B - MATERIAL ACCOUNTING POLICIES
(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with the Indian Accounting
Standards (referred to as "Ind AS") prescribed under section 133 of the Companies Act, 2013 read with
the Companies (Indian Accounting Standards) Rules as amended from time to time.
(b) Basis of preparation and presentation
The financial statements have been prepared on the historical cost basis except for certain financial
assets & liabilities and defined benefit plans which have been measured at fair value amount. Historical
cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. All assets and liabilities have been
classified as current and non-current as per the Company's normal operating cycle which has been taken
as 12 months. Company's financial statements are presented in Indian Rupees, which is also its functional
currency.
(c) Property, plant and equipment
Freehold land is carried at historical cost. All other items of Property, plant and equipment are stated at
cost, net of trade discount, rebates and recoverable taxes less accumulated depreciation and impairment
losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to
bringing the assets to its working condition for its intended use. Subsequent costs are included in the
asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the entity and the cost can be measured
reliably. Depreciation on property, plant and equipment is provided using straight line method.
Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies
Act, 2013. Gains or losses arising from de-recognition of fixed Assets are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the
statement of profit and loss when the asset is derecognized. The Company has elected to continue with
the carrying value of all of its property, plant and equipment at the transition date and use that carrying
value as the deemed cost of the property, plant and equipment.
(d) Lease hold improvements
The company has taken a piece of land on lease at Meola Maharajpur. The company had constructed a
building on the said land as a factory. Leasehold improvements are carried at historical cost. Such cost
includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its
working condition for its intended use.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the entity and the cost can be measured reliably. Depreciation on leasehold improvements are provided
using straight line method based on management estimate of useful life of the assets.
Gains or losses arising from de-recognition of leasehold improvements are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the
statement of profit and loss when the asset is derecognized.
(e) Intangible assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less
accumulated amortization /depletion and impairment loss, if any. Such cost includes purchase price,
borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the
intended use. Subsequent costs are included in the asset's carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with the item will
flow to the entity and the cost can be measured reliably. Intangible assets are amortized using straight
line method based on management estimate of useful life of the assets.
(f) Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant risk of change in value and having original maturities
of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents
consist of balances with banks which are unrestricted for withdrawal and usages.
(g) Borrowing cost
Borrowings costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use or
sale, are added to the cost of those assets, until such time as the assets are substantially ready for the
intended use or sale.
Investment income earned on temporary investment of specific borrowings pending their expenditure on
qualifying assets is recognised in the statement of profit and loss. Discounts or premiums and expenses on
the issue of debt securities are amortised over the term of the related securities and included within
borrowing costs. Premiums payable on early redemptions of debt securities, in lieu of future finance
costs, are recognised as borrowing costs.
All other borrowing costs are recognised as expenses in the period in which it is incurred.
(h) Inventories
Items of inventories are measured at lower of cost and net realisable value after providing for
obsolescence, if any, except in case of scrap, which is valued at net realisable value. Cost of inventories
comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads net
of recoverable taxes incurred in bringing them to their respective present location and condition. Cost of
raw materials, stores and spares, packing materials, trading and other products are determined on
weighted average basis.
(i) Impairment of property, plant and equipment and intangible assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are
tested annually for impairment or more frequently if events or changes in circumstances indicate that
they might be impaired. Others assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the
purpose of assessing impairment, assets are grouped at the lowest level for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or group of
assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.
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