Significant Accounting Policies
The significant accounting policies applied by the Company in the preparation of its Financial
Statements are hsted below. Such accounting policies have been applied consistently to all the periods
presented in these Financial Statements.
a. Statement of Compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind
AS) notified under Section 133 of the Companies Act, 2013. The financial statements have also been
prepared in accordance with the relevant presentation requirements of the Companies Act, 2013.
b. (l)Basis for Preparation & Presentation
The Financial Statements have been prepared under the historical cost convention on accrual basis
with the exception of certain assets and liabilities carried at fair values. The Assets and Liabilities
have been classified as Current/Non- Current as per the Company's normal operating cycle and
other criteria set out in the Act. Based on the nature of products and the Lime between the acquisition
of assets for processing and their realisation in Cash and Cash Equivalents, the Company has
ascertained its operating cycle as 12 months for the purpose of Current/Non- Current classification of
Assets and Liabilities. The statement of Cash Flows has been prepared under indirect method.
All amounts disclosed in the Financial Statements and accompanying notes have been rounded off to
the nearest lakhs as per the requirement of Schedule III of the Companies Act, 2013, unless otherwise
stated.
(2)Use of Estimates and Critical Accounting Judgements
The preparation of Financial Statements is in conformity with Generally Accepted Accounting
Principles which requires management to make estimates and assumptions. The estimates and the
associated assumptions are based on historical experience, opinions of experts and other factors that
are considered to be relevant.
c. Property, Plant and Equipment-Tangible Assets
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discounts and rebates
less accumulated depreciation and impairment losses, if any. Such cost includes purchase price,
borrowing cost and any cost directly attributable to bringing the assets to its working condition for its
intended use, net changes on foreign exchange contracts and adjustments arising from exchange rate
variations attributable to the assets. All other repairs and maintenance are charged to the Statement of
Profit and Loss during the reporting period in which they are incurred. An item of Property, Plant
and Equipment is derecognised upon disposal or when no future economic benefits are expected to
arise from continued use of asset.
Depreciation Method and Estimated Useful Life
Depreciation is calculated using the straight-line method on a pro-rata basis from the date on which
each asset is put to use to allocate their cost, net of their residual values, over their estimated useful
hves. The estimated useful hves are those prescribed under Schedule II to the Companies Act, 2013.
d. Intangible Assets and Amortisation
Intangible assets are stated at cost, net of recoverable taxes, trade discounts and rebates less
accumulated amortisation and impairment loss, if any. The cost comprises of purchase price,
borrowing costs and any cost directly attributable to bringing the asset to its working condition for
the intended use.
e. Impairment
Tangible and Intangible Assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. Non
financial assets that suffered an impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.
f. Leases
Company as a lesson
The Company classifies the leases as either a finance lease or an operating lease depending on
whether the risks and rewards incidental to ownership of an underlying asset are transferred and
recognises finance income over the lease term.
Company as a lessee:
In accordance with Ind AS-116, the Company assesses whether a contract contains a lease ,at
inception of a contract. At the date of commencement of the lease, the Company recognises a “Right
Of Use" asset and a corresponding liability for all lease arrangements in which it is the lessee, except
for leases with a term of twelve months or less (short term leases) and low value leases. For these
short term and low value leases, the Company recognises the lease payments as an operating expense
on a straight fine basis over the term of the lease. The right of use assets are amortised using the
straight fine method from the commencement date over the shorter of lease term or useful life of right
to use asset. The lease payments are discounted using the interest rate implic it in the lease or if not
readily determinable using the incremental borrowing rates. Lease Liabilities are re measured with a
corresponding adjustment to the related right of use asset if the Company changes its assessment of
whether it will exercise an extension or termination option.
g. Financial Instruments
Financial Assets and Financial Liabilities are recognised when the Company becomes a party to the
contractual provisions of the relevant instrument or Financial Liabilities. Purchase and sale of
Financial Assets are recognised using trade date accounting.
Financial Assets
Financial Assets include Trade Receivables, Advances, Security Deposits, Cash and Cash Equivalents
etc. which are classified for measurement at amortised cost. Management determines the classification
of an asset at initial recognition depending on the purpose for which the assets were acquired. The
subsequent measurement of Financial Assets depends on such classification.
Impairment: The Company assesses at each reporting date whether a Financial Asset (or a group of
Financial Assets) are tested for impairment based on available evidence or information. Expected
credit losses are assessed and loss allowances recognised if the credit quahty of the Financial Asset
has deteriorated significantly since initial recognition.
Income Recognition: Interest income is recognised in the Statement of Profit and Loss using the
effective interest method.
Financial Liabilities:
Borrowings, Trade Payables and other Financial Liabilities are initially recognised at the value of the
respective contractual obligations. They are subsequently measured at amortised cost using the
effective interest method. For trade and other payables maturing within one year from the Balance
Sheet date, the carrying amounts approximate fair value due to short maturity of these instruments.
De-Recognition:
Financial Liabilities are derecognised when the liability is extinguished, that is, when the contractual
obligation is discharged, cancelled and on expiry.
h. Inventories
Inventories are valued at lower of cost and net realisable value except waste which is valued at
estimated realisable value as certified by the management.
i. Revenue
Revenue is recognised when the performance obligation is satisfied by transferring promised goods
or services (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains
control of that asset. Revenue is measured at the fair value of the consideration received or receivable
net of discounts, taking, into account contractually defined terms and excluding taxes and duties
collected on behalf of the Government.
j. Foreign Currency Transactions
Items included in the Financial Statements are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).The Standalone Ind AS Financial
Statements are presented in Indian Rupee (INR) which is Company's functional and presentation
currency.
k. Cash and Cash Equivalents
For the purpose of presentation in the Statement of Cash Flows, Cash and Cash Equivalents includes
cash in hand, cheques/drafts in hand, demand deposits with banks, short term balances, highly
hquid investments that are readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value. Book overdrafts are shown within Other Financial Liabilities in
the Balance Sheet and form part of Cash and Cash Equivalents in the Cash Flow Statement.
l. Income Tax
Income tax expense represents the sum of the current tax and deferred tax.
Current tax charge is based on taxable profit for the year. Taxable profit differs from profit as
reported in the Statement of Profit and Loss because some items of income or expense are taxable or
deductible in different years or may never be taxable or deductible. The Company's liability for
current tax is calculated using Indian tax rates and laws that have been enacted by the reporting date.
Current tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority. The Company periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation and estabhshes
provisions where appropriate.
Deferred tax is the tax arising from temporary differences between the carrying amounts of assets and
liabilities in the Balance Sheet and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax
rates that are expected to apply in the period when the liability is settled or the asset realised, based
on tax rates that have been enacted or substantively enacted by the reporting date.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in Other Comprehensive Income or directly in equity. In this case the tax is also
recognised in Other Comprehensive Income or directly in equity respectively.
m. Retirement Benefits:
Currently there is no employee in the company who has been working for more than 5 years in
continuous service, hence there is no provision required for gratuity.
n. Earnings Per Share
Basic earnings per Share is calculated by dividing the profit for the period attributable to the owners
of Company by the weighted average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period and for all periods
presented is adjusted for events, such as bonus shares, other than the conversion of potential equity
shares that have changed the number of equity shares outstanding without a corresponding change in
resources. For the purposes of calculating diluted earnings per share the profit for the period
attributable to the owners of the Company and the weighted average number of shares outstanding
during the period is adjusted for the effects of all dilutive potential equity shares.
o. Exceptional Items
When items of income or expense are of such nature, size and incidence that their disclosure is
necessary to explain the performance of the Company for the year, the Company makes a disclosure
of the nature and amount of such items separately under the head “Exceptional Items."
p. Segment Reporting
This clause is not applicable to the company.
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