1. Background
Bang Overseas Limited (BOL or the Company) incorporated in India is involved in business
manufacturing and trading of Textile and Textile products.
2. Basis of preparation of Financial Statements
i) Compliance with Ind AS
These financial statements have been prepared in accordance with the Indian Accounting Standards
(hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to Section
133 of the Companies Act, 2013 (‘Act’) read with of the Companies (Indian Accounting Standards)
Rules,2015 as amended and other relevant provisions of the Act.
ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except defined benefit plan
measured at fair value of plan assets less present value of defined benefit plan.
iii) Current & non-current classification
All assets and liabilities have been classified as current or non-current as per the Company’s normal
operating cycle (twelve months) and other criteria set out in the Schedule III to the Act.
iv) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest rupees as
per the requirement of Schedule III, unless otherwise stated.
3. Use of Estimate
The preparation of financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of
the financial statements and the reported amounts of revenues and expenses during the period reported.
Actual results could differ from those estimates. Any revision to accounting estimates is recognised in
accordance with the requirements of the respective accounting standard.
4. Property, plant and equipment
Tangible assets
The Company has applied for the one time transition exemption of considering the carrying cost on the
transition date i.e. 01st April 2016 as the deemed cost under IND AS. Hence regarded thereafter as
historical cost.
All items of property, plant and equipment are stated at cost less depreciation and impairment, if any.
Historical cost includes expenditure i.e. directly attributable to the acquisition of the items.
Subsequent costs are included in the assets carrying amount or recognised as separate assets, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Company and the cost of the item can be measured reliably.
Depreciation
Depreciation on the property, plant and equipment is provided on straight line method at the rates
prescribed and in the manner specified in Schedule II to the Companies Act, 2013 for the manufacturing
units. Other units fixed assets have been continued depreciated by following written down value method.
The gain and loss on disposal are determined by comparing proceeds with carrying amount. These are
included in the statement of profit and loss.
5. Intangible Assets
Computer software
Computer software are stated at cost, less accumulated amortization and impairments, if any.
Amortization method and useful life
The company amortizes computer software using straight-line method over the period of 6 years.
Gain & Losses on disposal are determined by comparing proceeds with carrying amount. These are
included in the statement of Profit and Loss.
6. Cash & Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash and
Cheque in hand, bank balances, demand deposits with banks and other short-term highly liquid
investments with maturities of three months or less that are readily convertible to known amounts of cash
& which are subject to an insignificant risk of changes in value.
7. Leases
Operating lease
As a lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the
Company, as lessee, are classified as operating leases. Payments made under operating leases are charged
to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments
are structured to increase in line with expected general inflation to compensate for the Company’s
expected inflationary cost increases.
As a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight¬
line basis over the lease term unless the receipts are structured to increase in line with expected general
inflation to compensate for the expected inflationary cost increases. The respective leased assets are
included in the balance sheet based on their nature.
8. Inventories
Inventories are valued at lower of cost or net realisable value. Cost is determined on following basis:
i) Raw material and manufactured finished goods are valued at cost. Cost is determined by using average
cost method.
ii) Trade goods are valued at cost on FIFO basis.
9. Investment in subsidiaries
Investment in subsidiaries are recognised at cost as per Ind AS 27. Except where investments accounted
for at cost shall be accounted for in accordance with Ind AS 105, Non-current Assets Held for Sale and
Discounted Operations, when they are classified as held for sale.
10. Investment in other financial assets
Classification
The Company classifies its financial assets in the following measurement categories:
1. Those to be measured subsequently at fair value (either through other comprehensive income, or
through the Statement of Profit and Loss), and
2. Those measured at amortised cost.
The classification depends on the Company’s business model for managing the financial assets and the
contractual terms of the cash flows.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of
financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit
and Loss.
Debt instruments:
Subsequent measurement of debt instruments depends on the Company’s business model for managing the
asset and the cash flow characteristics of the asset. The Company classifies its debt instruments into
following categories:
1. Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income from
these financial assets is included in other income using the effective interest rate method.
2. Fair value through profit and loss: Assets that do not meet the criteria for amortised cost are
measured at fair value through Profit and Loss. Interest income from these financial assets is included in
other income.
Equity instruments:
The Company measures its equity investment other than in subsidiaries, joint ventures and associates at
fair value through profit and loss. However, where the Company’s management makes an irrevocable
choice on initial recognition to present fair value gains and losses on specific equity investments in other
comprehensive income (Currently no such choice made), there is no subsequent reclassification, on sale or
otherwise, of fair value gains and losses to the Statement of Profit and Loss.
(iii) Impairment of financial assets
The Company measures the expected credit loss associated with its assets based on historical trend,
industry practices and the business environment in which the entity operates or any other appropriate
basis. The impairment methodology applied depends on whether there has been a significant increase in
credit risk.
(iv) Income recognition
Interest income
Interest income from debt instruments is recognized using the effective interest rate method.
Dividends
Dividends are recognized in the Statement of Profit and Loss only when the right to receive payment is
established.
11. Impairment of non- financial assets
The Company assesses at each reporting date whether there is any objective evidence that a non-financial
asset or a group of non-financial assets are impaired. If any such indication exists, the Company estimates
the amount of impairment loss. For the purpose of assessing impairment, the smallest identifiable group of
assets that generates cash inflows from continuing use that are largely independent of the cash inflows
from other assets or groups of assets is considered as a cash generating unit. If any such indication exists,
an estimate of the recoverable amount of the individual asset/cash generating unit is made.
An impairment loss is calculated as the difference between an asset’s carrying amount and recoverable
amount. Losses are recognised in profit or loss. When the Company considers that there are no realistic
prospects of recovery
of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases
and the decrease can be related objectively to an event occurring after the impairment was recognized,
then the previously recognized impairment loss is reversed through profit or loss.
12. Derivative financial instruments
Derivative financial instruments such as forward foreign exchange contracts, to hedge its foreign currency
risks are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently re-measured at their fair value with changes in fair value recognised in the Statement of
Profit and Loss in the period when they arise.
13. Borrowing Costs
Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost. All other borrowing costs are charged to the Statement
of Profit and Loss for the period for which they are incurred. Borrowing costs that are directly attributable
to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A
qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
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