Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. BASIS OF PREPARATION
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies
(Indian Accounting Standards) Rules, 2015 notified under section 133 of the Companies Act 2013 (the Act and other relevant provisions of
the Act). The financial statements have been prepared on accrual basis under the historical cost convention. Further, the company has also
reclassified the previous year figures in accordance with the requirements applicable for the current year
b. GENERAL
The company follows the accrual method of accounting. The financial statements have been prepared in accordance with the
historical cost convention and in accordance with. Expenses are accounted on their accrual with necessary provision for all known
liabilities and losses.
c. USE OF ESTIMATES
The preparation of financial statements requires estimates and assumptions to be made that affect the required amount of assets and
liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference
between the actual amounts and the estimates are recognized in the period in which the results
d. PROPERTY, PLANT & EQUIPMENT
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized
as at April 1, 2015, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property plant and
equipment.
Property, plant & equipment and capital work in progress are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of
bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase
price. Such cost includes the cost of replacing part of the plant and equipment.
The present value of the expected cost for decommissioning of an asset after its use is included in the cost of the respective asset, if the
recognition criteria for a provision are met.
The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which
is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.
An item of Property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no
future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition 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 or loss when the
asset is derecognized.
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.
e. DEPRECIATION
Depreciation is provided to the extent of depreciable amount on written Down Value (WDV) at the rates and method prescribed in the
Schedule II of the Companies Act, 2013 and on pro rata basis for the additions / deletions during the year.
f. INVENTORIES
Inventories are valued at lower of cost or Net Realizable Value
g. REVENUE RECOGNITION
Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably
measured, regardless of when the payment is being made. 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.
h. CURRENT VS NON-CURRENT CLASSIFICATION
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 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:
? Expected to be settled in normal operating cycle
? Held primarily for the purpose of trading
? 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.
Based on the nature of products and time between the acquisition of assets for processing and their realization in cash and cash
equivalents, the Company has identified twelve months as its operating cycle.
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