPS
The earnings considered in ascertaining the Companyâs basic EPS comprise the net profit/(loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.
Diluted EPS
The net profit/(loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS..
Mar 31, 2016
SIGNIFICANT ACCOUNTING POLICIES :-
a) Basis of preparation of Financial Statements
The financial statements are prepared in accordance with generally accepted accounting principles in India. The company has prepared these financial statements to comply in all material respects with the accounting standard notified under section 133 of Companies Act, 2013. The financial statements have been prepared on accrual basis and under historical cost convention. The accounting policies adopted in the preparation of financial statement are consistent with those of previous year.
b) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.
c) Revenue Recognition
Sales of Products are recognized when significant risks and rewards of ownership of products are passed on to customers. Sales are stated at realizable values and are recorded net of excise duty, sales tax and returns. Dividend Income is recognized when the right to receive dividend is established.
Interest income is recognized on the time proportion method.
d) Fixed Assets
(i) Fixed assets are stated at their original cost including interest, borrowing cost and other expenses directly related to qualifying assets during construction period.
(ii) Cost of fixed assets not ready for their intended use before such date is disclosed under Capital Work in Progress.
(iii) All costs relating to up gradations/ enhancements are generally charged off as revenue expenditure unless they bring significant additional benefits of lasting nature.
(iv) CENVAT Credits on capital goods are recognized in the books when the company becomes eligible to claim the same and are reduced from the cost of respective asset. Depreciation on these assets are calculated on the net amount.
e) Depreciation
(i) Assets individually costing '' 5,000/- or less are depreciated fully in the year of purchase.
(ii) Depreciation on Leasehold land is over the primary period of lease.
(iii) Plant and Equipment acquired before 1st April 2006, building including non-factory building, furniture, fixture and vehicle are depreciated under WDV method at rates prescribed in Schedule II of Companies Act, 2013.
(iv) Plant and Equipment acquired after 1st April 2006 and computer are depreciated in accordance with Schedule II of Companies Act, 2013.
(v) Depreciation on Effluent Treatment Plant has been provided @ 100%.
f) Borrowing Cost
The borrowing cost attributed to the acquisition or constructions of qualifying assets are capitalized as a part of cost of such assets. A qualified asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing cost are charged to Statement of Profit and Loss.
g) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of assets net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof is adjusted to the carrying value of the respective assets, which in case of CGU, are allocated to its assets on a prorata basis.
h) Investments
Long term investments are stated at cost net of provisions. Investments in shares of foreign subsidiary is expressed in Indian currency at the rate of exchange prevailing at the time when the original investment was made. When market value becomes less than cost, provision is considered only when the diminution is considered as being permanent by the management.
i) Valuation of Inventories
Inventories of Raw Materials, Stores and Spare parts, Packing Material, Fuel, Work-in-progress, Stock in Trade and Finished Goods are stated ''at cost or net realizable value, whichever is lower''. Stock of Scrap and Spent Acid is valued at net realizable value. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Stores and Spares are valued on Weighted Average Cost Basis. All other inventories are valued at Cost on ''First-In-First-Out'' Basis. Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the past experience of the Company. j) Foreign Currency Transaction
Foreign currency transactions are recorded by applying the rates on the date of transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss for the period.
All foreign currency denominated monetary assets and liabilities are translated at the exchange rates prevailing on the balance sheet date. The resultant exchange differences are recognized in the Statement of Profit and Loss for the year. All non-monetary assets and liabilities are stated at the rates prevailing on the date of the transaction. Exchange difference arising on reporting of long term foreign currency monetary items relating to acquisition of depreciable capital assets at rate different from those at which they were initially recorded in the previous financial statement are being depreciated over the balance life of assets. Exchange difference arising on reporting of all other long term foreign currency monetary items having a term of twelve month or more at the date of origination is amortized over the balance period of such monetary item. k) Retirement Benefits
(i) Short term employee benefits are recognized as expenses at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.
(ii) Post employment and other long term employee benefit are recognized as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expenses is recognized at the present value of amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of employment and other long term benefit are charged to the Statement of Profit and Loss.
l) Research and Development cost
(i) Revenue expenses on Research and Development are written off to the Statement of Profit and Loss.
(ii) Capital expenditure on Research and Development is shown as addition to fixed assets. m) Taxation
Current tax is determined as the amount of tax payable in respect of taxable income for the financial year.
Deferred tax is recognized subject to the consideration of prudence in respect of deferred assets on timing differences; being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. In the event of unabsorbed depreciation and carry forward loses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets. n) Provisions
A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made based on technical evaluation and past experience. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
o) Insurance Claims
Claims receivable are accounted at the time of lodgment depending on virtual certainty of receipt.
p) Earnings Per Share (EPS)
Basic EPS
The earnings considered in ascertaining the Company''s basic EPS comprise the net profit/(loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. Diluted EPS
The net profit/(loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.
Mar 31, 2015
A) Basis of preparation of Financial Statements
The financial statements are prepared in accordance with generally
accepted accounting principles in India. The company has prepared these
financial statements to comply in all material respects with the
accounting standard notified under section 133 of Companies Act, 2013.
The financial statements have been prepared on accrual basis and under
historical cost convention. The accounting policies adopted in the
preparation of financial statement are consistent with those of
previous year.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Difference between actual
results and estimates are recognized in the period in which the results
are known/ materialized.
c) Revenue Recognition
Sales of Products are recognized when significant risks and rewards of
ownership of products are passed on to customers. Sales are stated at
realizable values and are recorded net of excise duty, sales tax and
returns.
Dividend Income is recognized when the right to receive dividend is
established.
Interest income is recognized on the time proportion method.
d) Fixed Assets
(i) Fixed assets are stated at their original cost including interest,
borrowing cost and other expenses directly related to qualifying assets
during construction period.
(ii) Cost of fixed assets not ready for their intended use before such
date is disclosed under Capital Work in Progress.
(iii) All costs relating to up gradations/ enhancements are generally
charged off as revenue expend iture unless they bring significant
additional benefits of lasting nature.
(iv) CENVAT Credits on capital goods are recognized in the books when
the company becomes eligible to claim the same and are reduced from the
cost of respective asset. Depreciation on these assets are calculated
on the net amount.
e) Depreciation
(i) Assets individually costingRs. 5,000/-or less are depreciated fully
in the year of purchase.
(ii) Depreciation on Leasehold land is overthe primary period of lease.
(iii) Plant and Equipment acquired before 1st April 2006, building
including non-factory building, furniture, fixture and vehicle are
depreciated under WDV method at rates prescribed in Schedule II of
Companies Act, 2013.
(iv) Plant and Equipment acquired after 1st April 2006 and computer
are depreciated in accordance with Schedule II of Companies Act, 2013.
(v) Depreciation on EffluentTreatment Plant has been provided @ 100%.
f) Borrowing Cost
The borrowing cost attributed to the acquisition or constructions of
qualifying assets are capitalized as a part of cost of such assets. A
qualified asset is one that necessarily takes su bstantial period of
time to get ready for its intended use. All other borrowing cost are
charged to Statement of Profit and Loss.
g) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of assets net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate. An impairment loss is reversed if there has been
change in the recoverable amount and such loss either no longer exists
or has decreased. Impairment loss/reversal thereof is adjusted to the
carrying value of the respective assets, which in case of CGU, are
allocated to Its assets on a pro-rata basis.
h) Investments
Long term investments are stated at cost net of provisions. Investments
in shares of foreign subsidiary is expressed in Indian currency at the
rate of exchange prevailing at the time when the original investment
was made. When market value becomes less than cost, provision is
considered only when the diminution is considered as being permanent by
the management.
i) Val uation of I nventories
Inventories of Raw Materials, Stores and Spare parts, Packing Material,
Fuel, Work-in-progress, Stock in Trade and Finished Goods are stated
'at cost or net realisable value, whichever is lower1. Stock of Scrap
and Spent Acid is valued at net realizable value. Cost comprises all
cost of purchase, cost of conversion and other costs incurred in
bringing the inventories to their present location and condition.
Stores and Spares are valued on Weighted Average Cost Basis. All other
inventories are valued at Cost on 'First-ln-First-Out' Basis. Due
allowance is estimated and made for defective and obsolete items,
wherever necessary, based on the past experience of the Company.
j) Foreign Currency Transaction
Foreign currency transactions are recorded by applying the rates on the
date of transaction. Exchange differences arising on foreign currency
transactions settled during the year are recognized in the Statement of
Profit and Loss for the period.
Ail foreign currency denominated monetary assets and liabilities are
translated at the exchange rates prevailing on the balance sheet date.
The resultant exchange differences are recognized in the Statement of
Profit and Loss for the year. All non-monetary assets and liabilities
are stated at the rates prevailing on the date of the transaction.
Exchange difference arising on reporting of long term foreign currency
monetary items relating to acquisition of depreciable capital assets at
rate different from those at which they were initially recorded in the
previous financial statement are being depreciated over the balance
life of assets. Exchange difference arising on reporting of all other
long term foreign currency monetary items having a term of twelve month
or more at the date of origination is amortised over the balance period
of such monetary item.
k) Retirement Benefits
(i) Short term employee benefits are recognized as expenses at the
undiscounted amount in the Statement of Profit and Loss for the year in
which the related service is rendered.
(ii) Post employment and other long term employee benefit are
recognized as an expense in the Statement of Profit and Loss for the
year in which the employee has rendered services .The expenses is
recognized at the present value of amount payable determined using
actuarial valuation techniques. Actuarial gains and losses in respect
of employment and other long term benefit are charged to the Statement
of Profit and Loss.
l) Research and Development cost:
(i) Revenue expenses on Research and Development are written off to the
Statement of Profit and Loss.
(ii) Capital expenditure on Research and Development is shown as
addition to fixed assets.
m) Taxation
Current tax is determined as the amount of tax payable in respect of
taxable income for the financial year.
Deferred tax is recognized subject to the consideration of prudence in
respect of deferred assets on timing differences; being the difference
between taxable incomes and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
In the event of unabsorbed depreciation and carry forward loses,
deferred tax assets are recognized only to the extent that there is
virtual certainty that sufficient taxable income will be available to
realize such assets. In other situations, deferred tax assets are
recognized only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realize these
assets.
n) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made based on technical evaluation and past
experience. Provisions are not discounted to its present value and are
determined based on management estimate required to settle
the obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management esti
mates.
o) Insurance Claims
Claims receivable are accounted at the time of lodgment depending on
virtual certainty of receipt.
p) Earnings Per Share (EPS) Basic EPS
The earnings considered in ascertaining the Company's basic EPS
comprise the net profit/(loss) after tax. The number of shares used in
computing basic EPS is the weighted average number of shares
outstanding during the year.
Diluted EPS
The net profit/(loss) after tax and the weighted average number of
shares outstanding during the year are adjusted for all the effects of
dilutive potential equity shares for calculating the diluted EPS.
None of the Share Holders other than Holding Company holds more than 5%
as on the reporting date and previous period.
Reconciliation of Shares outstanding as at the beginning and at the end
of the reporting period
The Company has only one class of equity shares having at par value off
10/- per Share. Each holder of equity shares is entilted to one vote
per share. The company declares and pays dividend in indian Rupees.
The dividend proposed by the Board of Director is subject to the
approval of the share holders in the ensuing Annual general meeting. In
the event of liquidation of the company, the holder of equity shares
will be entitled to receive remaining assets of the company
afterdistribution of all preferential amounts. The distribution will be
in proportion to number of shares held by share holder.
The Company has only one class of Preference Shares having at par value
of Rs.10/- per share. The Preference Shares are Non-Convertible in
nature bearing fixed dividend rate of 9%. The Non-Convertible,
Cumulative, Redeemable Preference Shares shall be redeemed at the
option of the Compay any time after 3 (three) years but not later than
10 (Ten) years from the date of issue & as decided by the Board of
Directors in accordance with the terms of the issue and in accordance
with the provisions of the Companies Act, 2013, or any re-enactment
thereof..
Mar 31, 2014
A) Basis of preparation of Financial Statements
The financial statements are prepared in accordance with generally
accepted accounting principles in India. The company has prepared these
financial statements to comply in all material respects with the
accounting standard notified under the Companies (Accounting Standard)
Rules, 2006 issued under sub-section 3C of section 211 of the Companies
Act, 1956. The financial statements have been prepared on accrual basis
and under historical cost convention. The accounting policies adopted
in the preparation of financial statement are consistent with those of
previous period.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Difference between actual
results and estimates are recognized in the period in which the results
are known/ materialized.
c) Revenue Recognition
Sales of Products are recognized when significant risks and rewards of
ownership of products are passed on to customers. Sales are stated at
realizable values and are recorded net of excise duty, sales tax and
returns. Dividend Income is recognized when the right to receive
dividend is established. Interest income is recognized on the time
proportion method.
d) Fixed Assets
(i) Fixed assets are stated at their original cost including interest,
borrowing cost and other expenses directly related to qualifying assets
during construction period. (ii) Cost of fixed assets not ready for
their intended use before such date is disclosed under Capital Work in
Progress.
(iii) All costs relating to up gradations/ enhancements are generally
charged off as revenue expenditure unless they bring significant
additional benefits of lasting nature. (iv) CENVAT Credits on capital
goods are recognised in the books when the company becomes eligible to
claim the same and are reduced from the cost of respective asset.
Depreciation on these assets are calculated on the net amount.
e) Depreciation
(i) Assets individually costing Rs. 5,000/- or less are depreciated fully
in the year of purchase.
(ii) Depreciation on Leasehold land is over the primary period of
lease.
(iii) Depreciation on Building and Plant and Machinery added upto 30th
June, 1986, are charged on straight line method at the rates as
mentioned in schedule XIV of the Companies Act, 1956.
(iv) Depreciation on Plant and Machinery and equipments acquired after
1st July, 1986 up to 31st March, 2006 are charged on the written down
value method as provided in Schedule XIV to the Companies Act, 1956.
(v) Depreciation on Computers, Factory and Non factory Building,
Vehicles acquired after 1st July, 1986 have been calculated on written
down method at rates specified under Schedule XIV of Companies Act,
1956.
(vi) Depreciation on Plant & Machinery, equipment and computer acquired
after 1st April, 2006 are calculated on straight line method at rate
provided under Schedule XIV of Companies Act, 1956.
(vii) Depreciation on Effluent Treatment Plant has been provided @
100%.
f) Borrowing Cost
The borrowing cost attributed to the acquisition or construction of
qualifying assets are capitalized as a part of cost of such assets. A
qualified asset is one that necessarily takes substantial period of
time to get ready for its intended use. All other borrowing cost are
charged to Statement of Profit and Loss.
g) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of assets net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate.
An impairment loss is reversed if there has been change in the
recoverable amount and such loss either no longer exists or has
decreased. Impairment loss/reversal thereof is adjusted to the carrying
value of the respective assets, which in case of CGU, are allocated to
its assets on a prorata basis.
h) Investments
Long term investments are stated at cost net of provisions. Investments
in shares of foreign subsidiary is expressed in Indian currency at the
rate of exchange prevailing at the time when the original investment
was made. When market value becomes less than cost, provision is
considered only when the diminution is considered as being permanent by
the management.
i) Valuation of Inventories
Inventories of Raw Materials, Stores and Spare parts, Packing Material,
Fuel, Work-in-progress, Stock in Trade and Finished Goods are stated
''at cost or net realisable value, whichever is lower''. Stock of Scrap
and Spent Acid is valued at net realizable value. Cost comprises all
cost of purchase, cost of conversion and other costs incurred in
bringing the inventories to their present location and condition.
Stores and Spares are valued on Weighted Average Cost Basis. All other
inventories are valued at Cost on ''First-In-First-Out'' Basis. Due
allowance is estimated and made for defective and obsolete items,
wherever necessary, based on the past experience of the Company.
j) Foreign Currency Transaction
Foreign currency transactions are recorded by applying the rates on the
date of transaction. Exchange differences arising on foreign currency
transactions settled during the year are recognized in the Statement of
Profit and Loss for the period.
All foreign currency denominated monetary assets and liabilities are
translated at the exchange rates prevailing on the balance sheet date.
The resultant exchange differences are recognized in the Statement of
Profit and Loss for the period. All non-monetary assets and liabilities
are stated at the rates prevailing on the date of the transaction.
Exchange difference arising on reporting of long term foreign currency
monetary items relating to acquisition of depreciable capital assets at
rate different from those at which they were initially recorded in the
previous financial statement are being depreciated over the balance
life of assets. Exchange difference arising on reporting of all other
long term foreign currency monetary items having a term of twelve
months or more at the date of origination is amortised over the balance
period of such monetary item.
k) Retirement Benefits
(i) Short term employee benefits are recognized as expenses at the
undiscounted amount in the Statement of Profit and Loss for the period
in which the related service is rendered.
(ii) Post employment and other long term employee benefit are
recognized as an expense in the Statement of Profit and Loss for the
period in which the employee has rendered services. The expenses is
recognized at the present value of amount payable determined using
actuarial valuation techniques. Actuarial gains and losses in respect
of employment and other long term benefits are charged to the Statement
of Profit and Loss.
l) Research and Development cost
(i) Revenue expenses on Research and Development are written off to the
Statement of Profit and Loss.
(ii) Capital expenditure on Research and Development is shown as
addition to fixed assets.
m) Taxation
Current tax is determined as the amount of tax payable in respect of
taxable income for the financial period. Deferred tax is recognized
subject to the consideration of prudence in respect of deferred assets
on timing differences; being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. In the event of unabsorbed
depreciation and carry forward loses, deferred tax assets are
recognized only to the extent that there is virtual certainty that
sufficient taxable income will be available to realize such assets. In
other situations, deferred tax assets are recognized only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available to realize these assets.
n) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made based on technical evaluation and past
experience. Provisions are not discounted to its present value and are
determined based on management estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
estimates.
o) Insurance Claims
Claims receivable are accounted at the time of lodgment depending on
virtual certainty of receipt.
p) Earnings Per Share (EPS) Basic EPS
The earnings considered in ascertaining the Company''s basic EPS
comprise the net profit/(loss) after tax. The number of shares used in
computing basic EPS is the weighted average number of shares
outstanding during the year.
Diluted EPS
The net profit/(loss) after tax and the weighted average number of
shares outstanding during the year are adjusted for all the effects of
dilutive potential equity shares for calculating the diluted EPS.
Rights, preferences and restrictions attached to each class of shares.
The company has only one class of equity share having at par value of Rs.
10/- per share. Each holder of equity share is entitled to one vote per
share. The company declares and pays dividend in Indian Rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the share holders in the ensuing Annual General Meeting. In the
event of liquidation of the company, the holders of equity shares will
be entitled to receive remaining assets of the company after
distribution of all preferential amounts. The distribution will be in
proportion to number of shares held by the share holder. The company
has only one class of Preference shares having at par value of Rs. 10/-
per Share. The Preference shares are non-convertible in nature bearing
fixed dividend rate of 9%. The non-convertible, cumulative, redemable
preference shares shall be redeemed at the option of the compay any
time after 3 (three) years but not later than 10 (Ten ) years from the
date of issue as decided by the Board of Director in accordance with
the term of the issue and in accordance with the provision of the
Companies Act, 1956, or any re-enactment thereof.
Jun 30, 2013
A) Basis of preparation of Financial Statements
The financil statements are prepared in accordance with generally
accepted accounting principles in india .The company has prepared these
financial statement to comply in all material respects with the
accounting standard notified under the companies (Accounting Standard)
Rules,2006 issued under sub-section3C of section 211 of
CompaniesAct,1956. The financial statement have been prepared on an
accrual basis and under historical cost convention. The accounting
policies adopted in the preparation of financial statement are
consistent with those of previous year.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Difference between actual
results and estimates are recognized in the period in which the results
are known/ materialized.
c) Revenue Recognition
(i) Sales of Products are recognized when significant risks and rewards
of ownership of products are passed on to customers. Sales are stated
at realizable values, and are recorded net of excise duty recovery,
sales tax and returns.
(ii) Dividend Income is recognized when the right to receive dividend
is established.
(iii) Interest income is recognized on the time proportion method.
d) Fixed Assets
i) Fixed assets are stated at their original cost including interest,
borrowing cost and other expenses directly related to qualifying assets
during construction period.
ii) Cost of fixed assets not ready for their intended use before such
date is disclosed under Capital Work in Progress.
iii) All costs relating to up gradations/enhancements are generally
charged off as revenue expenditure unless they bring significant
additional benefits of lasting nature.
iv) CENVAT Credits on capital goods are recognised in the books when
the company becomes eligible to claim the same and are reduced from the
cost of respective asset. Depreciation on these assets are calculated
on the net amount.
e) Depreciation
i) Assets individually costing Rs 5,000/-or less are depreciated fully
in the year of purchase
ii) Depreciation on Leasehold land is over the primary period of lease.
iii) Depreciation on Building and Plant and Machinery added upto 30th
June 1986, are charged on straight line method at the rates as
mentioned in schedule XIV of the Companies Act,1956.
iv) Depreciation on Plant and Machinery and equipments acquired after
1s''July, 1986 upto 31st March, 2006 are charged on the written down
value method as provided in Schedule XIV to the Companies Act, 1956.
v) Depreciation on Computers, Factory and Non factory Building,
Vehicles acquired after 1st July, 1986 have been calculated on written
down method at rates specified under Schedule XIV of Companies Act,
1956.
vi) Depreciation on Plant & Machinery .equipment and computer acquired
after 1st April 2006 are calculated on straight line method at rate
provided under Schedule XIV of Companies Act. 1956.
vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.
f) Borrowing Cost
The borrowing cost attributed to the acquisition or construction of
qualifying assets are capitalized as a part of cost of such assets. A
qualified assets is one that necessarily takes substantial period of
time to get ready for its intended use. All other borrowing cost are
charge to Profit & Loss Account.
g) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of assets net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate. An impairment loss is reversed if there has been
change in the recoverable amount and such loss either no longer exists
or has decreased. Impairment loss / reversal thereof is adjusted to the
carrying value of the respective assets, which in case of CGU, are
allocated to its assets on a prorate basis.
h) Investments
Long term investments are stated at cost net of provisions. Investments
in shares of foreign subsidiary is expressed in Indian currency at the
rate of exchange prevailing at the time when the original investment
was made. When market value becomes less than cost, provision is
considered only when the diminution is considered as being permanent by
the management.
i) Valuation of Inventories
Inventories of Raw Materials, Stores and Spare parts, Packing Material,
Fuel, Goods-in-progress and Finished Goods are stated ''at cost or net
realisable value, whichever is lower''. Stock of Scrap and Spent Acid is
valued at net realizable value. Cost comprises all cost of purchase,
cost of conversion and other costs incurred in bringing the inventories
to their present location and condition. Cost formulae used are
''First-In-First-Out''or Weight Average cost'' as applicable. Due
allowance is estimated and made for defective and obsolete items,
wherever necessary, based on the past experience of the Company.
j) Foreign Currency Transaction
Foreign currency transactions are recorded by applying the rates on the
date of transaction. Exchange differences arising on foreign currency
transactions settled during the Period are recognized in the profit and
loss account for the Period.
All foreign currency denominated monetary assets and liabilities are
translated at the exchange rates prevailing on the balance sheet date.
The resultant exchange differences are recognized in the profit and
loss account for the Period. All non-monetary assets and liabilities
are stated at the rates prevailing on the date of the transaction.
Exchange difference arising on reporting of long term foreign currency
monitory items relating to acquisition of depreciable capital assets at
rate different from those at which they were initially recorded in the
previous financial statement are being depreciated over the balance
life of assets. Exchange difference arising on reporting of all other
long term foreign currency monetary items having a term of twelve month
or more at the date of origination is amortised over the balance period
of such monetary item.
k) Retirement Benefits
i) Short term employee benefit are recognized as an expenses at the
undiscounted amount in the profit and loss account for the Period in
which the related service rendered. ii) Post employment and other long
term employee benefit are recognized as an expense in the profit & loss
account for the Period in which the employee has rendered services. The
expenses is recognized at the present value of amount payable
determined using actuarial valuation techniques .Actuarial gains and
losses in respect of employment and other long term benefit are charged
to the profit and loss account.
I) Research and Development cost
i) Revenue expenses on Research and Development are written off to the
Profit and Loss Account. ii) Capital expenditure on Research and
Development is shown as addition to fixed assets.
m) Taxation
Current tax is determined as the amount of tax payable in respect of
taxable income for the assessment year. Deferred tax is recognized
subject to the consideration of prudence in respect of deferred assets
on timing differences; being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. In the event of unabsorbed
depreciation and carry forward loses, deferred tax assets are
recognized only to the extent that there is virtual certainty that
sufficient taxable income will be available to realize such assets. In
other situations, deferred tax assets are recognized only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available to realize these assets.
n) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made based on technical evaluation and past
experience. Provisions are not discounted to its present value and are
determined based on management estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
estimates.
o) Insurance Claims
Claims receivable are accounted at the time of lodgment depending on
virtual certainty of receipt.
p) Earnings Per Share (EPS) Basic EPS
The earnings considered in ascertaining the Company''s basic EPS
comprise the net profit/(loss) aftertax and after deducting preference
dividend on cumulative preference shares. The number of shares used in
computing basic EPS is the weighted average number of shares
outstanding during the year. Diluted EPS
The net profit/(loss) after tax and the weighted average number of
shares outstanding during the year are adjusted for all the effects of
dilutive potential equity shares for calculating the diluted EPS.
Mar 31, 2012
A) Basic of preparation of Financial Statements
The financial statements are prepared in accordance with generally
accepted accounting principles in India. The company has prepared these
financial statements to comply in all material respects with the
accounting standards notified under the Companies (Accounting Standard)
Rules, 2006 issued under sub-section 3C of section 211 of Companies
Act, 1956. The financial statements have been prepared on an accrual
basis and under the historical cost convention. The accounting policies
adopted in the preparation of financial statements are consistent with
those of previous year. During the financial year ended March, 2012,
the revised schedule VI notified under the Companies Act, 1956 has
become applicable to the company for preparation and presentation of
its financial statements. The company has also re-classified the
previous year figures in accordance with the requirements applicable in
current year.
b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Difference between actual
results and estimates are recognised in the period in which the results
are known/ materialised.
c) Revenue Recognition
i) Sales of Products are recognized when significant risks and rewards
of ownership of products are passed on to customers. Sales are stated
at realizable values and include exchange differences, and are recorded
net of excise duty recovery, sales tax and returns.
ii) Dividend Income is recognized when the right to receive dividend is
established.
iii) Interest income and expense is recognized on time proportion
method.
d) Fixed Assets
i) Fixed assets are stated at their original cost including interest,
borrowing cost and other expenses directly related to qualifying assets
during construction period.
ii) Cost of fixed assets not ready for their intended use before such
date are disclosed under Capital Work in Progress.
iii) All costs relating to up gradations/ enhancements are generally
charged off as revenue expenditure unless they bring significant
additional benefits of lasting nature.
iv) CENVAT Credits on capital goods are recognised in the books when
the company becomes eligible to claim the same and are reduced from the
cost of respective asset. Depreciation on these assets are calculated
on the net amount.
e) Depreciation
i) Assets individually costing Rs 5,000/- or less are depreciated fully
in the year of purchase
ii) Leasehold land depreciated over the primary period of lease.
iii) Depreciation on assets added upto 30th June 1986, are charged on
straight line method at the rates as mentioned in Schedule XIV of
Companies Act 1956.
iv) Depreciation on Plant and Machinery, equipments and computers
acquired after 1st July, 1986 up to 31 "March, 2006 are charged on the
written down value method as provided in Schedule XIV to the Companies
Act, 1956.
v) Depreciation on Factory and Non factory Building, Vehicles and
furniture fixtures acquired after 1st July, 1986 have been calculated
on written down method at rates specified under Schedule XIV of
Companies Act, 1956.
vi) Depreciation on Plant & Machinery, equipment and computers acquired
after 1st April, 2006 are calculated on straight line method at rates
provided under Schedule XIV of Companies Act, 1956.
vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.
f) Borrowing Cost .
The Borrowing Cost attributed to the acquisition or construction of
qualifying assets are capitalized as a part of cost of such assets. A
qualifying asset is one that necessarily takes substantial period of
time to get ready for its intended use. All other borrowing costs are
charged to Profit & Loss Account.
g) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of assets net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate. An impairment loss is reversed if there has been
change in the recoverable amount and such loss either no longer exists or
has decreased. Impairment loss / reversal thereof is adjusted to the
carrying value of the respective assets, which in case of CGU, are
allocated to its assets on a prorate basis.
h) Investments
Long term investments are stated at cost net of provisions. Investments
in shares of foreign subsidies are expressed in Indian currency at the
rate of exchange prevailing at the time when the original investment
was made. When market value of long term investments becomes less than
cost, provision is considered only when the diminution is considered as
being permanent by the management.
i) Valuation of Inventories
Inventories of Raw Materials, Stores and Spare parts, Packing Material,
Fuel, Goods-in-progress and Finished Goods are stated 'at cost or net
realisable value, whichever is lower'. Stock of Scrap and Spent Acid
is valued at net realizable value. Cost comprises all cost of purchase,
cost of conversion and other costs incurred in bringing the inventories
to their present location and condition. Cost formulae used are
'First-ln-First-Out' or 'Average cost' as applicable. Due allowance is
estimated and made for defective and obsolete items, wherever
necessary, based on the past experience of the Company, j) Foreign
Currency Transaction
Foreign currency transactions are recorded by applying the rates on the
date of transaction. Exchange differences arising on foreign currency
transactions settled during the year are recognised in the profit and
loss account for the year. All foreign currency denominated monetary
assets and liabilities are translated at the exchange rates prevailing
on the balance sheet date. The resultant exchange differences are
recognised in the profit and loss account for the year. All
non-monetary assets and liabilities are stated at the rates prevailing
on the date of the transaction. Exchange difference arising on
reporting of long term foreign currency monitory items relating to
acquisition of depreciable capital assets at rates different from those
at which they were initially recorded in the previous financial
statements are being depreciated over the balance life of the asset.
Exchange difference arising on reporting of all other long term foreign
currency monetary items having a term of twelve months or more at the
date of origination is amortised overthe balance period of such
monetary item, k) Retirement Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
ii) Post employment and other long term employee benefits are
recognized as an expense in the profit and loss account for the year in
which the employee has rendered services. The expense is recognized at
the present
* valye of the amount payable determined using actuarial valuation
techniques. Actuarial gains and losses in respect of post employment
and other long term benefits are charged to the profit and loss
account.
I) Research and Development cost
i) Revenue expenses on Research and Development are written off to the
Profit and Loss Account.
ii) Capital expenditure on Research and Development is shown as
addition to fixed assets,
m) Taxation
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred tax is recognised subject to the consideration of prudence in
respect of deferred assets on timing differences; being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
In the event of unabsorbed depreciation and carry forward loses,
deferred tax assets are recognised only to the extent that there is
virtual certainty that sufficient taxable income will be available to
realize such assets. In other situations, deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realize these
assets,
n) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made based on technical evaluation and past
experience. Provisions are not discounted to its present value and are
determined based on management estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
estimates.
o) Insurance Claims
Claims receivable are accounted at the time of lodgment depending on
virtual certainty of receipt,
p) Earnings Per Share (EPS)
Basic EPS
The earnings considered in ascertaining the Company's basic EPS
comprise the net profit/(loss) after tax. The number of shares used in
computing basic EPS is the weighted average number of shares
outstanding during the year. Diluted EPS
The net profit/(loss) after tax and the weighted average number of
shares outstanding during the year are adjusted for all the effects of
dilutive potential equity shares for calculating the diluted EPS.
Mar 31, 2011
1) Basis of preparation of Financial Statements
The Accounts have been prepared on historical cost basis and as a going
concern complying in all material aspects with applicable accounting
principles in India, the notified Accounting Standards of the Companies
Accounting Standard Rules, 2006 and the relevant provisions of the
Companies Act, 1956.
2) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Difference between actual
results and estimates are recognised in the period in which the results
are known/ materialised.
3) Revenue Recognition
i) Sales of Products are recognized when significant risks and rewards
of ownership of products are passed on to customers. Sales are stated
at realizable values and include exchange differences, and are recorded
net of excise duty recovery, sales tax and returns.
ii) Dividend Income is recognized when the right to receive dividend is
established.
iii) Interest income and expense is recognized on time proportion
method.
4) Fixed Assets
i) Fixed assets are stated at their original cost including interest,
borrowing cost and other expenses directly related to qualifying assets
during construction period.
ii) Cost of fixed assets not ready for their intended use before such
date are disclosed under Capital Work in Progress.
iii) All costs relating to up gradations/ enhancements are generally
charged off as revenue expenditure unless they bring significant
additional benefits of lasting nature.
iv) CENVAT Credits on capital goods are recognised in the books when
the company becomes eligible to claim the same and are reduced from the
cost of respective asset. Depreciation on these assets are calculated
on the net amount.
5) Depreciation
i) Assets individually costing Rs. 5,000/- or less are depreciated
fully in the year of purchase
ii) Leasehold land depreciated over the primary period of lease.
iii) Depreciation on assets added upto 30th June 1986, are charged on
straight line method at the rates as mentioned in Schedule XIV of
Companies Act 1956.
iv) Depreciation on Plant and Machinery, equipments and computers
acquired after 1st July, 1986 up to 31st March, 2006 are charged on the
written down value method as provided in Schedule XIV to the Companies
Act, 1956.
v) Depreciation on Factory and Non factory Building, Vehicles and
furniture fixtures acquired after 1st July, 1986 have been calculated
on written down method at rates specified under Schedule XIV of
Companies Act, 1956.
vi) Depreciation on Plant & Machinery, equipment and computers acquired
after 1st April, 2006 are calculated on straight line method at rates
provided under Schedule XIV of Companies Act, 1956.
vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.
6) Borrowing Cost
The Borrowing Cost attributed to the acquisition or construction of
qualifying assets are capitalized as a part of cost of such assets.
Aqualifying asset is one that necessarily takes substantial period of
time to get ready for its intended use. All other borrowing costs are
charged to Profit & LossAccount.
7) Impairment
Fixed assets are reviewed at each balance sheet date for impairment, in
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of assets net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate. An impairment loss is reversed if there has been
change in the recoverable amount and such loss either no longer exists
or has decreased. Impairment loss / reversal thereof is adjusted to the
carrying value of the respective assets, which in case of CGU, are
allocated to its assets on a prorate basis.
8) Investments
Long term investments are stated at cost net of provisions. Investments
in shares of foreign subsidies are expressed in Indian currency at the
rate of exchange prevailing at the time when the original investment
was made. When market value of long term investments becomes less than
cost, provision is considered only when the diminution is considered as
being permanent by the management.
9) Valuation of Inventories
Inventories of Raw Materials, Stores and Spare parts, Packing Material,
Fuel, Goods-in-progress and Finished Goods are stated 'at cost or net
realisable value, whichever is lower'. Stock of Scrap and Spent Acid is
valued at net realizable value. Cost comprises all cost of purchase,
cost of conversion and other costs incurred in bringing the inventories
to their present location and condition. Cost formulae used are
'First-In-First-Out' or 'Average cost' as applicable. Due allowance is
estimated and made for defective and obsolete items, wherever
necessary, based on the past experience of the Company.
10) Foreign Currency Transaction
Foreign currency transactions are recorded by applying the rates on the
date of transaction. Exchange differences arising on foreign currency
transactions settled during the year are recognised in the profit and
loss account for the year.
All foreign currency denominated monetary assets and liabilities are
translated at the exchange rates prevailing on the balance sheet date.
The resultant exchange differences are recognised in the profit and
loss account for the year.AII non-monetary assets and liabilities are
stated at the rates prevailing on the date of the transaction.
11) Retirement Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
ii) Post employment and other long term employee benefits are
recognized as an expense in the profit and loss account for the year in
which the employee has rendered services. The expense is recognized at
the present value of the amount payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the profit and
Loss account.
12) Research and Development cost
i) Revenue expenses on Research and Development are written off to the
Profit and Loss Account.
ii) Capital expenditure on Research and Development is shown as
addition to fixed assets.
13) Taxation
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognised subject to the
consideration of prudence in respect of deferred assets on timing
differences; being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. In the event of unabsorbed depreciation and
carry forward loses, deferred tax assets are recognised only to the
extent that there is virtual certainty that sufficient taxable income
will bo available to realize such assets. In other situations, deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available to
realize these assets.
14) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made based on technical evaluation and past
experience. Provisions are not discounted to its present value and are
determined based on management estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
estimates.
15) Insurance Claims
Claims receivable are accounted at the time of lodgment depending on
virtual certainty of receipt.
16) Earnings Per Share (EPS) Basic EPS
The earnings considered in ascertaining the Company's basic EPS
comprise the net profit/(loss) after tax. The number of shares used in
computing basic EPS is the weighted average number of shares
outstanding during the year. Diluted EPS
The net profit/(loss) after tax and the weighted average number of
shares outstanding during the year are adjusted for all the effects of
dilutive potential equity shares for calculating the diluted EPS.
Mar 31, 2010
1) Basis of preparation of Financial Statements
The Accounts have been prepared on historical cost basis and as a going
concern complying in all material aspects with applicable accounting
principles in India, the notified Accounting Standards of the Companies
Accounting Standard Rules, 2006 and the relevant provisions of the
Companies Act, 1956.
2) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Difference between actual
results and estimates are recognised in the period in which the results
are known/ materialised.
3) Revenue Recognition
i) Sales of Products are recognized when significant risks and rewards
of ownership of products are passed on to customers. Sales are stated
at realizable values and include exchange differences, and are recorded
net of excise duty recovery, sales tax and returns.
ii) Dividend Income is recognized when the right to receive dividend is
established.
lii) Interest income and expense is recognized on time proportion
method.
4) Fixed Assets
i) Fixed assets are stated at their original cost including interest,
borrowing cost and other expenses directly related to qualifying assets
during construction period.
ii) Cost of fixed assets not ready for their intended use before such
date are disclosed under Capital Work in Progress.
iii) All costs relating to up gradations/ enhancements are generally
charged off as revenue expenditure unless they bring significant
additional benefits of lasting nature.
iv) CENVAT Credits on capital goods are recognised in the books when
the company becomes eligible to claim the same and are reduced from the
cost of respective asset. Depreciation on these assets are calculated
on the net amount.
5) Depreciation
i) Assets individually costing Rs 5,000/- or less are depreciated fully
in the year of purchase.
ii) Depreciation on Leasehold land is written off over the primary
period of lease.
iii) Depreciation on assets added upto 30th June, 1986, are charged on
straight line method at the rates specified in Schedule XIV of
Companies Act 1956.
iv) Depreciation on Plant and Machinery, equipments and computers
acquired after 1st July, 1986 up to 31st March, 2006 are charged on the
written down value method specified in Schedule XIV to the Companies
Act, 1956.
v) Depreciation on Factory and Non factory Building, Vehicles and
furniture fixtures acquired after 1st July, 1986 have been calculated
on written down method at rates specified in Schedule XIV of Companies
Act, 1956.
vi) Depreciation on Plant & Machinery, equipment and computers acquired
after 1st April, 2006 are calculated on straight line method at rates
specified in Schedule XIV of Companies Act, 1956.
vii) Depreciation on Effluent Treatment Plant has been provided @ 100%.
6) Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to Cash
Generating Unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of assets net selling price or its
value in use.
In assessing value in use, the estimated future cash flows from the use
of the assets are discounted to their present value at appropriate
rate. An impairment loss is reversed if there has been change in the
recoverable amount and such loss either no longer exists or has
decreased. Impairment loss / reversal thereof is adjusted to the
carrying value of the respective assets, which in case of CGU, are
allocated to its assets on a prorate basis.
7) Investments
Long term investments are stated at cost net of provisions. Investments
in shares of foreign subsidies are expressed in Indian currency at the
rate of exchange prevailing at the time when the original investment
was made. When market value of long term investments becomes less than
cost, provision is considered only when the diminution is considered as
being permanent by the management.
8) Valuation of Inventories
Inventories of Raw Materials, Stores and Spare parts, Packing Material,
Fuel, Goods-in-progress and Finished Goods are stated at cost or net
realisable value, whichever is lower. Stock of Scrap and Spent Acid is
vaiued at net realizable value. Cost comprises all cost of purchase,
cost of conversion and other costs incurred in bringing the inventories
to their present location and condition. Cost formulae used is
First-In-First-Out or Average cosf as applicable. Due allowance is
estimated and made for defective and obsolete items, wherever
necessary, based on the past experience of the Company.
9) Foreign Currency Transaction
Foreign currency transactions are recorded by applying the rates on the
date of transaction. Exchange differences arising on foreign currency
transactions settled during the ysar are recognised in the profit and
loss account of the year.
All foreign currency denominated monetary assets and liabilities are
translated at the exchange rates prevailing on the balance sheet date.
The resultant exchange differences are recognised in the profit and
loss account of the year. All non-monetary assets and liabilities art
stated at the rates prevailing on the date of the transaction.
The premium or discount on forward exchange contracts is recognized in
the profit and loss account over the period of the contract.
For forward exchange contracts and other derivatives that are not
covered by A3-11, the Company follows the guidance in the Announcement
of the ICAI dated 29th March, 2008 whereby for each category of
derivatives, the Company records mark-to-market iosses.
10) Retirement Benefits
i) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered,
ii) Post employment and other long term jriployee benefits are
recognized as an expense in the profit and loss account for the year in
which the employee has rendered services. The expense is recognized at
the present value of the amount payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the profit and
loss account.
11) Research and Development cost
i) Revenue expenses on Research and Development ara written off to the
Profit and Loss Account.
ii) Capital expenditure on Research and Development is shown as
addition to fixed assets.
12) Taxation
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Deferred tax is recognised subject to the consideration ot prudence in
respect of deferred assets on timing differences; being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subssquent periods,
in the event of unabsorbed depreciation and carry forward loses,
deferred tax assets are recognised only to the extent that there is
virtual certainty that sufficient taxable income will be available to
reailza such assets. In other situations, deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available to realize these
assets.
13) Provisions
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be r ade based on technical evaluation and past
experience. Provisions are not discounted to its present value and are
determined based on management estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
estimates.
14) Insurance Claims
Claims receivable are accounted at the time of lodgment depending on
virtual certainty of receipt.
15) Earnings Per Share (EPS) Basic EPS
The earnings considered in ascertaining the Companys basic EPS
comprise the net profit/(loss) after tax. The number of shares used in
computing basic EPS is the weighted average number of shares
outstanding during the year. Diluted EPS
The net profit/(loss) after tax and the weighted average number of
shares outstanding during the year are adjusted for all the effects of
dilutive potential equity shares for calculating the diluted EPS.
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