B Significant accounting policies
Significant accounting policies adopted by the company are as under:
(a) Basis of Preparation of Financial Statements
(i) Statement of Compliance with Ind AS
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified by
Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (the "Act") read with the Companies
(Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
Accounting policies have been consistently applied to all the years presented except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy
hitherto in use.
(ii) Basis of measurement
The financial statements have been prepared on a historical cost convention on accrual basis, except certain financial assets
and liabilities measured at fair value.
(iii) Current and non current classification
All assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle and
other criteria set out in Schedule III to the Act.
(b) Use of estimates
The preparation of financial statements in conformity with Ind AS requires the management to make estimate and assumptions
that affect the reported amount of assets and liabilities as at the Balance Sheet date, reported amount of revenue and expenses
for the year and disclosures of contingent liabilities as at the Balance Sheet date. The estimates and assumptions used in the
accompanying financial statements are based upon the management's evaluation of the relevant facts and circumstances as
at the date of the financial statements. Actual results could differ from these estimates. Estimates and underlying assumptions
are reviewed on a periodic basis. Revisions to accounting estimates, if any, are recognized in the year in which the estimates are
revised and in any future years affected.
(c ) Property, plant and equipment
The Company had applied for the one time transition exemption of considering the carrying cost on the transition date i.e. 1st
April, 2016 as the deemed cost under IND AS. Hence regarded thereafter as historical cost.
Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
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 and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All
other repairs and maintenance are charged to Statement of Profit and Loss during the year in which they are incurred.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified
as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under
'Capital work-in-progress.
Depreciation methods, estimated useful lives
The Company depreciates property, plant and equipment over their estimated useful lives using the straight line method.
The estimated useful lives of assets are taken as prescribed useful lives under Schedule II to the Companies Act, 2013. The
management believes that such estimated useful lives are realistic and reflect fair approximation of the period over which the
assets are likely to be used.
Depreciation on addition to property plant and equipment is provided on pro-rata basis from the date of acquisition. Depreciation
on sale/deduction from property plant and equipment is provided up to the date preceding the date of sale, deduction as the
case may be. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
Statement of Profit and Loss under 'Other Income'.
(d) Investment properties
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment
properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
(e) Intangible Assets
Intangible assets are stated at acquisition cost, net of accumulated amortization.
The Company has amortized intangible assets over their estimated useful lives using the straight line method. The estimated
useful lives of intangible asset is 10 years.
(f) Investments in subsidiaries , associates
Investments in subsidiaries , associates are recognised at fair value.
(g) Borrowing cost
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are
expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the
borrowing costs.
(h) Foreign Currency Transactions
(a) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which
the entity operates ('the functional currency'). The financial statements are presented in Indian rupee (INR), which is the
Company's functional and presentation currency.
(b) Transactions and balances
On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the
exchange rate between the functional currency and the foreign currency at the date of the transaction. Gains/Losses
arising out of fluctuation in foreign exchange rate between the transaction date and settlement date are recognised in the
Statement of Profit and Loss.
All monetary assets and liabilities in foreign currencies are restated at the year end at the exchange rate prevailing at the
year end and the exchange differences are recognised in the Statement of Profit and Loss. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial
transactions."
(i) Financial Instruments.
Fair value measurement
The Company has valued financial assets and Financial Liabilities, at fair value. Impact of fair value changes as on date of
transition, is recognised in opening reserves and changes there after are recognised in Statement of Profit and Loss Account or
Other Comprehensive Income, as the case may be.
Financial Assets
The company classifies its financial assets as those to be measured subsequently at fair value ( either through other comprehensive
income or through Profit or loss) and those to be measured at amortised cost.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable to transaction costs.
(j) Revenue Recognition
The company derives revenues primarily from sale of manufactured goods, traded goods, job work and related services.
Revenue is recognised when the amount of revenue can be reliably measured, it is probable that future economic benefits will
flow to the entity and specific criteria have been met for each of the companys activities as described below:
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable
consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of
variable consideration on account of various discounts and schemes offered by the company as part of the comtract.
Sale of products:
Revenue from sale of products is recognised when significant risks and rewards in respect of ownership of products are transferred
to customers based on the terms of sale. Revenue from sales is based on the price specified in the sales contracts, net of all
discounts, returns and goods & service tax at the time of sale.
(k) Taxes
Tax expense for the year, comprising current tax and deferred tax, are included in the determination of the net profit or loss for
the year.
(a) Current income tax
Current tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities in
accordance with the relevant prevailing tax laws. Tax expenses relating to the items in profit & loss account shall be treated
as current tax as part of profit and loss and those relating to items in other comprehensive income shall be recognised as
part of OCI.
(b) Deferred tax
Deferred income tax is recognised for all the temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in financial statements. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the end of the year and are expected to apply when the related deferred income
tax asset is realised or the deferred income tax liability is settled.
At each balance sheet , the company re-assesses unrecognised deferred tax asets, if any, and the same is recognised to
the extent it has become probable that future taxable profit will allow the deffered tax asset to be recovered. Deferred tax
assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when
the deferred tax balances relate to the same taxation authority."
(l) Assets classified as held for sale
The Company classifies non-current assets (or disposal group) as held for sale if their carrying amounts will be recovered
principally through a sale rather than through continuing use.
Non-current assets (or disposal group) held for sale are measured at the lower of their carrying amount and the fair value less
costs to sell. Assets and liabilities (or disposal group) classified as held for sale are presented separately in the balance sheet.
Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized.
(m) Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as a lessee are
shown as other non current assets . Payments made under operating leases (net of any incentives received from the lesser) are
charged to Statement of Profit and Loss on a straight-line basis over the period of the lease .
(n) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
Raw materials, finished goods, semi finished goods, trading goods and stores and spare parts are valued at lower of cost and
net realizable value. Cost includes purchase price, (excluding taxes those subsequently recoverable by the enterprise from the
concerned revenue authorities), freight inwards and other expenditure incurred in bringing such inventories to their present
location and condition. Fent, rags and rejections are stated at net realisable value. In determining the cost, FIFO method is used.
(o) Impairment of assets
The carrying value of assets / cash generating units at the Balance Sheet date are reviewed for impairment, if any indication of
impairment exists. If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised
for such excess amount. The impairment loss is recognied for such excess amount.
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