Chemcrux Enterprises Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2018

5. Notes Forming Part of the Balance Sheet and Statement of Profit and Loss annexed thereto:

1. General Information of the Company:

Chemcrux Enterprises Limited (“the company”) was incorporated in April 1996 to undertake the business of manufacturing or processing of Bulk Drug Intermediates like Para Chloro Benzoic, Ortho Benzoic Acid, and Lasamide etc.

The Company started its business activities in the year 2000-01 by taking over the running business of M/s. Chemcrux, a partnership firm of the promoters, as a going concern. The Company made its Initial Public Offering in March, 2017. The Company was listed on the Bombay Stock Exchange (SME).

2 . Significant Accounting Policies:

I. Basis of Accounting:

The accounts of the Company are prepared under the Historical Cost Convention and using the accrual method of accounting unless otherwise stated hereinafter, in accordance with the provisions of Companies Act, 2013(''the Act”) to comply in all material aspects, with the mandatory accounting standards specified u/s. 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014 in conformity with accounting principles generally accepted in India. Accounting Policies, not specifically referred to, are consistent and in consonance with generally accepted accounting principles.

II. Use of Estimates:

The Preparation and Presentation of Financial Statements as per the above bases required the management to make estimates and assumptions that may affect the balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the balance sheet and the reported amounts of incomes and expenses during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from those estimated.

III. Fixed Assets & Depreciation :

Tangible Assets are stated at cost, net of tax / duty credits availed, if any, wherever applicable, less accumulated depreciation/ impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.

Intangible assets are stated at cost or acquisition less accumulated amortization and impairment loss, if any. Intangible assets are recognized only if it is probable that the expected future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. Capital work-in-progress comprises of the cost of assets that are not ready for their intended use at the reporting date.

IV. Depreciation

Depreciation on assets is being provided on the Straight Line Method on the basis of useful lives specified in Part C of Schedule II to the Companies Act, 2013. Depreciation on additions during the year as well as in case of assets sold during the year has been provided pro-rata on the basis of number of days for which the asset was used during the year Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the company for its use.

V. Inventories:

Raw Materials are valued ''at Cost'' on FIFO basis. ''Cost'' includes all duties, taxes and other expenses incurred to bring the inventories to their present location and condition. Finished products are valued at lower of cost and net realizable value. Semi-Finished Goods have been valued at Raw Material cost increased by a proportion of overheads and semi-finished goods of job work valued at cost of own raw materials involved in the process increased by overheads in consonance with the stage of completion as certified by the management.

VI. Employee Benefits:

Short term Employees Benefits:

All employee benefits payable wholly within 12 months after the end of period in which the employees render the related services are classified as short term employee benefits and recognized as expenses in the period in which the employees rendered the related services. The company recognizes the undiscounted amount of short term employees benefits expected to be paid (including compensated absences) in exchange for services rendered, as a liability.

ii) Post-employment benefits:

a) Defined contribution plans: the company''s contribution under the employees'' provident fund scheme, general Labor welfare fund scheme and employees'' state insurance scheme are defined contribution plans. The contribution paid / payable under the schemes is recognized during the period in which the employees rendered the related services.

b) Defined Benefits Plans: The employees'' gratuity fund scheme is Company''s defined benefit plan. The Company has taken Group Gratuity Policy for future payment of gratuity. The present value of the obligation under this defined benefit plan is determined based on the Actuarial Valuation Certificate. Company has made provision for gratuity in the books of account on the basis of actuarial valuation carried out by an independent actuary at the balance sheet date.

The Company has obtained the Actuarial Valuation Certificate for leave encashment and made the required provision in the books of accounts.

VII. Revenue Recognition:

Revenue is recognized on transfer of property in goods or on transfer of significant risks and rewards of ownership to the buyer, for a consideration, without the seller retaining any effective control over the goods.

Export sales are accounted at their CIF value based on the actual realization in Indian Rupees according to the realization certificates of the Banks

Other items of income such as Interest, Claims etc are accounted on accrual basis (depending on certainty of realization) and disclosed under the head “Other Income”

VIII. Foreign Currency Transactions:

i) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

ii) Monetary items denominated in foreign currencies at the year-end are restated at the year-end rates.

iii) In case of Forward Foreign Exchange Contracts, the difference between the year-end rate and the rate on the date of the contract is recognized as exchange difference.

iv) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

IX. Borrowing Costs:

According to AS-16, borrowing costs that are directly attributable to the acquisition of qualifying assets are to be capitalized for the period until the asset is ready for its intended use. A qualifying asset being, an asset that necessarily takes a substantial period of time to get ready for its intended use. Other borrowing costs are to be recognized as an expense in the period in which they are incurred.

X. Investments:

Investments that are readily realizable and intended to be held for not more than one year from the date on which such investments are made, classified as Current Investments. All other investments are classified as Non-current Investments. Current investments are carried at lower of cost and fair value. Non-current investments are carried at the cost.

However, provision for diminution is made to recognize a decline, other than temporary in the value of Non-current Investments, such reduction being determined and made for each Investment individually.

XI. Taxes on Income:

Provision for Current tax is made, based on tax estimated to be payable as computed under the various provisions of the Income Tax Act, 1961.

Deferred tax is recognized, subject to prudence, on timing differences between taxable income and accounting income that originate during the year and are capable of being reversed in one or more subsequent periods. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that future taxable income will be available against which such deferred tax assets can be realized. Deferred Tax Liabilities / Assets are quantified using the tax rates and tax laws enacted or substantively enacted as on the balance sheet date.

XII. Contingencies/Provisions:

Provisions requiring a substantial degree of estimation in measurement are recognized, if in the opinion of the Management, there is a probability that a present obligation as a result of past events will result in an outflow for the Company in the future. Contingencies, the outcome of which is not certain, have been disclosed in these notes as Contingent Liabilities. Contingent Assets are neither recognized nor disclosed in the financial statements. A provision is recognize when the company has a present obligation as a result of the past events and it is probable that an outflow of resource will be required to settle the obligation in respect of which a reliable estimate can be made.

XIII. Impairment of Assets:

Assessment of Impairment of Assets (as covered under AS-28 Impairment of Assets) is done as at the Balance Sheet Date considering external and internal impairment indicators. If there is an indication that an asset may be impaired, its recoverable amount is estimated and the impairment loss duly provided for.

XIV. Earnings per share:

Basic earnings per share is computed by dividing the net profit or loss for the period attributable to shareholders by the total number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential Equity Shares.

(d) The Company has a single class of equity shares having par value of Rs. 10/- per equity share. All shares rank pari passu with refrence to all rights relating thereto. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all the preferential amounts, in proportions to their shareholding.

(f) The Board of Directors, in its meeting held on May 29,2018 have proposed a Final Dividend of 2.5% i.e Rs.0.25 per equity share for the Financial Year ended 31st March, 2018. The said proposal is subject to the approval of the shareholders at the Annual General Meeting to be held on 27/09/ 2018 and if approved would result in a Cash Outflow of Rs 14,85,327 approximately including Corporate Dividend Tax.

(c) The Company has paid dividend for FY 2016-17 in current year amounting to Rs. 12,34,070 and Rs. 6000is representing the amount of unpaid dividend as on 31^st March, 2018.

* Sundry Creditors are as per books and have not been corroborated by circulation / confirmation of balances. ** Sundry Creditors for Raw Materials do not include any amount outstanding to Micro & Small Enterprises. The above information has been compiled in respect of parties to the extent they could be identified as Micro and Small Enterprises on the basis of information collected and available with the Company and same has been relied upon by the auditors regarding Other Sundry Creditors, the Company does not have information regarding their status as Micro & Small Enterprises

The Company deals with various Micro and Small Enterprises on mutually accepted terms and conditions. Accordingly, no interest is payable if the terms are adhered to by the Company. Consequently, no interest has been paid or is due and no provision for interest payable to such units is required or has been made under Micro, Small and Medium Enterprises Development Act, 2006.