2.3. Significant Accounting Policies
a) Property, plant and equipment:
Property, plant and equipment is stated at acquisition cost net of accumulated
depreciation and accumulated impairment losses, if any. The Cost of these assets
comprise its purchase price, borrowing cost and any cost directly attributable to bringing
the asset to its working condition for its intended use. Subsequent expenditure relating to
an item of assets are added to its book value only if they increase the future benefits from
the existing assets beyond its previously assessed standard of performance. All other
repairs and maintenance cost are charged to the statement of profit and loss during the
period in which they are incurred.
Gains/Losses arising on disposal of property, plant and equipment are recognized in the
statement of profit and loss as exceptional items.
Depreciation on fixed assets is provided on straight line method based on estimated
useful life prescribed under Schedule II of the Companies Act, 2013.
The residual values, useful lives and method of depreciation of property, plant and
equipment is reviewed at each financial year end and adjusted prospectively, if
appropriate.
b) Inventories:
Inventories are valued at the lower of cost and net realizable value after providing for
obsolescence, if any except in case of by-product which are valued at net realizable
value. The cost is computed on First in First out (FIFO) basis. Cost for the purpose of
valuation of finished goods and goods in process is computed on the basis of cost of
material, labor and other related overheads.
c) Cash and Cash Equivalents:
Cash and Cash Equivalents are short term (3 months or less from the date of acquisition),
highly liquid investments that are daily convertible into cash and which are subject to and
insignificant risk of changes in value.
d) Trade Receivables:
Trade receivables are recognized at fair value. In respect of ageing the company has
debtors amounting to Rs. 623.01 Lac. (Previous year Rs. 702.98 Lac.). The Company is
of the view that they have a strong base for recovering the amount from customer and
they are in advance stage of discussion on the settlement of such outstanding amount and
accordingly the above recoverable amount in the books is appropriate and accordingly no
adjustment is required in the financial statement at the balance sheet date.
e) Impairment of Non-Financial Tangible Assets:
Property, plant and equipment with finite life are evaluated for recoverability whenever
there is an indication that carrying amounts may not be recoverable. If any such
indication exists, the recoverable amount (i.e. higher of fair value less cost to sell and the
value in use) is determined on an individual asset basis unless the asset does not generate
cash flow that are largely independent of those from other assets. In such cases, the
recoverable amount is determined for the cash generating unit (CGU) to which the assets
belongs.
If the recoverable amount of an asset (or CGU) is estimated to be less that its carrying
amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
An impairment loss is recognized in the statement of profit and loss.
|