J. G. CHEMICALS PRIVATE LIMITED
CIN: U24100WB2001PTC093380
Notes to the consolidated financial statements for the year ended March 31, 2018
1	SIGNIFICANT ACCOUNTING POLICIES
1.1	Basis of Preparation of Financial Statements
(i)	Principles of Consolidation
	The Consolidated Financial Statements include the financial statements of JG Chemical Limited and its subsidiaries (the Group). The Consolidated Financial Statements of the group have been brpared in accordance with Accounting Standard - 21 'Consolidated Financial Statements' issued by The Institute of Chartered Accountants of India ('ICAI') and notified pursuant to Companies (Accounting Standard) Rules, 2006. The Consolidated financial statement have been brpared using uniform accounting policies for like transactions and other events in similar circumtances and are brsented to the extent possible in the same manner as the Company's standalone financial statements, except method of valuation of Inventories: Method of valuation of inventories adopted by Holding Company - Weighted average basis, whereas the method of valuation of inventories adopted by Subsidiary Company - FIFO basis.
	The Consolidated Financial Statements relate to J. G. Chemicals Private Limited (the Company) and its subsidiaries. The details are as given below:
	Name of Companies	Country of Incorporation/ Formation	Percentage of voting power/ Profit sharing as at 31st March, 2018	Percentage of voting power/ Profit sharing as at 31st March, 2017
	Subsidiaries
	BDJ Oxides Private Limited	India		75.30%			75.30%
(a)	Consolidated Financial Statements normally include Consolidated Balance Sheet, Consolidated Statement of Profit & Loss, Consolidated Statement of Cash Flows and the notes to the Consolidated Financial Statements that form an integral part thereof. The Consolidated Financial Statements are brsented, to the extent possible, in the same format as that adopted by the parent for Standalone Financial Statements.
(b)	The Consolidated Financial Statements have been combined on a line-by-line basis by adding the book value of like items of assets, liabilities, income & expenses after eliminating inter-group balances / transactions and resulting elimination of unrealised profits in full. The amount shown in respect of reserve comprise the amount of the relevant reserves as per the balance sheet of the parent company and its share in the post acquisition increase in the relevant reserves of the entity to be consolidated.
(c)	The difference between the costs of investment and the share of net assets at the time of acquisition of shares in the subsidiary, is identified in the Consolidated Financial Statements as Goodwill or Capital Reserves, as the case may be.
(d)	Minority Interest rebrsents the amount of equity to be attributable to minority shareholders at the date on which investment in subsidiary is made and its share of movements in equity since that date.
(e)	Notes to the Consolidated Financial Statements rebrsents notes involving items which are considered material and are accordingly duly disclosed. Materiality for the purpose is assessed in relation to the information contained in the Consolidated Financial Statements. Further, additional statutory information disclosed in the separate Financial Statements of the subsidiary and / or the parent having no bearing on the true and fair view of the Consolidated Financial Statements have not been disclosed in the Consolidated Financial Statements.
(f)	Investments other than in subsidiaries have been accounted as per AS-13 on “Accounting for Investments”.
(ii)	USE OF ESTIMATES
	The brparation of financial statements in conformity with generally accepted accounting principle requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognised in the period in which the results are known/materialized.
(iii)	TANGIBLE AND INTANGIBLE FIXED ASSETS AND DEbrCIATION/ AMORTISATION
	Property, Plant and Equipment (PPE)
(a)	Recognition
	Property, plant and equipment are stated at cost of acquisition or construction and subsequent improvements thereto less accumulated debrciation and impairment losses, if any. Cost of acquisition includes inward freight, duties and taxes (net of cenvat availed), dismantling cost and installation expenses etc incurred up to the installation of the assets.
	The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement when incurred. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell. The Company has adopted cost model as brscribed under Accounting Standard (AS) 10: Property, Plant and Equipment in respect of all classes of assets. In respect of revalued assets the difference between written down value of assets and valuation is transferred to Revaluation Reserve.
(b)	Debrciation
	Debrciation on property, plant and equipment is provided to the extent of debrciable amount on the written down value. Debrciation is provided based on useful economic life of the assets as brscribed in Schedule II to the Companies Act, 2013.
(iv)	IMPAIRMENT OF ASSETS
	Impairment is ascertained at each Balance Sheet date in respect of cash generating units. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is the higher of an asset’s net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
(v)	CAPITAL WORK-IN-PROGRESS
	Capital work-in-progress under development are carried at cost, comprising direct cost, related incidental expenses and attributable borrowing cost.
(vi)	INTANGIBLE ASSETS
	Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and impairment loss, if any. Such assets are amortised on written down value method over the useful economic life of the respective assets and in the manner brscribed in Schedule II to the Companies Act, 2013.
(vii)	GOVERNMENT GRANTS
	Government Grants related to PPE are adjusted with the value of the PPE/credited to Capital Reserve. Government Grants related to revenue items are adjusted with the related expenditure/taken as income. Such grants are accounted for as and when in the views of the management the ultimate realisability of the same is established.
(viii)	INVENTORIES
	Inventories are valued at lower of cost or net realizable value. Cost of inventories is considered on ‘weighted average’ basis by holding company and 'FIFO basis' by subsidiary company. Materials and other supplies held for use in the production of inventories are not written down below cost if the finished products, in which these are to be used, are expected to be sold at or above cost. Cost in respect of raw materials and stores and spares includes expenses incidental to procurement of the same. Cost in respect of finished goods rebrsents prime cost and includes appropriate portion of overheads.
(ix)	REVENUE RECOGNITION
	Sale of Goods
	Sales are recognised when substantial risk and rewards of ownership are transferred to customer. In case of domestic sales, when goods are dispatched or delivery in handed over to customer’s logistics and in case of export sales, when goods are shipped on-board based on bill of lading.
	Export Incentive accounted on the basis of accrual.
	Other Income
	Other Income is accounted on accrual basis except where the receipt of income is uncertain.
(x)	EMPLOYEE BENEFITS
	Employee benefits are accrued in the year in which services are rendered by the employees. Short term employee benefits are recognised as an expenses in the statement of profit and loss for the year in which the related service is rendered.
	Contribution to defined contribution schemes such as Provident Fund, Superannuation Fund etc. are recognised as and when incurred.
(xi)	FOREIGN CURRENCY TRANSACTIONS
	Income and Expenditure in foreign currency is converted into rupee at the rate of exchange brvailing on the date of transaction. Realised gains and losses on foreign exchange transactions in the year are recognised in the Statement of Profit and Loss. Foreign currency monetary assets and liabilities at the year end are translated using the closing exchange rates and the resultant exchange difference is recognised in the Statement of Profit and Loss. In the case of acquisition of fixed assets, the exchange differences are adjusted to the cost of respective fixed assets.
(xii)	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 intended use. All other borrowing costs are charged to revenue.
(xiii)	INVESTMENTS
	Long-term Investments are stated at cost. Provision is made for diminution in the value of the investments, if in the opinion of the management the same is considered to be other than temporary in nature. Current investments are carried at lower of cost and fair value determined on an individual basis.
(xiv)	DERIVATIVE INSTRUMENT AND COMMODITY HEDGE TRANSACTION
	The Company uses derivative futures contracts to hedge its risks associated with Raw material and forecasted transactions. In respect of derivative contracts, brmium paid, gains/losses on settlement and losses on restatement are recognised in the Statement of Profit and Loss. In respect of unsettled derivative contracts as at the Balance Sheet date, Mark-To-Market margin paid if any, in respect of the said contracts is charged to the Statement of Profit & Loss, but if such Mark-To-Market margin is received the same is not taken to the credit of Statement of Profit & Loss but is shown as Current Liability.
(xv)	TAXATION
	Tax expense for the period, comprising current tax and deferred tax, is included in the determination of the net profit or loss for the period. Provision is made for current tax based on tax liability computed in accordance with relevant tax rates and tax laws. Deferred Taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted at the reporting date. Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets including the unrecognized deferred tax assets, if any, at each reporting date, are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which deferred tax assets can be realized.
(xvi)	PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
	Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered probable and in respect of which a reliable estimate can be made. Contingent liabilities are shown by way of Notes to the Financial Statements in respect of obligations, where, based on the evidence available, their existence at the Balance Sheet date is considered not probable or a reliable estimate of the same cannot be made. Contingent Assets are neither recognised nor disclosed in the Financial Statements.
(xvii)	EARNINGS PER SHARE
	Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The net profit or loss for the period attributable to ordinary shareholders is the net profit or loss for the period after deducting brference dividends and any attributable tax thereto for the period. The weighted average number of ordinary shares is the number of ordinary shares outstanding at the beginning of the period, adjusted by the number of ordinary shares bought back or issued during the period multiplied by the time-weighing factor.