Accounting Policies of Indo Euro Indchem Ltd. Company

Mar 31, 2024

C. Significant Accounting Policies

1.6. Presentation and disclosure of financial statement

All assets and liabilities have been classified as current and non-current as per
Company’s normal operating cycle and other criteria set out in Schedule III of the
Companies Act, 2013 for a company whose financial statements are made in
compliance with the Companies (India Accounting Standards) Rules, 2015.

Based on the nature of products / services and time between acquisition of assets for
processing / rendering of services and their realization in cash and cash equivalents,
operating cycle is less than 12 months, however for the purpose of current/ non¬
current classification of assets and liabilities, period of 12 months has been considered
as its normal operating cycle.

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

An asset is treated as current when it is:

• Expected to be realized or intended to be sold or consumed in 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 equivalents 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 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.

1.7. Property, Plant and Equipment and Depreciation

Recognition and measurement

Under the previous GAAP, property, plant and equipment were carried at historical
cost less depreciation and impairment losses, if any. On transition to Ind AS, the
Company has availed the optional exemption under Ind AS 101 and accordingly it has
used the carrying value as at the date of transition i.e. 1^st April 2016 as the deemed
cost of the property, plant & equipment under Ind AS.

Properties plant and equipment are stated at their cost of acquisition. Cost of an item
of property, plant and equipment includes purchase price including non-refundable
taxes and duties, borrowing cost directly attributable to the qualifying asset, any costs
directly attributable to bringing the asset to the location and condition necessary for its
intended use and the present value of the expected cost for the
dismantling/decommissioning of the asset.

Subsequent costs are included in the asset’s carrying amount or recognized as a
separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company. All other repair and maintenance
costs are recognized in statement of profit and loss as incurred.

Capital work-in-progress comprises of cost incurred on property, plant and equipment
under construction / acquisition that are not yet ready for their intended use at the
Balance Sheet Date.

Depreciation and useful lives

Depreciation on the property, plant and equipment (other than freehold land and capital
work in progress) is provided on a straight-line method (SLM) over their useful lives
which is in consonance of useful life mentioned in Schedule II to the Companies Act,
2013. Depreciation in respect of fixed assets put to use during the year is provided on
a pro-rata basis with reference to the date of installation of assets.

De-recognition

An item of property, plant and equipment and any significant part initially recognized is
de-recognized 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 of profit and loss when the asset is de-recognized.

1.8. Inventories

Raw Material, packing material, stock in trade, work in progress and finished goods
are valued at lower of cost and net realizable value as per Ind AS - 2.

Costs of finished goods, and work in progress are determined by taking material cost
and relevant appropriate overheads, but excluding borrowing costs.

1.9. 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 reliably measured. Revenue is measured
at the fair value of the consideration received or receivable, taking into account
contractually defined terms of payment and excluding taxes or duties collected on
behalf of the government and discounts given to the customers. The Company has
applied the guidelines mentioned in Ind AS 18 for Revenue Recognition.

Interest income is recognized on a time proportionate basis taking into account the
amount outstanding and the rate as applicable.

Dividend is recognized on actual receipt basis.

1.10. Employee benefits

The Provisions of Provident Fund Act, 1952 and the payment of Gratuity Act, 1972 are
not applicable to the Company at present as the number of employees does not
exceed the permissible limit. The retirement benefits payable, if any, shall be
accounted on actual payment basis.

1.11. Taxes on income

Tax expense comprises current and deferred tax. Provision for current tax is made
after taking into consideration benefits admissible under the provisions of the Income
Tax Act, 1961.

The deferred tax resulting from timing difference between taxable and accounting
income is accounted using the tax rates and laws that are enacted or substantively
enacted as on the balance sheet date. Deferred Tax asset is recognized and carried
forward only to the extent that there is virtual certainty that the asset will be realized in
future.

1.12. Investments in equity instruments at FVTOCI

The quoted and unquoted Equity investments are initially measured at fair value plus
transaction costs. Subsequently, they are measured at fair value with gains and losses
arising from changes in fair value recognized in other comprehensive income and
accumulated in the ‘Reserve for equity instruments through other comprehensive
income’. The cumulative gain or loss is not reclassified to profit or loss on disposal of
the investments.

There are no equity investments which are held for trading.

1.13. Cash and cash equivalent

Cash and cash equivalents include cash in hand, bank balances, deposits with banks
(other than on lien) and all short term and highly liquid investments that are readily
convertible into known amounts of cash and are subject to an insignificant risk of
changes in value.

For the purpose of cash flow statement, cash and cash equivalent as calculated above
also includes outstanding bank overdrafts as they are considered an integral part of
the Company’s cash management.

1.14. Cash flow statement

Cash flows are reported using the indirect method, where by net 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 are segregated.

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Mar 31, 2015

I) Method of Accounting

The Financial statement are prepared under historical cost convention on an accrual basis and are in accordance with the Accounting Standards specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rule, 2014 and the relevant provisions of the Companies Act, 2013 / Companies Act, 1956 as applicable.

ii) Use of Estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognized in the period in which the results are known / materialize.

iii) Fixed Assets

Fixed Assets are stated at cost inclusive of freight duties, taxes and all incidental expenses related upto commencement of production, but net of modvat credit.

iv) Depreciation

Depreciation has been provided on the assets on straightline method workout as per useful life of asssets as prescribed under Schedule II to the Companies Act,2013. The Leasehold right in land are not amortised over the period of lease agreement as the management will either extent the lease or get converted as freehold and are stated at cost of Leasehold right.

v) Impairment of Assets

At the end of each year, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on 'Impairment of Assets'. When the carrying value of the asset exceeds its recoverable value. The impairment loss recognized in period accounting periods is reversed if there has been a change in the estimate of recoverable amount.

vi) Investments

Long-term investments are carried at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried, at the lower of cost and fair value.

vii) Investments

Non - Current Investment are stated at cost.

viii) Inventories

Inventories are taken by the Management at end of year. Raw Materials and Finished goods Stock are valued at lower of cost or net realisable value, however Semi Finished Goods are valued at raw material cost, and stores, spares, packing materials & fuels are valued at cost, stock in trade (Trading Stock) are valued at lower of cost or net realizable value.

ix) Employee Benefits:

Retirement benefits are dealt in following manner

a) Company is not covered under the provident fund, hence no provision are made.

b) Gratuity liability is accounted on cash basis.

c) Provision for value of un-utilised leave due to employees on retirement are accounted on cash basis.

x) Treatment of Contingent Liabilities

Contingent liabilities are not provided in account but are disclosed in notes on Accounts.

xi) Sales

Sales arerecognised net of returns and trade discount on dispatches of goods to the customers and are reflected in the accounts as gross realisable value i.e. inclusive of excise duty, but MVAT are excluded.

xii) Other Income

Interest income is accounted on accrual basis, but Sales Tax Refund etc on receipt basis.

xiii) Accounting for Taxes on Income

Tax expenses comprises both current and deferred income tax. Current Tax is the provision made for Income Tax liability on the profits for the year in accordance with the provisions of the Income Tax Act, 1961. Deferred Taxes reflect the impact of 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 as at the Balance Sheet date. Deferred Tax Assets/Liabilities are recognised only if there is reasonable certainty of their realization.

xiv) Borrowing of 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 a substantial period of time to get ready for its intended use of sale. All other borrowing costs are charged to revenue.

xv) Earnings per Share

Basic earning per shares is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of the equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.

xvi) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand, balance in current accounts and unencumbered demand deposits with banks.

xvii) Provision and Contingencies

A provision is recognized when there is a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any, are disclosed in the notes to the financial statements.

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Mar 31, 2014

I. Method of Accounting

The Financial statement are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act,1956.

ii. Fixed Assets

Fixed Assets are stated at cost inclusive of freight duties, taxes and all incidental expenses related upto commencement of production, but net of modvat credit.

iii. Depreciation

Depreciation has been provided on the assets on straight line method at the rate prescribed under schedule XIV of the Companies Act, 1956 as amended. The Leasehold right in land are not amortised over the period of lease agreement and are slated at cost.

iv. Inventories

Inventories are taken by the Management at end of year. Raw Materials and Finished goods are valued at lower of cost or net realisable value, however Semi Finished Goods are valued at raw material cost only, and stores, spares, packing materials & fuels are valued at cost, stock in trade are valued at lower of cost or net realizable value.

v. Investments

Current Investment are stated at cost.

vi. Retirement benefit:

Retirement benefits are dealt in following manner

a) Company is not covered under the provident fund, hence no provision are made.

b) Gratuity liability is accounted on cash basis.

c) Provision for value of un-utilised leave due to employees on retirement are made on cash basis.

vii. Treatment of Contingent Liabilities

Contingent liabilities are not provided in account but are disclosed in notes on accounts.

viii. Sales

Sales are recognised net of returns and trade discount on dispatches of goods to the customers and are reflected in the accounts as gross realisable value i.e. inclusive of excise duty, but MVAT are excluded.

ix. Other Income

Interest income is accounted on accrual basis, but Sales Tax Refund etc on receipt basis.

x. Accounting for Taxes on Income

Tax expenses comprises both current and deferred income tax. Current Tax is the provision made for income tax liability on the profits for the year in accordance with the provisions of the Income Tax Act, 1961. Deferred Taxes reflect the impact of 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 as at the Balance Sheet date. Deferred Tax Assets/Liabilities are recognised only if there is reasonable certainty of their realization,

xi) Earning per Share

Basic earning per shares is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of the equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.

xii) linp airment of Assets

The Company is keeping all fixed assets duly greased and painted, hence feel there is no deterioration in value of assets of the Company as on date of the Balance Sheet. The Plant & Machinery are not in use but expected to get price at WDV as per books.

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Mar 31, 2013

I. Method of Accounting

The Financial statement are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act, 1956.

ii. Fixed Assets

Fixed Assets are stated at cost inclusive of freight duties, taxes and all incidental expenses related up to commencement of production, but net of modal credit.

iii. Depreciation

Depreciation has been provided on the assets on straight line method at the rate prescribed under schedule XIV of the Companies Act, 1956 as amended. The Leasehold right in land are not amortised over the period of lease agreement and are stated at cost.

iv. Inventories

Inventories are taken by the Management at end of year. Raw Materials and Finished goods are valued at lower of cost or net realisable value, however Semi Finished Goods are valued at raw material cost only, and stores, spares, packing materials & fuels are valued at cost, stock in trade are valued at lower of cost or net realizable value.

v. Investments

Current Investment are stated at cost or fair market value

vi. Retirement benefit:

Retirement benefits are dealt in following manner

a) Company is not covered under the provident fund, hence no provision are made.

b) Gratuity liability is accounted on cash basis.

c) Provision for value of un-utilised leave due to employees on retirement are made on cash basis.

vii. Treatment of Contingent Liabilities

Contingent liabilities are not provided in account and are disclosed in notes on accounts.

viii. Sales

Sales are recognised net of returns and trade discount on dispatches of goods to the customers and are reflected in the accounts as gross realisable value i.e. inclusive of excise duty, but MVAT are excluded.

ix. Other Income

Interest income is accounted on accrual basis, but Sales Tax Refund etc on receipt basis.

x. Accounting for Taxes on Income

Tax expenses comprises both current and deferred income tax. Current Tax is the provision made for income tax liability on the profits for the year in accordance with the provisions of the Income Tax Act, 1961. Deferred Taxes reflect the impact of 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 as at the Balance Sheet date. Deferred Tax Assets/Liabilities are recognised only if there is reasonable certainty of their realization.

xi) Earnings per Share

Basic earnings per shares is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of the equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.

xii) Impairment of Assets

The Company is keeping all fixed assets duly greased and painted, hence feel there is no deterioration in value of assets of the Company as on date of the Balance Sheet. The Plant & Machinery are not .in use but expected to get price at WDV as per books.

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Mar 31, 2011

I. Basis of Accounting

The Financial statement are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act,1956.

ii. Fixed Assets

Fixed Assets are capitalised at cost inclusive of freight duties, taxes and all incidental expenses related up to commencement of production, but net of modvat credit.

iii. Depreciation

Depreciation has been provided on the assets on straight line method at the rate prescribed under schedule XIV of the Companies Act,1956 as amended. The Leasehold right in land will be amortised over the period of lease agreement.

iv. Inventories

Inventories are taken by the Management at end of year. Raw Materials and Finished goods are valued at lower of cost or net realisable value, however Semi Finished Goods are valued at raw material cost only, and stores, spares, packing materials & fuels are valued at cost.

v. Investments

Investment are stated at cost.

vi. Retirement benefit:

Retirement benefits are dealt in following manner

a) Company is not covered under the provident fund, hence no provision are made.

b) Gratuity liability is accounted on cash basis.

c) Provision for value of un-utilised leave due to employees on retirement are made on cash basis.

vii. Treatment of Contingent Liabilities

Contingent liabilities are not provided in account and are disclosed in notes on accounts.

viii. Sales

Sales are recognised net of returns and trade discount on dispatches of goods to the customers and are reflected in the accounts as gross realisable value i.e. inclusive of excise duty, but sales tax are excluded.

ix. Other Income

Interest income is accounted on accrual basis, but Sales Tax Refund etc. are accounted on cash basis.

x. Accounting for Taxes on Income

Tax expenses comprises both current and deferred income tax. Current Tax is the provision made for income tax liability on the profits for the year in accordance with the provisions of the Income Tax Act, 1961. Deferred income taxes reflect the impact of 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/Liabilities are recognised only if there is reasonable certainty of their realisation, except in case of Deferred Tax Assets on unabsorbed depreciation and carried forward business losses, which are recognised only if there is virtual certainty of their realisation.

xi) Earning per Share

Basic earning per shares is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of the equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.

xii) Impairment of Assets

The Company is keeping all fixed assets duly greased and painted, hence feel there is no deterioration in value of assets of the Company as on date of the Balance Sheet. The Plant & Machinery are not in use but expected to get price at WDV as per books.

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Mar 31, 2010

I. Basis of Accounting

The Financial statement are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act,1956.

ii. Fixed Assets

Fixed Assess are capitalised at cost inclusive of freight duties, taxes and all incidental expenses related upto commencement of production, but net of modvat credit.

iii. Depreciation

Depreciation has been provided on the assets on straight line method at the rate prescribed under schedule XIV of the Companies Act,1956 as amended. The Leasehold right in land will be amortised over the period of lease agreement.

iv. Inventories

Inventories are taken by the Management at end of year. Raw Materials and Finished goods are valued at lower of cost or net realisable value, however Semi Finished Goods are valued at raw material cost only, and stores, spares, packing materials
v. Investments

Investment are stated at cost.

vi. Retirement benefit:

Retirement benefits are dealt in following manner

a) Company is not covered under the provident fund, hence no provision are made.

b) Gratuity liability is accounted on cash basis.

c) Provision for value of unutilised leave due to employees on retirement are made on cash basis.

vii. Treatment of Contingent Liabilities

Contingent liabilities are not provided in account and are disclosed in notes on accounts.

viii. Sales

Sales are recognised net of returns and trade discount on dispatches of goods to the customers and are reflected in the accounts as gross realisable value i.e. inclusive of excise duty, but sales tax are excluded.

ix. Other Income

Interest income is accounted on accrual basis, but Sales Tax Refund etc. are accounted on cash basis.

x. Accounting for Taxes on Income

Tax expenses comprises both current and deferred income taxes. Current Tax is the provision made for income tax liability on the profits for the year in accordance with the provisions of the Income Tax Act, 1961. Deferred income taxes reflect the impact of 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/Liabilities are recognised only if there is reasonable certainty of their realisation, except in case of Deferred Tax Assets on unabsorbed depreciation and carried forward business losses, which are recognised only if there is virtual certainty of their realisation.

xi) Earning per Share

Basic earning per shares is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of the equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.

xii) Impairment of Assets

The Company is keeping all fixed assets duly greased and painted, hence feel there is no deterioration in value of assets of the Company as on date of the Balance Sheet. The Plant & Machinery are not in use but expected to returns at WDV as per books.

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Mar 31, 2009

I. Basis of Accounting

The Financial statement are prepared under historical cost convention on an accrual basis and are in accordance with the requirements of the Companies Act,1956.

ii. Fixed Assets

Fixed Assets are capitalized at cost inclusive of freight duties, taxes and all incidental expenses related up to commencement of production, but net of modal credit.

iii. Depreciation ''

Depreciation has been provided on the assets on straight line method at the rate prescribed under schedule XIV of the Companies Act,1956 as amended. The Leasehold right in land will be amortized over the period of lease agreement.

iv. Inventories 4 Inventories are taken by the Management at end of year. Raw Materials and Finished goods are valued at lower of cost or net realizable value, however Semi Finished Goods are valued at raw material cost only, and stores, spares, packing materials <& fuels are valued at cost.

v. Investments

Investment are stated at cost.

vi. Retirement benefit: '' . Retirement benefits are dealt in following manner

a} Company is not covered under the provident fund, hence no provision are made.

b) Gratuity liability is accounted on cash basis.

c) Provision for value of unutilized leave due to employees on retirement are made on cash basis.

vii. Treatment of Contingent Liabilities

Contingent liabilities are not provided in account and are disclosed in notes on accounts.

viii. Sales

Sales are recognized net of returns and trade discount on dispatches of goods to the customers and are reflected in the accounts as gross realizable value i.e. inclusive of excise duty, but sales tax are excluded.

ix. Other Income

Interest income is accounted on accrual basis, but Sales Tax Refund etc. are accounted on cash basis.

x. Accounting for Taxes on Income

Tax expenses comprises both current and deferred income taxes. Current Tax is the provision made for income tax liability on the profits for the year in accordance with the provisions of the Income Tax Act, 1961. Deferred income taxes reflect the impact of 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 are recognized only if there is reasonable certainty of their realization, except in case of Deferred Tax Assets on unabsorbed depreciation and carried forward business losses, which are recognized only if there is virtual certainty of their realization. .

xi) Earnings per Share

Basic earnings per shares is 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 the equity shares outstanding during the period. ,

For the purpose of calculating diluted earnings per share 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 effect of all dilutive potential equity shares.

xii) Impairment of Assets

The Company is keeping all fixed assets duly greased and painted, hence feel there is no deterioration in value of assets of the Company as on date of the Balance Sheet. The Plant A Machinery are not in use but expected to returns at WDV as per books.