1.6. Presentation and disclosure of financial statement
All assets and liabilities have been classified as current and non-current as per
Company's normal operating cycle and other criteria set out in Schedule III of the
Companies Act, 2013 for a company whose financial statements are made in
compliance with the Companies (India Accounting Standards] Rules, 2015.
Based on the nature of products / services and time between acquisition of
assets for processing / rendering of services and their realization in cash and
cash equivalents, operating cycle is less than 12 months, however for the
purpose of current/ non- current classification of assets and liabilities, period of
12 months has been considered as its normal operating cycle.
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 equivalents unless restricted from being exchanged or used
to settle a liability for at least twelve months after the reporting period.
A liability is current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is 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.
1.7. Property, Plant and Equipment and Depreciation
Recognition and measurement
Under the previous GAAP, property, plant and equipment were carried at
historical cost less depreciation and impairment losses, if any. On transition to
Ind AS, the Company has availed the optional exemption under Ind AS 101 and
accordingly it has used the carrying value as at the date of transition i.e. 1st April
2016 as the deemed cost of the property, plant & equipment under Ind AS.
Properties plant and equipment are stated at their cost of acquisition. Cost of an
item of property, plant and equipment includes purchase price including non¬
refundable taxes and duties, borrowing cost directly attributable to the
qualifying asset, any costs directly attributable to bringing the asset to the
location and condition necessary for its intended use and the present value of the
expected cost for the dismantling/decommissioning of the asset.
Subsequent costs are included in the asset's carrying amount or recognized as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Company. All other repair and
maintenance costs are recognized in statement of profit and loss as incurred.
Capital work-in-progress comprises of cost incurred on property, plant and
equipment under construction / acquisition that are not yet ready for their
intended use at the Balance Sheet Date.
Depreciation and useful lives
Depreciation on the property, plant and equipment (other than freehold land and
capital work in progress] is provided on a straight-line method (SLM] over their
useful lives which is in consonance of useful life mentioned in Schedule II to the
Companies Act, 2013. Depreciation in respect of fixed assets put to use during
the year is provided on a pro-rata basis with reference to the date of installation
of assets.
De-recognition
An item of property, plant and equipment and any significant part initially
recognized is de-recognized upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on de-recognition
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 and loss
when the asset is de-recognized.
1.8. Inventories
Raw Material, packing material, stock in trade, work in progress and finished
goods are valued at lower of cost and net realizable value as per Ind AS - 2.
Costs of finished goods, and work in progress are determined by taking material
cost and relevant appropriate overheads, but excluding borrowing costs.
1.9. Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits
will flow to the Company and the revenue can be reliably measured. 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 and discounts given to the customers. The
Company has applied the guidelines mentioned in Ind AS 18 for Revenue
Recognition.
Interest income is recognized on a time proportionate basis taking into account
the amount outstanding and the rate as applicable.
Dividend is recognized on actual receipt basis.
1.10. Employee benefits
The Provisions of Provident Fund Act, 1952 and the payment of Gratuity Act,
1972 are not applicable to the Company at present as the number of employees
does not exceed the permissible limit. The retirement benefits payable, if any,
shall be accounted on actual payment basis.
1.11. Taxes on income
Tax expense comprises current and deferred tax. Provision for current tax is
made after taking into consideration benefits admissible under the provisions of
the Income Tax Act, 1961.
The deferred tax resulting from timing difference between taxable and
accounting income is accounted using the tax rates and laws that are enacted or
substantively enacted as on the balance sheet date. Deferred Tax asset is
recognized and carried forward only to the extent that there is virtual certainty
that the asset will be realized in future.
1.12. Investments in equity instruments at FVTOCI
The quoted and unquoted Equity investments are initially measured at fair value
plus transaction costs. Subsequently, they are measured at fair value with gains
and losses arising from changes in fair value recognized in other comprehensive
income and accumulated in the 'Reserve for equity instruments through other
comprehensive income'. The cumulative gain or loss is not reclassified to profit
or loss on disposal of the investments.
There are no equity investments which are held for trading.
1.13. Cash and cash equivalent
Cash and cash equivalents include cash in hand, bank balances, deposits with
banks (other than on lien] and all short term and highly liquid investments that
are readily convertible into known amounts of cash and are subject to an
insignificant risk of changes in value.
For the purpose of cash flow statement, cash and cash equivalent as calculated
above also includes outstanding bank overdrafts as they are considered an
integral part of the Company's cash management.
1.14. Cash flow statement
Cash flows are reported using the indirect method, where by net profit before tax
is adjusted for the effects of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or payments and item of
income or expenses associated with investing or financing cash flows. The cash
flows from operating, investing and financing activities are segregated.
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