| Disclosure of accounting policies, change in accounting policies and changes in estimates explanatory I. CORPORATE INFORMATION:TatvaChintan Pharma Chem Private Limited was incorporated under the Companies Act 2013 (Erstwhile The Companies Act 1956) in India on June 12, 1996 having its registered office atPlot No 502/17, GIDC Estate, Ankleshwar GIDC, Ankleshwar, Bharuch - 393002.The group is primarily engaged in manufacturing and selling of quaternary compounds, bulk drugs and specialty chemicals.TatvaChintan Pharma Chem Private Limited has acquired 100 (100%) shares of TatvaChintanUSA Inc on07-01-2016 which is situated in Michelin, USA. It has also formed 100% subsidiary in Netharlands, Europe with authorized share capital of Euro 120 on March 1, 2019. Only the br incorporation expenses incurred by the holding company are considered in consolidated financials statement.TatvaChintan Pharma Chem Private Limited, together with its subsidiary, is herein after referred to as 'the Group'.The group is engaged in manufacturing and selling of quaternary compounds, bulk drugs and specialty chemicals during the year. II. SIGNIFICANT ACCOUNTING POLICIES:1. Basis of Preparation of Consolidated Financial Statements:The financial statements are brpared under the historical cost convention following the going concern concept and on accrual basis of accounting, in conformity with the accounting principles generally accepted in India and comply with the accounting standard referred to in Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rule, 2014.The company is Non Small and Medium Sized Company as defined in the General Instructions in respect of Accounting Standards notified under the Companies Act, 2013. Accordingly, the company has complied with the Accounting Standard as applicable to Non Small and Medium Sized Company.2. Use ofEstimates:The brparation of consolidated financial statements requires the management of the Holding Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Examples of such estimates include provisions for doubtful receivables, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred, the useful lives of debrciable fixed assets and provision for impairment. Future results could differ due to changes in these estimates and the difference between the actual result and the estimates are recognised in the period in which the results are known to materialise.3. Principles of Consolidation: The consolidated financial statements have been brpared on the following basis:The financial statements of the holding company and wholly owned subsidiary company have been consolidated on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra group balances/ transactions and resulting unrealized profits in full. Unrealized losses resulting from intra-group transactions have also been eliminated except to the extent that recoverable value of related assets is lower than their cost to the group.Transactions relating to statement of profit and loss of the acquired entities have been included in the consolidated statement of profit and loss from the effective date of acquisition on proportionate basis assuming that profits / losses have accrued evenly throughout the year.The consolidated financial statements are brsented, to the extent possible, in the same format as that adopted by the holding company for its separate financial statements.The consolidated financial statements are brpared using uniform accounting policies for like transactions and other events in similar circumstances except for differences disclosed in financial statements.The financial statements of the holding company and wholly owned subsidiary company used in the consolidation are drawn up to the same reporting date as of the Holding Company i.e. year ended 31 March 2019.4. Cash Flow Statement:Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the group are segregated.5. Inventories:Raw material, packaging material, stores and spare parts are carried at cost or net realisable value, whichever is lower. Cost includes purchase price excluding taxes those are subsequently recoverable by the Company from the concerned authorities, freight inwards and other expenditure incurred in bringing such inventories to their brsent location and condition. Cost of inventories is determined using the FIFO cost method. Finished goods and work in progress are also valued at the lower of cost and net realizable value. Cost of work in progress and manufactured finished goods is determined on FIFO basis and comprises cost of direct material, cost of conversion and other costs incurred in bringing these inventories to their brsent location and condition.6. Property, Plant &Equipments:Property, plant and equipment are stated at cost, less accumulated debrciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management. The group debrciates property, plant and equipment over their estimated useful lives as stated in Schedule II of the Companies Act, 2013 using the straight-line method.Debrciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.In accordance with Schedule II, the Property, plant and equipment is shown at Residual Value where the life of assets exhausted as at balance sheet date.Additions to the Property, plant and equipment have been accounted for on the date of installation and its use, irrespective of the date of invoice.The Cost of replacing part of an item of property, plant and equipment is recognizedin the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the group and its can be measured reliably. The Carrying amount of the replaced part is de-recognized. The Costs of the day-to-day servicing of property, plant and equipment are recognized in the Statement of Profit and Loss.Spares which can be used only in connection with a specific item of plant and where its use is expected to be irregular are capitalized if expected to be used for more than one year.The cost of the fixed asset not ready for its intended use on such date is disclosed under capital work-in- progress.Company has six lease hold lands, amortization of which is made on the basis of lease period. Details of such lease hold lands are as under: Particulars Annual Rent Lease Rent Lease Beginning Lease End(1) GIDC Ankleshwar Plot No. 502/17 - 230047 15-08-1996 27-03-2091 Plot no. 502/8 - 245034 30-09-2000 20-12-2091 Plot No. 502/18 - 320525 26-08-2003 11-08-2102(2) Dahej SEZ Plot no. Z/103/F/1 20,098 24469617 06-07-2015 16-11-2041 Plot no. Z/103/F/2 31,724 45727968 02-12-2016 16-11-2041(3) GIDC Vadodara Plot no. 353 - 54662537 08-06-2017 22-12-20737. Intangible Assets:Items of assets which meet the definition of intangible assets and where it is probable that future economic benefit will flow to the group and its cost can be measured reliably, are initially and subsequently recognized at cost of acquisition or development less accumulated amortization and impairment, if any. Intangibles assets acquired separately are measured at cost which comprise of purchase price, freight, duties,non-refundable taxes other incidental expenses directly attributable to bringing the assets to its working condition for intended use. Internally generated intangible assets, excluding development costs, that does not meet the criteria of recognition, are not capitalized but expensed out, and expenditure is reflected in the Statement of Profit and Loss in the year in which the expenditure is incurred. Internally generated goodwill is not recognized.Intangibles assets are being amortized on straight line basis method based on the estimated useful life as brscribed in AS-26.The useful life is being reviewed once in a year.8. Revenue Recognition:Revenue from Sale of Goods is recognized only when risks and rewards incidental to ownership are transferred to the customer & can be reliably measured and it is reasonable to expect ultimate collection.Revenue from Export is recognized when the delivery of goods is physically given to customer authorities.Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable.Dividend Income is accounted for as income when the right to receive dividend is established.Other Income, specifically not stated otherwise, is recognized on accrual basis.Expenses, specifically not stated otherwise, are accounted on accrual basis.9. Impairment of Assets:The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired.An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is the higher of the asset's net selling price and value in use, which means the brsent value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss for an asset other than goodwill is reversed if and only if, the reversal can be related objectively to an event occurring after the impairment loss was recognized. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or debrciation) had no impairment loss been recognized for the asset in prior years.10. Borrowing Costs:Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use or where out of general borrowings, funds may have been used, the borrowing cost is calculated by applying weighted average cost of borrowing applicable to such general borrowing which is outstanding during the year, are capitalized up to the date by which qualifying assets are ready for its intended use and included in the carrying amount of such assets.All other borrowing costs are charged to statement of Profit and Loss.11. Provision for Current and Deferred Tax:Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed debrciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same. Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.12. EmployeeBenefits:Provident Fund is a defined contribution scheme and the contributions as required by the statute are charged to the Statement of Profit and Loss as incurred.The group has recognized the liability for future gratuity benefits to be passed to the employees.The undiscounted amount of short-term employee benefits that are expected to be paid in exchange for services rendered by an employee is recognized during the period/year when the employee renders the services.13. Accounting for Provisions and Contingent Liabilities:A provision is recognized if, as a result of a past event, the group has a brsent legal obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.14. Foreign Currency Transactions:Income and expense in foreign currencies are converted at exchange rates brvailing on the date of the transaction. Foreign currency monetary assets and liabilities which are denominated in foreign currency are translated at the exchange rate brvailing on the balance sheet date and exchange gains and losses are recognised in the statement of profit and loss. Non-monetary foreign currency items are recognized and carried at the rate as on the date of transaction unless carried at fair value,in which case it is stated or valued at closing rate.Any profit or loss arising on cancellation,maturity or renewal of forward exchange contracts is recognized as income or expenses in the statement of profit & loss of the year and included in Exchange Difference.Premium or discount on foreign exchange forward, options and futures contracts are amortised and recognised in the statement of profit and loss over the period of the contract. Foreign exchange forward, options and future contracts outstanding at the balance sheet date, other than designated cash flow hedges, are stated at fair values and any gains or losses are recognised in the statement of profit and loss.Gains and losses on account of foreign exchange fluctuation in respect of liabilities in foreign currencies specific to acquisition of property, plant and equipmentsin foreign currency are recognized as income and expense in profit and loss account.15. Earning Per Share:Basic earning per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period brsented. The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods brsented for any share splits and bonus share issues including changes effected prior to the approval of the financial statements by the Board of Directors.16. Investments:(i) Investment Properties:Land & Building held with the intent to let out or capital apbrciation has been classified as Investment Property under 'Property, Plant and Equipment' and the debrciation on such assets is provided on written down value method over its useful life as per Schedule II of the Companies Act, 2013.(ii) Other Investments:Investments are classified into non-current investments and current investments based on intent of managements at the time of making the investments which are intended to be held for more than one year are classified as non-current and those which are intended to be held for less one year are classified as current investments. |