ll SIGNIFICANT ACCOUNTING POLICIES (i) General : These accounts have been brpared under historical cost convention in accordance with Generally Accepted Accounting Principles and the Accounting Standards brscribed under section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of Companies (Accounts) Rules, 2014 and other provisions of the Act, to the extent applicable. (ii) Fixed Assets : a. Fixed Assets are stated at cost less Debrciation. Interest and other financial charges on loans borrowed specifically for acquisition of capital assets are capitalised till the start of commercial production. b. All br-operative and trial run expenditure (net of realisation, if any) are capitalised. c. Projects under commissioning and other Capital Work in Progress are carried at cost, comprising direct cost, related incidental expenses and interest on borrowings made for the purpose of acquisition of fixed assets. (iii) Intangible Assets : Intangible Assets are recognised, only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. (iv) Debrciation and Amortisation: Tangible Assets : Debrciation on tangible assets is provided on the straight line method over the useful lives of assets as brscribed under Part C of Schedule II of the Companies Act, 2013 except for: i) Block, dies & moulds (other than high-end moulds) are debrciated @ 100% in the year of purchase itself on prorata basis. ii) Lease hold land is amortised over the period of lease. Intangible Assets : a. Goodwill - Consequent to the scheme of arrangement being accounted for under Purchase Method by adopting book value method, the cost rebrsenting goodwill recognised is being amortised to Statement of Profit & Loss over, the estimated useful life of five years. As per the terms of the scheme equivalent amount of such amortisation is transferred from General Reserve. The estimated useful life of Goodwill is reviewed by the management periodically and changes there in are taken cognizance of, by accelerating or decelerating the pace of amortisation. b. Trade Marks, Brands and other Intangible Assets are amortised over a period not exceeding 10 years. c. Software is debrciated over a period of six years on Straight Line Method. (v) Investments : Long Term Investments are stated at cost. Current Investments are stated at cost or fair value whichever is lower. Diminution in value of long term investments other than temporary in nature is charged to Statement of Profit & Loss. (vi) Inventories : The inventories are valued at cost or net realisable value whichever is lower except for work in progress and advertising material which are valued at cost. The Cost is calculated on weighted average method. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. (vii) Research & Development : Revenue expenditure on Research and Development is charged against the Profit for the year. (viii) Employee retirement benefits : a. The Company makes contributions towards provident fund and superannuation fund to the regulatory authorities to a defined contribution retirement benefit plan for qualifying employees, where the Company has no further obligations. Both the employees and the Company make monthly contributions to the Provident Fund Plan equal to a specified percentage of the covered employee's salary In Vapi, Dongari and Masat Units the superannuation fund is administered by the Life Insurance Corporation of India (LIC). Under the plan, the Company is required to contribute a specified amount to the retirement benefit plan to fund the benefits. In respect of certain employees, provident fund contributions are made to a Trust administered by the Company. The Company's liability is actuarially determined (using the Projected Unit Credit method) at the end of the year and any shortfall in the fund size maintained by the Trust set up by the Company is additionally provided for. Actuarial losses/gains are recognised in the Statement of Profit and Loss in the year in which they arise. b. Provision for Leave encashment and Gratuity is made on the basis of actuarial valuation as at the year end as per the requirements of Accounting Standard -15 (Revised 2005) on "Employee Benefits". c. The Company has defined benefit plan comprising of Gratuity fund with Life Insurance Corporation of India. In Vapi, Dongari and Masat units the Leave Fund is with Life Insurance Corporation of India. d. Actuarial gains and losses comprise experience adjustments and the effect of changes in the actuarial assumptions are recognised immediately in the Statement of Profit and Loss as income or expense. (ix) Voluntary Retirement Scheme : Expenditure incurred on voluntary retirement scheme is charged to profit in the year in which it is incurred. (x) Revenue from Operation : Sales includes duty drawback, license brmium on exports, Sales Tax net of Trade discounts and other rebates. (xi) Provisions and Contingent Liabilities : Provisions are recognised when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that a cash outflow will be required and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are disclosed when the Company has a possible obligation or a brsent obligation and it is probable that a cash outflow will not be required to settle the obligation. Provisions & Contingent Liabilities are revalued at each Balance Sheet date. (xii) Government Grants : Grants and subsidies from the government are recognised when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with. When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. Government grant in the nature of promoters' contribution is credited to the capital subsidy reserve. (xiii) Revenue Recognition : Income are recognised on accrual basis. (xiv) Foreign Currency Transactions : a. Forward Exchange Contract - The brmium or discount arising at the inception of forward exchange contracts entered into to hedge an asset / liability, is amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognised in the Statement of Profit and Loss in the reporting period in which the exchange rate change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expenses for the period. Transactions other than those covered by forward contracts are recognised at the exchange rate brvailing on date of transaction. Gains & losses arising on account of realisation are accounted for in Statement of Profit & Loss. b. Monetary Assets & Liabilities in foreign currency that are outstanding at the year end and not covered by forward contracts are translated at the year end exchange rates. c. The exchange differences arising from long term foreign currency monetary items relating to the acquisition of a debrciable asset are added to or deducted from the cost of the debrciable capital asset. Other exchange differences arising from Long-Term Foreign Currency Monetary Items are Transferred to "Foreign Currency Monetary Item Translation Difference Account" to be amortised over the life of such monetary items but not beyond March 31, 2020. Other exchange differences are recognized as income or expenses in the Statement of Profit & Loss. d. In respect of foreign currency option contracts which are entered into to hedge highly probable forecasted transactions the cost of these contracts, if any, is expensed over the period of the contract. Any profit or loss arising on settlement or cancellation of currency options is recognised as income or expenses for the period in which settlement or cancellation takes place. The effect of this currency options contracts outstanding at the year end, in the form of unrealised gains/ losses, is not recognised. (xv) Excise Duty : Excise duty payable on manufactured goods is accounted for at the time of despatch of goods from the factories and is included in finished goods (manufactured) held at the year end. (xvi) Borrowing Costs : Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. All other borrowing costs are charged to revenue. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. (xvii) Taxation : Provision for tax is made for both current and deferred taxes. Provision for current tax is made at the current tax rates based on assessable income. Deferred income tax reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets are recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. (xviii)Impairment of Assets : The Company identifies impairable assets at the year end in accordance with the guiding principles of Accounting Standard 28, for the purpose of arriving at impairment loss thereon being the difference between the book value and recoverable value of relevant assets. Impairment loss, when crystalises, are charged against revenues for the year. If at the balance sheet date there is an indication that a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. 2.Previous year's figures have been rearranged/regrouped wherever necessary. As per our report of even date For S. K. Agrawal & Co. Chartered Accountants R S Agarwal Chairman R S Goenka Director S B Ganguly Director S.K.Agrawal Partner S K Goenka Managing Director N H Bhansali CEO -Finance, Strategy & Company Secretary A K Joshi Business Development and CFO & AVP-Legal Place : Kolkata Date : 13th May, 2015 |