2. Significant Accounting Policies
i) Property, Plant and Equipment
Property, plant and equipment (PPE) are stated at cost of acquisition or deemed cost on the date of transition less accumulated depreciation and
impairment losses, if any. Cost of an asset comprises of cost of acquisition or construction and includes, where applicable, inward freight, duties
and taxes, installation expenses, professional fees, borrowing costs, initial estimates of the cost of dismantling, cost of replacing parts of the proper¬
ty, plant and equipments and other costs directly attributable to the bringing the asset to the location and condition necessary for it to be capable
of operating in the intended manner and purposes. Capital Spare parts which are integral part of the plant and equipment are capitalized.
When significant parts of plant and equipment are required to be replaced at intervals, the same are capitalized and old component is derecognized.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of
property, plant and equipment.
Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
Bearer Plants comprising of matured plants are stated at cost and disclosed under Property, plant & Equipment. The company recognised the
bearer plants at fair value and have used such fair value as cost.
o The residual value of assets has been considered as five percent of the original cost of the assets as per Schedule II of the Act.
o Depreciation is provided on pro-rata basis on additions and deletions of Property, Plant and Equipment during the year.
o In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
o Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.
ii) Intangible Assets
Intangible assets are stated at cost comprising of purchase price inclusive of duties and taxes, where applicable, less accumulated amount of
amortization and impairment losses. Such assets, are amortized over the useful life using straight line method and assessed for impairment
whenever there is an indication of the same.
The Company currently have intangible asset by way of Ferry Right.
iii) De-recognition of Tangible and Intangible Assets
An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to arise from its use or disposal. Gain or
loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sale proceeds and the carrying
amount of the asset and is recognized in the Statement of Profit and Loss.
iv) Investment properties
Investment Property is property (comprising land or building or both) held to earn rental income or for capital appreciation or both, but not for sale in
ordinary course of business, use in the production or supply of goods or services or for administrative purposes.
Any gain or loss on disposal of investment property is determined as the difference between net disposal proceeds and the carrying amount of the
property and is recognized in the statement of profit and loss.
The depreciable investment property i.e., buildings, are depreciated on a straight line method at a rate determined based on the useful life as
provided under Schedule II of the Act.
Investment properties are derecognized either when they have been disposed of or when they are permanently withdrawn from the use and no future
economic benefit is expected from their disposal. The net difference between the net disposal proceeds and the carrying amount of the asset is
recognized in profit or loss in the period of de-recognition.
v) Impairment of Tangible and Intangible Assets
Tangible and Intangible assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,
recoverable amount of assets is determined. An impairment loss is recognized in the statement of profit and loss, whenever the carrying amount of
assets either belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the higher of assets
fair value less cost of disposal and its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discount¬
ed to their present value at appropriate rate.
Impairment losses recognized earlier may no longer exist or may have come down. Based on such assessment at each reporting period the
impairment loss is reversed and recognized in the Statement of Profit and Loss. In such cases the carrying amount of the asset is increased to the
lower of its recoverable amount and the carrying amount that have been determined, net of depreciation, had no impairment loss been recognized
for the asset in prior years.
vi) Biological Assets other than Bearer Plant
Biological assets other than bearer plants are measured at fair value less estimated costs to sell. Changes in fair value are recognized in the
Statement of Profit and Loss.
The fair value of these assets excludes the land upon which the crops are planted or the items of PPE utilized in the upkeep of planted areas.
For biological assets other than bearer plants, where biological transformation has taken place since the initial cost was incurred (for example
seedlings planted immediately before the balance sheet date), such biological assets other than bearer plants are measured at cost i.e. the total
expenses incurred on such plantation up to the balance sheet date.
vii) Financial Assets and Liabilities
Financial assets and financial liabilities (financial instruments) are recognized when Company becomes a party to the contractual provisions of the
instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the Statement of Profit and Loss.
The financial assets and financial liabilities are classified as current if they are expected to be realised or settled within operating cycle of the company
or otherwise these are classified as non- current.
The classification of financial instruments whether to be measured at Amortized Cost, at Fair Value Through Profit and Loss (FVTPL) or at Fair Value
Through Other Comprehensive Income (FVTOCI) depends on the objective and contractual terms to which they relate. Classifications of financial
instruments are determined on initial recognition.
a) Cash and cash equivalents
All highly liquid financial instruments, which are readily convertible into determinable amounts of cash and which are subject to an insignificant risk
of change in value and are having original maturities of three months or less from the date of purchase, are considered as cash equivalents. Cash
and cash equivalents includes balances with banks which are unrestricted for withdrawal and usage.
b) Financial Assets and Financial Liabilities measured at amortized cost
Financial Assets held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms
of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
are measured at amortized cost.
The above Financial Assets and Financial Liabilities subsequent to initial recognition are measured at amortized cost using Effective Interest Rate
(EIR) method.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts (including all fees and points paid or received,
transaction costs and other premiums or discounts) through the expected life of the Financial Asset or Financial Liability to the gross carrying amount
of the financial asset or to the amortized cost of financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recogni¬
tion.
c) Financial Asset at Fair Value through Other Comprehensive Income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective
is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Subsequent to initial recognition, they are
measured at fair value and changes therein are recognized directly in other comprehensive income.
For the purpose of para (b) and (c) above, principal is the fair value of the financial asset at initial recognition and interest consists of consideration
for the time value of money and associated credit risk.
d) Financial Assets or Liabilities at Fair value through profit or loss
Financial Instruments which do not meet the criteria of amortized cost or fair value through other comprehensive income are classified as Fair Value
through Profit or loss. These are recognized at fair value and changes therein are recognized in the statement of profit and loss.
viii) Impairment of financial assets
A financial asset is assessed for impairment at each reporting date. A financial asset is considered to be impaired if objective evidence indicates that
one or more events have had a negative effect on the estimated future cash flows of that asset.
The company measures the loss allowance for a financial assets at an amount equal to the lifetime expected credit losses if the credit risk on that
financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since
initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.
However, for trade receivables or contract assets that result in relation to revenue from contracts with customers, the company has not opted to
measures the loss allowance at an amount equal to lifetime expected credit losses.
ix) De-recognition of financial instruments
The Company de-recognizes a financial asset or a group of financial assets when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
On de-recognition of a financial asset (except for equity instruments designated as FVTOCI), the difference between the asset’s carrying amount and
the sum of the consideration received and receivable are recognized in statement of profit and loss.
On de-recognition of assets measured at FVTOCI the cumulative gain or loss previously recognised in other comprehensive income is reclassified
from equity to profit or loss as a reclassification adjustment.
Financial liabilities are derecognized if the Company’s obligations specified in the contract expire or are discharged or cancelled. The difference
between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in Statement of Profit and
Loss.
x) Inventories
Inventories are valued at lower of the cost or estimated net realizable value. Cost of inventories is ascertained on ‘Average Cost Method” basis.
Materials and other supplies held for use in the production of inventories are not written down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost.
Cost in respect of raw materials and stores and spares includes expenses incidental to procurement of the same.
Cost in respect of finished goods and those under progress represents prime cost, and includes appropriate portion of overheads and excise duty.
xi) Foreign Currency Transactions
Presentation Currency:
These financial statements are presented in Indian Rupee, the national currency of India, which is the functional currency of the company.
Transactions and Balances:
Transactions in foreign currencies are translated into the functional currency at the exchange rates prevailing on the date of the transactions. Foreign
currency monetary assets and liabilities at the year-end are translated at the year-end exchange rates. Non-monetary items which are carried in terms
of historical cost denominated in a foreign currency are reported using the exchange rate at the date of transaction. Foreign exchange gain/loss to
the extent considered as an adjustment to Interest Cost are considered as part of borrowing cost. The loss or gain thereon and also on the exchange
differences on settlement of the foreign currency transactions during the year are recognized as income or expense in the profit and loss account.
xii) Equity Share Capital
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Par value of the
equity shares is recorded as share capital and the amount received in excess of par value is classified as Securities Premium.
Costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.
|