Notes to the Financial Statements 1. Corporate Information: Bhansali Engineering Polymers Limited is a Public Listed company registered in India, incorporated under the provisions of the Companies Act, 1956 and its shares are listed with NSE and BSE. The company is engaged in manufacturing of ABS and SAN resins which is classified under the category of Highly Specialized Engineering Thermoplastics. The manufacturing facilities of the company is located at Abu Road, Rajasthan and Satnoor in Madhya Pradesh. 2. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of brparation of financial statements The financial statements have been brpared on accrual basis and under the historical cost convention, modified by revaluation of fixed assets to comply in all material aspects, with the applicable accounting principles in India, mandatory Accounting Standards brscribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. (b) Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year. Differences between the actual results and estimates are recognized in the period in which the results are known/materialised. (c) Revenue Recognition (i) The Company recognizes sale at the point of dispatch of goods to the customers. Revenue from operations (net) are stated exclusive of Excise duty, Sales tax and are net of sales return and trade discount. (ii) Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. (iii) Dividend income is recognized when the right to receive payment is established. (iv) Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable. (d) Fixed Assets & Debrciation (a) Tangible Assets & Debrciation (i) Tangible Assets are stated at cost of acquisition/construction and includes amounts added on revaluation, wherever assets are revalued, less accumulated debrciation. All cost including financing cost attributable to the fixed assets to bring the assets to their intended use are capitalised. (ii) Debrciation on Fixed Assets is provided on the Straight Line Method (SLM) except in case of Plant & machinery (other than continuous process plant) where debrciation is provided on Written Down Value Method (WDV). Debrciation is provided based on the useful life of the assets as brscribed in Schedule II to the Companies Act, 2013. (iii) Cost of leasehold land is not amortised over the lease period. (iv) Debrciation on the assets purchased/ sold during the year has been provided on a pro-rata basis. (b) Intangible assets and amortization Intangible assets are valued at cost less amortization and comprise mainly of computer software licenses. Amortization takes place on a straight line basis over the assets anticipated useful life. The useful life is determined based on the period over which the asset is expected to be used and generally does not exceed 5 years. (e) Valuation of Inventories (i) Inventories are stated at cost or net realisable value whichever is lower. Cost include purchase price, non-refundable taxes and delivery and handling cost and all costs incurred in bringing the inventory to its brsent location and condition. Cost of raw materials, process chemicals, stores and spares, packing material, and other inventory is determined on weighted average basis. (ii) Finished goods and work in progress include cost of conversion and other costs (f) Employee benefits (i) Defined Contribution Plan Company's contributions paid/payable during the year to Provident Fund, ESIC, Labour Welfare Fund and Superannuation Fund are recognised in the Statement of Profit & Loss. (ii) Defined benefit plan The company's liabilities towards gratuity and leave encashment, a defined benefit obligation, is accrued and provided for on the basis of actuarial valuation, using the projected unit credit method as at the Balance Sheet date. (g) Foreign Currency Transactions (i) Foreign currency transactions are recorded at the exchange rate brvailing at the time of the transaction and exchange difference, if any, on settlement of transaction is recognised in the Statement of Profit & Loss. (ii) Amounts of foreign currency transactions remaining pending at the year end are recorded at the exchange rate brvailing at that time. (iii) All exchange differences arising on settlement/conversion on foreign currency transactions are included in the Statement of Profit and Loss. (h) Borrowing Cost Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalised as a part of the cost of these capitalised assets, upto the date when such assets is ready for its intended use. Borrowing costs on working capital is charged to the statement of Profit and Loss for the year. (i) Investments Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. (j) Excise Duty Cenvat is accounted as per exclusive method of accounting in terms of Accounting Standard - 2 on Valuation of Inventories, issued by the Institute of Chartered Accountants of India. (k) Taxation (i) Tax expense comprises of Current and Deferred Tax. Current Income Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. (ii) Deferred tax is recognised, subject to consideration of prudence on timing difference, being the difference between the taxable and accounting income/expenditure that originate in one year and are capable of reversal in one or more subsequent year(s). Deferred tax assets are not recognised unless there is virtual certainty that sufficient future taxable income will be available, against which such deferred tax asset will realise. (l) Leased Assets Assets acquired under finance lease, if any, which effectively transfer to the Company all the risks and benefits are disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability (m) Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements. (n) Impairment of Assets The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of asset or the recoverable amount of cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a brviously assessed impairment loss no longer exists, the recoverable is reassessed and the asset is reflected at the recoverable amount |