1. Company overview
Alfa Ica (India) Limited (the Company) is a public company
domiciled in India and is incorporated under the provisions
of the Companies Act applicable in India. Its shares are listed
on Bombay Stock Exchange (BSE). The registered office of the
Company is located at1-4, Uma Industrial Estate, Village
Vasana- Iyawa,Tal. Sanand, Dist. Ahmedabad, Gujarat.
The Company's principal activity is to manufacture and
market decorative laminate sheets.
2. Basis of preparation
i. Compliance with Ind AS
The financial statements of the Company have been
prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the Companies
(Indian Accounting Standards) Rules, 2015 as
amended and other relevant provisions of the Act.
Accounting policies have been consistently applied
except where a newly issued accounting standard is
initially adopted or a revision to an existing
accounting standard requires a change in the
accounting policy hitherto in use.
The financial statements are presented in Indian
Rupee ('INR') which is also the functional and
presentation currency of the company.
ii. Historical cost convention
The financial statements have been prepared on a
historical cost basis.
iii. Use of estimates
In preparing the financial statements in conformity
with accounting principles, management is required
to make estimates and assumptions that may affect
the reported amounts of assets and liabilities and the
disclosure of contingent liabilities as at the date of
financial statements and the amounts of revenue and
expenses during the reported period. Actual results
could differ from those estimates. Any revision to
such estimates is recognised in the period the same is
determined.
3. Revenue recognition
Revenue is recognised at the fair value of the consideration
received or receivable. The amount disclosed as revenue is
inclusive of excise duty and net of returns, trade discounts.
The company recognizes revenue when the amount of
revenue can be measured reliably and it is probable that the
economic benefits associated with the transaction will flow
to the entity.
Sale of products
Timing of recognition- Revenue from sale of products is
recognised when significant risks and rewards in respect of
ownership of products are transferred to customers based
on the terms of sale.
Measurement of revenue- Revenue from sales is based on
the price specified in the sales contracts, net of all discounts
and returns at the time of sale.
Revenue from interest is recognized on accrual basis.
4. Foreign currency translation
i. Presentation Currency
The functional currency of the company is Indian
rupee. These financial statements are presented in
Indian rupee.
ii. Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such
transactions and from the translation of monetary
assets and liabilities denominated in foreign
currencies at year end exchange rates are generally
recognised in profit or loss.
5. Property, plant and equipment
Tangible fixed assets are carried at cost of acquisition less
accumulated depreciation. The cost of an item of tangible
fixed asset comprises its purchase price, including import
duties and others non-refundable taxes or levies and any
directly attributable cost of bringing the asset to its working
condition for its intended use; any trade discounts and
rebates are deducted in arriving at the purchase price.
Tangible fixed assets under construction are disclosed as
capital work in progress.
Recognition:
The cost of an item of property, plant and equipment shall
be recognised as an asset if, and only if:
(a) it is probable that future economic benefits
associated with the item will flow to the entity; and
(b) the cost of the item can be measured reliably.
Gains or losses arising from de-recognition of fixed assets are
measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognized in the Statement of profit and 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.
6. Intangible assets
Intangible assets are stated at cost less accumulated
amortisation and net of impairments, if any. An intangible
asset is recognized if it is probable that the expected future
economic benefits that are attributable to the asset will flow
to the company and its cost can be measured reliably.
Intangible assets are amortised on straight line basis over
their estimated useful lives.
7. Depreciationand amortization expenses
Depreciation on tangible fixed assets and amortisation of
intangible fixed assets is provided on the straight line
method, as per useful life prescribed in Schedule II to the
Companies Act, 2013.
Depreciation on additions is provided on a pro-rata basis
from the month of acquisition/installation. Depreciation on
sale/deduction from fixed assets is provided for upto the
date of sale/adjustment, as the case may be.
8. Income tax
Income tax expense represents the sum of current and
deferred tax (including MAT). Current income-tax is
measured at the amount expected to be paid to the tax
authorities in accordance with the Income-tax Act, 1961
enacted in India.
Deferred tax is recognised on 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 and are accounted for using the liability
method. Deferred tax liabilities are generally recognised for
all taxable temporary differences, and deferred tax assets
are generally recognized for all deductible temporary
differences, carry forward tax losses and allowances to the
extent that it is probable that future taxable profits will be
available against which those deductible temporary
differences, carry forward tax losses and allowances can be
utilised. Deferred tax assets and liabilities are measured at
the applicable tax rates. Deferred tax assets and deferred tax
liabilities are off set and presented as net.
The carrying amount of deferred tax assets is reviewed at
each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be
available against which the temporary differences can be
utilised.
Credit of MAT is recognised as an asset only when and to the
extent there is convincing evidence that the Company will
pay normal income tax during the specified period, i.e., the
period for which MAT credit is allowed to be carried forward.
In the year in which the MAT credit becomes eligible to be
recognized as an asset, the said asset is created by way of a
credit to the profit and loss account and shown as MAT
credit entitlement. The Company reviews the same at each
balance sheet date and writes down the carrying amount of
MAT credit entitlement to the extent there is no longer
convincing evidence to the effect that the Company will pay
normal income tax during the specified period.
9. Borrowing costs
General and specific borrowing costs that are directly
attributable to the acquisition, construction or production of
a qualifying asset are capitalised as part of the cost of
respective assets during the period of time that is required to
complete and prepare the asset for its intended use.
Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended use
or sale. Other borrowing costs are expensed in the period in
which they are incurred.
10. Inventories
Raw materials and stores, work-in-progress, traded and
finished goods are stated at the lower of cost and net
realizable value. Cost of raw materials and traded goods
comprise of cost of purchase. Cost of work-in-progress and
finished goods comprises direct materials, direct labour and
an appropriate proportion of variable and fixed overhead
expenditure, the later being allocated on the basis of normal
operating capacity. Cost of inventories also includes all other
cost incurred in bringing the inventories to their present
location and condition. Net realizable value is the estimated
selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs
necessary to make the sale.
11. Cash and cash equivalents
The Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits with a
maturity period of three months or less from the balance
sheet date, which are subject to an insignificant risk of
changes in value.
12. Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
13. Government grants
Grants from the government are recognised at fair value
where there is a reasonable assurance that the grant will be
received and the Company will comply with all attached
conditions.
Government grants relating to income are deferred and
recognised in the profit or loss over the period necessary to
match them with the costs they are intended to compensate
and presented within other income.
Government grants relating to the purchase of property,
plant and equipment are included in non-current liabilities as
deferred income and are credited to profit and loss on a
straight line basis over the expected lives of the related
assets and presented within other income.
The benefit of a government loan at below current market
rate of interest is treated as a government grant.
|