2 SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These policies have
been consistently applied to all the years presented, unless otherwise stated.
a) Basis of preparation
i) Compliance with Ind AS
These financial statements of the company comply in all material aspects with Indian Accounting Standards (IndAS) notified under Section
133 of the Companies Act, 2013 (the Act) [Companies (I ndian Accounting Standards) Rules, 2016] and other relevant provisions of the Act.
The financial statements up to year ended 31 March 2019 were prepared in accordance with the accounting standards notified under
Companies (Accounting Standard) Rules, 2006 (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 for the following:
* certain financial assets and liabilities (including derivative instruments) and contingent consideration that is measured at fair value;
* assets held for sale - measured at fair value less cost to sell;
* defined benefit plans - plan assets measured at fair value;
b) Segment reporting
The Company is engaged in trading of Chains and Chemicals. In view of the Management the risks and returns in trading of these products
are not differences. Hence the disclosure of "Segment Reporting" not required accordingly.
c) Revenue recognition
Sales are recognised when the significant risk and reward of ownership of the goods are passed to the customer. Sales are net off sales
return, quantity discount and exclusive of Goods and Service tax collected
d) Deferred Tax
The deferred tax for timing differences between the book profits and tax profits for the year is accounted for using the tax rates and laws that
have been enacted or substantially enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized
to the extent there is a virtual certainty that these would be realized in future and are reviewed for the appropriateness of their respective
carrying values at each balance sheet date.(ii) The Deferred Tax for timing difference between Book Profits and Tax Profits for the year is
accounted for using the tax rate and laws that have been enacted or substantially enacted as of the Balance Sheet Date. Deferred Tax
assets arising from timing differences are recognized to the extent there is a virtual certainty that these would be realized in future and are
reviewed for the appropriateness of their respective carrying values at each Balance Sheet Date.
e) Leases
Lease rentals in respect of assets acquired under operating leases are charged to the Statement of Profit & Loss as incurred.
i) Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian
Accounting Standards) Second Amendment Rules, has notified Ind AS 116 Leases which replaces the existing lease standard, Ind AS 17
leases and other interpretations. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases
for both lessees and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.The Company has adopted Ind AS
116, effective annual reporting period beginning from 1 April 2019 The effect on adoption of Ind AS116 on The financial statement is
insignificant.
ii) As a lessee, the Company previously classified leases as operating or finance leases based on its assessment of whether the lease
transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the Company. Under Ind AS 116, the
Company recognizes right of use assets and lease liabilities for most leases i.e. these leases are on balance sheet.
f) Investments and other financial assets
The group classifies its financial assets in the following measurement categories:
* those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
* those measured at amortised cost.
The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income.
i) Impairment of financial assets
The group assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI
For trade receivables only, the group applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires
expected lifetime losses to be recognised from initial recognition of the receivables.
ii) Derecognition of financial assets
A financial asset is derecognised only when
* The group has transferred the rights to receive cash flows from the financial asset or
* retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to
one or more recipients.
Where the entity has transferred an asset, the group evaluates whether it has transferred substantially all risks and rewards of ownership of
the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and
rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset,
the financial asset is derecognised if the group has not retained control of the financial asset. Where the group retains control of the financial
asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
g) Impairment of assets
The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication
exists, the management estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount
of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date
there is an indication that if a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.
h) Cash and cash equivalents
Cash and Cash equivalents for the purpose of cash flow statements comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
i) Inventories
Inventories are valued at lower of Cost and Net Realisable Value. Cost of traded goods is arrived at on FIFO
j) Property, plant and equipment
i) Fixed Assets are stated at cost less accumulated depreciation except for those, which are revalued, in which case they are stated at the
revalued cost less accumulated depreciation.
ii) Depreciation is provided on the straight-line method as per the useful life prescribed in Schedule II of the Companies Act, 2013.
The residual values are not more than 5% of the original cost of the asset.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss within other
gains/(losses).
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