Basis of Preparation:
The financial statements have been prepared to comply in all material
respects with the notified accounting standard by Companies (Accounting
Standards) Rules, 2006, (as amended) and the relevant provisions of the
Companies Act, 1956.The financial statements are prepared under the
historical cost convention, on the accrual basis. The accounting
policies have been consistently applied by the Company and are
consistent with those used in the previous year.
Use of estimates:
The preparation 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
period end. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
a) Fixed Assets / Intangibles:
Fixed Assets / Intangibles are stated at cost (net of cenvat credit if
availed) less accumulated depreciation and impairment losses, if any.
The Company capitalises all cost relating to the acquisition and
installation of fixed assets. The carrying amounts are reviewed at each
balance sheet date when required to assess whether they are recorded in
excess of their recoverable amounts, and where carrying values exceed
this estimated recoverable amount, assets are written down to their
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
Crop Protection Division
Inventories of raw materials, packing materials, work-in-process and
finished goods are valued at standard cost adjusted for variances,
which approximate actual cost based on weighted Average cost formula or
net realisable value, whichever is lower. Cost of work-in-process and
finished goods include materials, labour and manufacturing overheads.
Stores and spare parts are valued at moving weighted average cost. The
company accrues for excise duty liability in respect of inventories of
Inventories except stores and spare parts which are valued at moving
weighted average cost are valued at lower of annual weighted average
cost and net realizable value. Cost of work in progress and finished
goods include material, labour, and manufacturing overheads.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale
e) Foreign currency transactions:
(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
Foreign currency monetary items are reported using the closing rate.
(iii) Exchange Differences
Exchange differences arising on the settlement of monetary items or on
reporting such monetary items of company at rates different from those
at which they were initially recorded during the year, or reported in
previous financial statements, are recognized as income or as expenses
in the year in which they arise.
(iv) Forward Exchange Contracts not intended for trading or speculation
The premium or discount arising at the inception of forward exchange
contracts not intended for trading or speculation purposes is amortised
as expense or income over the life of the contract. Exchange
differences on such contracts are recognized in the statement of profit
and loss in the year in which the exchange rates change. Any profit or
loss arising on cancellation or renewal of forward exchange contract is
recognized as income or as expenses for the year.
f) Revenue recognition:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
The Company recognises sale of goods when the significant risks and
rewards of ownership are transferred to the buyer, which is usually
when the goods are dispatched to customers or delivered to carrier in
case of export sales. Sales comprise amounts invoiced for goods sold
inclusive of excise duty, but net of sales tax, returns, trade
discounts and sales rebate.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
g) Retirement benefits:
Retirement benefit in the form of Provident Fund is a defined benefit
scheme and the contributions are charged to the Profit and Loss Account
of the year when the contributions to the respective funds are due.
There are no other obligations other than the contribution payable to
the respective trusts.
Gratuity liability and Post Retirement Benefit liability in form of
pension and medical benefit are defined benefit obligations and
provided for on the basis of an actuarial valuation made at the end of
each financial year.
Long term compensated absences are provided for based on actuarial
valuation at the year end. The Actuarial Valuation is done as per
Project Unit Credit method.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
Payments made under the Voluntary Retirement Scheme are charged to the
Profit and Loss account immediately.
h) Research and Development (R & D):
Capital expenditure on R & D is treated in the same way as expenditure
on Fixed Assets. Revenue expenditure is charged to revenue under the
respective heads of expenses.
i) Excise /Customs duty:
Excise duty on finished goods and customs duty on imported materials
are accounted on production of packed finished goods/receipt of
material in customs bonded warehouses.
j) Income Tax:
Tax expense comprises of current, deferred and fringe benefit tax.
Current income tax and fringe benefit tax is measured at the amount
expected to be paid to the tax authorities in accordance with the
Income- tax Act, 1961 enacted in India. Deferred income taxes reflects
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 is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
At each balance sheet date the Company re-assesses unrecognised
deferred tax assets. It recognises unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
k) Borrowing Costs:
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as a
part of the cost of that asset. All Other borrowing costs are
recognized as an expense in the year in which they are incurred.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
I) Provisions and contingent liabilities:
A provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
its present value and are determined based on management estimate
required to settle the obligation at the balance sheet date. These are
reviewed at each balance sheet date and adjusted to reflect the current
Contingent liabilities are disclosed when the company has a possible
obligation and it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation.
Provision for site restoration cost is based on periodic assessment of
operational risks. The company has made provision for production site
improvement and restoration costs. Provision for these costs has been
made in the expectation that such restoration work will be required in
future and the cost can be reasonably estimated. The costs are based on
currently available facts with respect to technology and relevant
Company is the lessee
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
Company is the lessor
Assets subject to operating leases are included in fixed assets. Lease
income is recognised in the Profit and Loss Account on a straight-line
basis over the lease term. Costs, including depreciation are recognised
as an expense in the Profit and Loss Account. Initial direct costs such
as legal costs, brokerage costs, etc. are recognised immediately in the
Profit and Loss Account.
n) Cash and Cash equivalents:
Cash and cash equivalents in the balance sheet comprises of cash at
bank and in hand and short term investments with an original maturity
of three months or less.
o) Earnings per Share:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting attributable taxes) by the weighted average number of equity
shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
p) Segment Reporting Policies:
Identification of segments:
The Companys operating businesses are organized and managed separately
according to the nature of products provided, with each segment
representing a strategic business unit that offers different products
and serves different markets. The analysis of geographical segments is
based on the areas in which major operating divisions of the Company
Inter segment Transfers:
The Company generally accounts for inter segment sales and transfers on
Allocation of common costs:
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Includes general corporate income and expense items which are not
allocated to any business segment.
The company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the company as a whole.