Significant Accounting Policies (Formerly Known As Emmbi Polyarns Limited) Corporate Information EMMBI INDUSTRIES LIMITED ('the Company') is a public limited company and is listed on BSE Limited and National Stock Exchange of India Limited (NSE). The Company is engaged in the business of Manufacturing and Trading of HDPE & PP - Woven Polymer Based Products. Note 1. SIGNIFICANT ACCOUNTING POLICIES 1. Basis of brparation of Financial Statements The Financial Statements of the Company have been brpared in accordance with the "Generally Accepted Accounting Principles in India" (Indian GAAP) to comply with Accounting Standards specified under Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the Act 1956") as applicable. Financial Statements have been brpared on accrual basis under Historical Cost Convention. The Accounting Policies adopted in brparation of Financial Statements are consistent with those followed in the brvious year. 2. Use of Estimates The Preparation of Financial Statements in confirmity with India GAAP requires judgements, estimates and assumption to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities if any on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which results are known and materialised. 3. Fixed Assets Fixed Assets are stated at cost less accumulated debrciation. The cost is inclusive of interest incidental expenses incurred during construction period and is net of cenvat credit availed and exchange rate difference arising on long term foreign currency monetary items in so far as they relate to the acquisition of debrciable asset. The fixed assets are tested for impairment. There is no impairment loss. Subsequent Expenditure related to tangible fixed asset are added to its book value only if they increase future benfits from the existing asset beyond its brviously assessed standard of performance. 4. Debrciation and Amortization In respect of Fixed Assets (other than Freehold Land) acquired during the year, Debrciation / Amortization is charged on a Straight Line Basis so as to write off the cost of the assets over the useful lives and for the assets acquired prior to 1st April 2014, the carrying amount as on 1st April 2014 is debrciated over remaining useful life based on evaluation. 5. Investments Non Current investments are valued at cost less provision for dimunition other than temporary dimunition in the carrying value of investment. 6. Valuation of Inventories Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their brsent location and condition. Raw materials, Stores and Spares are valued at weighted average cost. Processed stocks and finished goods are valued at material cost plus appropriate value of overheads. Provision for Excise duty on opening and closing inventory of finished goods (domestic stock and wastage) is included under Note No. 10. 7. Revenue Recognition Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made and after all the risks and rewards of ownership is transferred to the customer. Interest on Investments is recognised on a time proportion basis taking into account amounts invested and the rate of interest applicable Dividend Income on Investments is recognised for when the right to receive the payment is established. 8. Sales Sales are recognised on dispatch of material to customers. Sales are net of indirect taxes payable. 9. 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 an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. There are no Contingent Assets. 10. Employee Benefits a) Gratuity is accounted on the basis of valuation made by the LIC. Company created Trust with LIC for Gratuity. Contribution is paid to LIC Empolyees Group Gratuity Fund. b) Short Term Employee benefits The undiscounted amount of Short Term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services. c) Bonus and Leave Encashment is paid during the year. 11. Foreign Exchange Transactions a) Transactions in Foreign Currency are accounted at the exchange rate brvailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transactions are recognized in Profit & Loss A/c. b) All export proceeds not realised at the year end are restated at the rate brscribed in the month of March by Central Board of Excise and Customs. The exchange difference arising there from has been recognised as income / expenses in the Current Year's Profit & Loss A/c. c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss statement except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets. 12. 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. A Qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue. 13. Research and Development Expenses Research and Development Expenses were mainly divided into four main categories viz Raw Material Consumed, Manpower Cost Involved, Energy Cost and various incidental charges. Company is involved in developing special kind of Technical Textile which can be used as a Crop Protection cover from all hailstorms and sudden downpowers. This product has special property that it will allow the sunlight to pass without hurting the crop. Company has to conduct various trials and experiments to develop exact blend to suit and sustain the products in varried indian territory and with varied level of chemical substrate brsent in atmosphere. 14. Taxes on Income Tax Expense comprises of Current Tax and Deferred Tax: a) Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961. b) Deferred tax liabilities are recognised for future tax consequences attributable to the "timing differences" between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset is not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. 15. Earning Per Share Basic Earning per share is calculated by dividing the Net Profit for the period attributable to equity hareholders by the weighted average number of equity shares outstanding during the period. Note 32 Since Company operates in only one segment i.e. manufacture of HDPE/ PP/ raffia products and trading in similar items hence no need for separate disclosure of segment information as per AS - 17 issued by ICAI. Figures of Previous year have been rearranged / regrouped as and when necessary in terms of Current year's grouping. Note 33 As per our report of even date For K. J. SHAH & ASSOCIATES Chartered Accountants For and On behalf of the Board For Emmbi Industries Limited, FRN : 127308W K. J. SHAH (Proprietor) Membership No. 030784 Makrand Appalwar Managing Director Rinku Appalwar CFO Kaushal Patvi Company Secretary Place: Mumbai Date: 28th May, 2015 |