NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS
1. Accounting Policies and Other Information
A. Significant accounting policies I. System of Accounting:
i. The company follows mercantile system of accounting and recognizes income and expenditure on accrual basis.
ii. The financial statements have been prepared in all material respects with Accounting Standards as relevant and notified by the Central Government.
iii. The financial statements are prepared on historical cost basis and as a going concern.
2. Revenue recognition:
i. Sale of goods is recognized at the point of dispatch of goods to customers. Gross sale is inclusive of Excise Duty and is net of Value Added Tax / Sales Tax.
ii. Income from guest accommodation in respect of hotel division is recognized on day to day basis after the guests checks-in. Discounts if any in this regard are accounted upon final conclusion of the bill with the guests. Advance, if any, received against room bookings are treated as a liability pending finalization of bill / provision of services.
iii. Income from sale of Food & Beverages is recognized at the point of serving of these items to the guests. The income stated is exclusive of Sales Tax, Luxury Tax and Service Tax.
iv. Dividends from investment are recognized as income of the year in which the same are declared by in the investee company.
3. Tangible Fixed Assets and Depreciation:
Tangible Fixed Assets acquired by the company are reported at acquisition value, with deductions for accumulated depreciation and impairment losses, if any.
The acquisition cost for this purpose includes the purchase price (net of duties and taxes which are recoverable in future) and expenses directly attributable to the asset to bring it to the site and in the working condition for its intended use.
Interest during construction period up to the date of commencement of operations, indirect project expenditure and trial run expenditure (net of trial run income, if any) incurred in respect of projects under implementation are capitalized to the asset constructed / created.
Depreciation is provided in accordance with Schedule II of the Companies Act, 20I3 in respect of the remaining useful life.
Spares and tools that are not in the nature of "Property" as defined / explained in Accounting Standard 10 "(AS 10) ''''Property, Plant & Equipment'''' are treated as part of inventories
Investments are stated at cost. The amalgamation of both its subsidiaries viz., Bhagyanagar Chemicals Limited and Balaji Greentech Products Limited with Balaji Amines Limited has been approved by all the three companies and applications have been made to appropriate authorities for approval / sanction of the same. Pending sanction of said amalgamation, no effect is given to the diminution in the value in these investments. The said investments are stated at cost and the effect of the diminution will be adjusted in the process of giving effect to amalgamation in accordance with AS - I4 Accounting for Amalgamations.
The said subsidiaries are considered as going concerns till the final sanction of the Amalgamation referred to above.
a) Finished goods are valued at lower of cost or Net Realizable Value. Cost for this purpose is arrived at on Absorption Costing basis. Excise duty is included in valuation of stocks of finished goods at the end of the year.
b) Stock in process/plant is valued at cost.
c) Stock of raw materials, Stores and Spares and packing materials are valued at cost. Cost for this purpose, does not include duties/taxes that are recoverable in future.
d) Food & Beverages:
1. Groceries: Groceries is valued at cost arrived at on weighted average basis.
2. Beverages:Valued at cost.
6. Staff Benefits:
a. Provident Fund Contributions are accounted on accrual basis.
b. To cover the benefits payable to the employees on retirement, the company has subscribed to a policy of Group Gratuity Scheme of Life Insurance Corporation of India. All contributions made towards the policy premiums are charged to revenue.
7. Research and Development:
Revenue expenditure on research and development is charged to Statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is treated at par with other fixed assets and depreciated accordingly.
8. Deferred Taxation:
Accounting treatment in respect of deferred taxation is in accordance with Accounting Standard 22 - "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.
9. Sales Tax Benefits:
Eligible sales tax benefits accruing to the company are accounted for in the year in which the final assessment by the concerned authorities is completed.
10. Borrowing Costs:
Interest and other costs in respect of borrowings for expansion / additional fixed investments including R & D projects are capitalized to such investments. Borrowing costs relating to period after the commencement of operations of these projects are charged to revenue.
11. Foreign Currency Transactions:
Foreign Exchange Transactions are recorded at pre-determined standard exchange rates which are reviewed periodically. Gains or losses arising out of such periodic revisions of such standard rates and also on realization/settlement are accounted for accordingly. No effect is determined in respect of the repayment and balances in respect of Foreign Currency Loans as the same are paid out of the Foreign Exchange earnings through the Exchange Earners Foreign Currency Accounts in respective currencies.
12. Impairment of Assets:
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 will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset''''s net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. In carrying out such exercise, due effect is given to the requirements of Schedule II of the Companies Act, 20l3.
13. Corporate Social Responsibility
The company computes the amount required to be spent on Corporate Social Responsibility in accordance with the provisions of Section l35 of the Companies Act, 20l3.The amounts are spent on the eligible projects prescribed under Schedule VII of the Act. Provision is made in the books for the amounts unspent, if any and if material, and the same is carried forward to be spent in the subsequent year. During the year ended March 3l, 20l7 the company has spent the required amount. Hence there are no unspent amounts on this account.