Accounting Policies of Advance Petrochemicals Ltd. Company

Mar 31, 2024

2. Significant Accounting Policies

2.1 Basis of Preparation

The financial statements have been prepared with all material aspect with Indian Accounting Standards
(Ind AS) notified under section 133 of the companies Act, 2013 (the Act) read with the Companies
(Indian Accounting standards ) Rules, 2015 and other relevant provisions of the Act. The Accounting
Policies adopted in the preparation of the financial statements are consistent with those followed in the
previous year.

2.2 Historical Cost Convention

The financial statements have been prepared on a historical cost basis.

2.3 Rounding of amounts

The financial statements are presented in INR and all values are rounded to the nearest rupees.

2.4. Summary of Significant Accounting Policies

The following are the significant accounting policies applied by the Company in preparing its financial
statements consistently to all the periods.

2.5. Current versus non-current classification

The Company presents assets and liabilities in the Balance Sheet based on current/non-current
classification.

An asset is current when it is:

• Expected to be realized or intended to be sold or consumed in the normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realized within twelve months after the reporting period; or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in the normal operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the reporting period; or

• There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Operating cycle

Operating cycle of the Company is the time between the acquisition of assets for processing and their
realization in cash or cash equivalents. As the Company’s normal operating cycle is not clearly
identifiable, it is assumed to be twelve months.

2.6. Use of estimates and judgments

The estimates and judgments used in the preparation of the financial statements are continuously
evaluated by the Company and are based on historical experience and various other assumptions and
factors (including expectations of future events) that the Company believes to be reasonable under the
existing circumstances. Difference between actual results and estimates are recognized in the period in
which the results are known / materialized.

The said estimates are based on the facts and events, that existed as at the reporting date, or that
occurred after that date but provide additional evidence about conditions existing as at the reporting
date.

2.7. Foreign currencies

The Company’s financial statements are presented in INR, which is also the Company’s functional and
presentation currency.

Transactions and balances

Transactions in foreign currencies are initially recorded by theCompany’s functional currency spot
rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional
currency spot rates of exchange at the reporting date. Differences arising on settlement of such
transaction and on translation of monetary assets and liabilities denominated in foreign currencies at
year end exchange rate are recognized in profit or loss.

2.8. Impairment of assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of
impairment of the carrying amounts of the Company''s assets. If any indication exists, an asset’s
recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of
an asset exceeds its recoverable amount.

2.9. Property, plant and equipment

Property, plant and equipment are stated at historical cost, net of accumulated depreciation and
accumulated impairment losses, if any. When significant parts of Property, plant and equipment are
required to be replaced at intervals, theCompany recognizes such parts as individual assets with specific
useful lives and depreciates them accordingly. Likewise, when a major inspection is performed, its cost
is recognized in the carrying amount of the plant and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Borrowing cost relating to acquisition / construction of fixed assets which take substantial period of
time to get ready for its intended use are also included to the extent they relate to the period till such
assets are ready to be put to use.

Capital work-in-progress comprises cost of fixed assets that are not yet installed and ready for their
intended use at the balance sheet date.

Other Intangible Assets

Intangible assets acquired separately are measured on initial recognition at historical cost. Intangibles
assets have a finite life and are subsequently carried at cost less any accumulated amortization and
accumulated impairment losses if any.

Intangible assets with finite lives are amortized over the useful life and assessed for impairment
whenever there isan indication that the intangible asset may be impaired. The amortization period and
the amortization method for anintangible asset with a finite useful life are reviewed at least at the end
of each reporting period. Changes in theexpected useful life or the expected pattern of consumption of
future economic benefits embodied in the asset areconsidered to modify the amortization period or
method, as appropriate, and are treated as changes in accounting Estimates. The amortization expense
on intangible assets with finite lives is recognized in the statement of profit andloss unless such
expenditure forms part of carrying value of another asset.

Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the netdisposal proceeds and the carrying amount of the asset and are recognized in the
statement of profit or loss when the asset is derecognized.

Estimated useful life

Assets Estimated Useful life

Software 5 Years

Derecognition

An item of property, plant and equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on DE recognition of the
asset(calculated as the difference between the net disposal proceeds and the carrying amount of the
asset) is included in the Statement ofProfit and Loss when the asset is derecognized.

Depreciation

Depreciation on property, other than Plant & Machinery is calculated on the basis of Written down
Value Method. In case of Plant & Machinery, depreciation is provided on Straight Line Method (SLM)

basis. The depreciation on Property, Plant and Equipment are calculated as per Schedule II of
Companies Act 2013.

Depreciation on property, Plant and Equipment purchased/sold during a period is proportionately
charged for the period of use.

The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.

2.10 Financial assets

Initial recognition and measurement:

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date
basis.

Subsequent measurement:

All recognized financial assets are subsequently measured in their entirety at either amortized cost or
fair value, depending on the classification of the financial assets.

Classification of financial assets:

Financial assets that meet the following conditions are subsequently measured at amortized cost
(except for debt instruments that are designated as at fair value through profit or loss on initial
recognition):

• The asset is held within a business model whose objective is to hold assets in order to
collect contractual cash flows; and

• The contractual terms of the instrument give rise on specified dates to cash flows that are
solely payments of principal and interest.

All other financial asset is subsequently measured at fair value.

Financial assets at cost:

Investments in subsidiaries, associates and joint ventures are accounted for at cost.

Derecognition of financial assets:

The Company derecognizes a financial asset when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party.

On derecognition of a financial asset in its entirely, the difference between the asset’s carrying amount
and the sum of the consideration received / receivable and the cumulative gain or loss that had been
recognized in other comprehensive income and accumulated in equity is recognized in profit or loss if
such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial
asset.

2.11. Financial liabilities and equity instruments
Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds
received, net of direct issue costs.

Trade and other payables are recognized at the transaction cost, which is its fair value, and
subsequently measured at amortized cost.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are
discharged, cancelled or have expired. An exchange between with a lender of debt instruments with
substantially different terms is accounted for as an extinguishment of the original financial liability and
the recognition of a new financial liability. Similarly, a substantial modification of the terms of an
existing financial liability is accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability. The difference between the carrying amount of the financial
liability derecognized and the consideration paid and payable is recognized in profit or loss.

2.12 Inventories

Inventories are valued at lower of cost or net realizable value .Cost comprises of cost of Purchases,
cost of conversion and other costs incurred in bringing the inventories to their present location and
condition. Cost is determined on First-in-First-out (FIFO) basis. Net realizable value is the estimated
selling price in the ordinary course of business, less estimated costs of completion and the estimated
costs necessary to make the sale.

2.13. Cash and cash equivalent

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in
value.

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Mar 31, 2015

1 Basis of Accounting

The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 2013, accounting principles generally accepted in India and Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI) to the extent applicable.

2 Revenue Recognition

a) Sales including export sales and trading sales are recognized when goods are dispatched from the factory and are recorded at net of shortages, claims settled, rate differences, rebate allowed to customers.

b) Export Sales are booked at the rate on the date of transaction and the resultant gain or loss on realization or on translation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt with in the statement of Profit and Loss Account.

3 Fixed Assets and Depreciation

Fixed assets, other than Plant & Machinery, are valued and stated at cost less accumulated depreciation calculated on the basis of Written Down Value Method In case of Plant & Machinery, depreciation has been provided on Straight Line Method (SLM) basis. The Fixed Assets being Vehicles purchased during the current financial year has been depreciated on Straight Line Method.

Consequent to the enactment of Companies Act, 2013 and the applicability of accounting period commencing from 1st April, 2014, the company has reassessed the remaining useful life of fixed assets in accordance with the provisions prescribed under Schedule II of the Act. In case of assets which have completed their useful life, the carrying value (net of residual value) as at 1st April, 2014 amounting to Rs.92,618/- has been adjusted to Retained Earnings and Rs 41,416/- has been adjusted against Differed Tax Liability. and in case of other assets the carrying value (net of residual value) is being depreciated over the remaining useful life.

The Depreciation and Amortization Expenses charge for the year ended 31st March, 2015 would have be higher by Rs 43,026/- , had the company continued with the previous assessment of useful life of such assets.

4 Inventories

Inventories of Raw Materials, , Packing material are stated at Cost, Finished goods are stated at Cost or Net Realizable Value whichever is lower, Coal, Goods in process, Stores and Spares, as certified and Valued by Management. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costing formula used is First-in-First-out (FIFO).

5 Investments

Investments are classified as Long Term Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognize a decline, if any other than temporary in nature.

6 Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosure of an item or information in the financial statements has been made relying on these estimates.

7 Impairment of Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company's assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use.

8 Employee Benefits

a) Short term employee benefits are recognized as an expense at undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Profit & Loss Account in the year of payment.

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Mar 31, 2014

1 Basis of Accounting

The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, accounting principles generally accepted in India and Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI) to the extent applicable.

2 Revenue Recognition

a) Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded at net of shortages, claims settled, rate differences, rebate allowed to customers.

b) Export Sales are booked at the rate on the date of transaction and the resultant gain or loss on realisation or on translation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt with in the statement of Profit and Loss Account.

3 Fixed Assets and Depreciation

Fixed assets, other than Plant & Machinery, are valued and stated at cost less accumulated depreciation calculated on the basis of Written Down Value Method on prorata basis and at the rates prescribed in Schedule XIV to the Companies Act, 1956. In case of Plant & Machinery, depreciation has been provided on Straight Line Method (SLM) basis. Depreciation of Rs. 78256/- has been debited to Revaluation Reserve Account out of total depreciation of Rs. 14,06,298/-.

4 Inventories

Inventories of Raw Materials, Stores and Spares, Packing material, Coal, Goods in process and Finished goods are stated at Cost or Net Realisable Value whichever is lower, as certified by Management. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costing formula used is First-in-First-out (FIFO).

5 Investments

Investments are classified as Long Term Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

6 Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosure of an item or information in the financial statements has been made relying on these estimates.

7 Impairment of Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company''s assets. If any indication exists, an asset''s recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use.

8 Employee Benefits

a) Short term employee benefits are recognized as an expense at undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Profit & Loss Account in the year of payment.

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Mar 31, 2013

1 Basis of Accounting

The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, accounting principles generally accepted in India and Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI) to the extent applicable.

2 Revenue Recognition

a) Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded at net of shortages, claims settled, rate differences, rebate allowed to customers.

b) Export Sales are booked at the rate on the date of transaction and the resultant gain or loss on realisation or on translation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt with in the statement of Profit and Loss Account.

3 Fixed Assets and Depreciation

Fixed assets, other than Plant & Machinery, are valued and stated at cost less accumulated depreciation calculated on the basis of Written Down Value Method on prorata basis and at the rates prescribed in Schedule XIV to the Companies Act, 1956. In case of Plant & Machinery, depreciation has been provided on Straight Line Method (SLM) basis. Depreciation of'' 86,951/- has been debited to Revaluation Reserve Account out of total depreciation of'' 1,390,031/-.

4 Inventories

Inventories of Raw Materials, Stores and Spares, Packing material, Coal, Goods in process and Finished goods are stated at Cost or Net Realisable Value whichever is lower, as certified by Management. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costing formula used is First-in-First-out (FIFO).

5 Investments

Investments are classified as Long Term Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

6 Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosure of an item or information in the financial statements has been made relying on these estimates.

7 Impairment of Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company''s assets. If any indication exists, an asset''s recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use.

8 Employee Benefits

a) Short term employee benefits are recognized as an expense at undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Profit & Loss Account in the year of payment.

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Mar 31, 2012

1 Basis of Accounting

The Financial Statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, accounting principles generally accepted in India and Accounting Standards issued by The Institute of Chartered Accountants of India (ICAI) to the extent applicable. There is change in Accounting policy of the company in the current year in order to comply with the requirement of Revised Schedule VI. Operating Cycle of the company is less than 12 months , hence period of twelve months has been considered as the operating cycle of the company and the same is considered for bifurcation of current & non current items. In order to comply with the Revised Schedule VI, previous years' figures have been regrouped/reclassified .

2 Revenue Recognition

a) Sales including export sales and trading sales are recognized when goods are dispatched from the factory and are recorded at net of shortages, claims settled, rate differences, rebate allowed to customers.

b) Export Sales are booked at the rate on the date of transaction and the resultant gain or loss on realization or on translation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt with in the statement of Profit and Loss Account.

3 Fixed Assets and Depreciation

Fixed assets, other than Plant & Machinery, are valued and stated at cost less accumulated depreciation calculated on the basis of Written Down Value Method on prorata basis and at the rates prescribed in Schedule XIV to the Companies Act, 1956. In case of Plant & Machinery, depreciation has been provided on Straight Line Method (SLM) basis. Depreciation of 96,613/- has been debited to Revaluation Reserve Account out of total depreciation of 12,70,026/-.

4 Inventories

Inventories of Raw Materials, Stores and Spares, Packing material, Coal, Goods in process and Finished goods are stated at Cost or Net Realizable Value whichever is lower, as certified by Management. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costing formula used is First-in-First-out (FIFO).

5 Investments

Investments are classified as Long Term Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognize a decline, if any other than temporary in nature.

6 Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosure of an item or information in the financial statements has been made relying on these estimates.

7 Impairment of Assets

Consideration is given at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amounts of the Company's assets. If any indication exists, an asset's recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use.

8 Employee Benefits

a) Short term employee benefits are recognized as an expense at undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Profit & Loss Account in the year of payment.

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Mar 31, 2010

1 Basis of Accounting

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and comply with the provisions of Companies Act, 1956, accounting principles generally accepted in India and Accounting Standards issued under Companies (Accounting Standards) Rules 2006 as amended /issued by The Institute of Chartered Accountants of India (ICAI) to the extent applicable.

2 Revenue Recognition

a) Sales including export sales and trading sales are recognised when goods are dispatched from the factory and are recorded at net of shortages, claims settled, rate differences, rebate allowed to customers.

b) Export Sales are booked at the rate on the date of transaction and the resultant gain or loss on realisation or on translation is accounted as "Foreign Exchange Rate Fluctuation" and is dealt with in the statement of Profit and Loss Account.

3 Fixed Assets and Depreciation

Fixed assets, other than Plant & Machinery, are valued and stated at cost less accumulated depreciation calculated on the basis of Written Down Value Method on prorata basis and at the rates prescribed in Schedule XIV to the Companies Act, 1956. In case of Plant & Machinery, depreciation has been provided on Straight Line Method (SLM) basis. Depreciation of Rs.1,19,275/- has been debited to Revaluation Reserve Account out of total depreciation of Rs.13,69,584/-.

4 Inventories

Inventories of Raw Materials, Stores and Spares, Packing material, Coal, Goods in process and Finished goods are stated at cost or net realisable-value whichever is lower, as certified by management. Cost comprises of cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costing formula used is First-in-First-out (FIFO).

5 Investments

Investments are classified as Long Term Investments. Long term investments are stated at Cost. Provision is made for diminution in the value of Long term Investments to recognise a decline, if any other than temporary in nature.

6 Use of Estimates

The preparation of financial statements requires management to make estimates

and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities on the date of financial statements. The recognition, measurement, classification or disclosure of an item or information in the financial statements has been made relying on these estimates.

7 Impairment of Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amounts of the Companys assets. If any indication exists, an assets recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an assets exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use.

8 Employee Benefits

a) Short term employee benefits are recognized as an expense at undiscounted amount in the Profit & Loss Account of the year in which the related service is rendered.

b) Post employment and other long term employee benefits are recognized as an expense in the Profit & Loss Account in the year of payment.

9 Miscellaneous Expenditure

a) It consist of deferred revenue expenses incurred by the company for the development of brand name for one of its major product, known as "APIBRAKO" and Research & development expenditure. One fourth part of total brand building expenditure is being written off in current year. One fifth part of total expenditure on Research & Development is being written off in the current year.