22.1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
i) Company Overview
Nahar Poly Films Limited CIN:L17115PB1988PLC008820 ('the company') is into the business of manufacturing and
selling of BOPP films. The company is a public limited company incorporated and domiciled in India and has registered
office in Ludhiana, Punjab, India and the manufacturing facility is located Near Mandideep, Bhopal, MP, India. The
company has its listing of equity shares on BSE Limited and National Stock Exchange of India Limited.
The financial statements are approved for issue by the company's Board of Directors on 28-May-2025
ii) 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 Presentation:
i) Compliance with IndAS
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS)as per
Companies Indian Accounting Standard Rules, 2015 notified under section 133 of the Companies Act,2013 (the Act)
and other relevant provisions of the Act.
The Financial statements of the company for the year ended 31st March 2025 have been approved by the Board of
Directors at their meetings held on 28-May-2025
(ii) Accounting Convention
The accounts of the Company have been prepared on going concern basis and historical cost basis except certain
financial assets and liabilities measured at fair value and defined benefit plans-assets measured at fair value.
(iii) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the
requirement of Schedule III, unless otherwise stated.
(iv) Current/Non-current classification
All assets and liabilities have been classified as current or non-current as per Company's normal operating cycle
and other criteria set out in the Schedule III to the Act.
b) Foreign currency translation
Items included in the financial statements of each of the company's entities 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 company's functional and presentation currency.
Foreign currency translations are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
generally recognised in the Statement of profit and loss.
c) Revenue recognition
(i) Revenue arises mainly from the sale of manufactured and traded goods.
To determine whether to recognise revenue, the Company follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is measured at fair value of consideration received or receivable, after deduction of any trade discounts,
volume rebates and any taxes or duties collected on behalf of the government which are levied on sales such as goods
and service tax, etc.
Revenue is recognised either at a point in time or over time, when (or as) the Company satisfies performance obligations
by transferring the promised goods or services to its customers
Sale of goods
Revenue from sale of goods is recognised when the control of goods is transferred to the buyer as per the terms of the
contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.
Control of goods refers to the ability to direct the use of and obtain substantially all of the remaining benefits from goods.
Rendering of services
Revenue from services is recognised as and when the services are rendered and on the basis of contractual terms with the
parties.
(ii) Export Incentives- Export incentives are recognised on post export basis.
(iii) Interest income - Interest income is recognised on accrual basis.
(iv) Dividend income - Dividends are recognised in profit or loss only when the right to receive payment is established
(v) Rental Income- Rental income is accounted for on accrual basis.
(vi) Scrap (i.e empties, miscellaneous scrap etc. ) is accounted for on sale basis.
(vii) Income and other Claims -Revenue in respect of claims is recognised when no Significant uncertainty exists with
regard to the amount to be realised and ultimate Collection thereof.
d) Government Grants:
Grants from the government are recognised at their fair value when there is a reasonable assurance that the grant
will be received and the company will comply with all attached conditions.
Government grant relating to income are deferred and recognised in the profit or loss over the period necessary to
match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to purchase of property, plant and equipment are included in non-current liabilities as
deferred income and are credited to profit or loss over the expected lives of the related assets and presented within
other income.
e) Income Tax:
The income tax expense or credit for the period is the tax payable on the current period's taxable income based on
the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
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 same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the Statement of profit and loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In that case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
f) Trade Receivables:
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment.
g) Cash and cash Equivalents:
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
other bank balances, and bank overdrafts.
h) Inventories
Inventories are valued at cost or net realizable value, whichever is lower. However to determine the cost, the
following methods are adopted:-
1. a) For Raw Material on moving weighted average method plus direct expenses.
b) For Stores and Spares on moving weighted average method plus direct expenses.
c) For Work-in-Process, cost of Raw Material plus appropriate share of manufacturing expenses / relevant
Overheads / conversion cost depending upon the stage of completion.
2. For Finished goods, cost of raw material plus conversion costs, packing cost and other overheads incurred to bring
the inventories to their present condition and location.
3. Further Wastage and Rejections are valued at net realizable value only.
4. Goods in Transit are valued at cost.
i) INVESTMENT AND OTHER FINANCIAL ASSETS
I) Classification
The company classifies its financial assets in the following measurement categories -
- Those to be measured subsequently at fair value (either through other comprehensive income or through
Statement of profit and loss), and
- Those measured at amortised cost
The classification depends on the company's business model for managing the financial assets and the contractual
terms of cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive
income. For investments in debt instruments, this will depend on the business model in which the investment is held.
For investments in equity instruments, this will depend on whether the company has made an irrevocable election at
the time of initial recognition to account for the equity investment at the fair value through other comprehensive
income
ii) Measurement
At initial recognition, the company measures a financial asset at its fair value plus transaction cost that are directly
attributable to the acquisition of the financial asset. In the case of a financial asset at fair value through profit or loss,
transaction costs of financial assets are expensed in the Statement of profit and loss.
The company subsequently measures all equity investments at fair value. Where the company's management has
elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of
fair value gains and losses to profit or loss.
iii) Impairment of financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less cost of disposal and its value in use.
The company assesses on a forward looking basis the expected credit losses associated with its assets carried at
amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has
been a significant increase in credit risk.
For trade receivables only, the company 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.
iv) De-recognition of Financial Assets:
Financial asset is derecognised only when
- The company 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.
v) Income Recognition:
Interest income - Interest income from debt instruments is recognised using the effective interest rate method.
Dividend income -Dividends are recognised in profit or loss only when the right to receive payment is established.
Rental Income - Rental income is accounted for on accrual basis.
Scrap (i.e. empties, wastage etc. Other than production ) is accounted for on sale basis.
j) Impairment of Non-Financial assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable amount. The recoverable amount is 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 levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from assets or group of assets
(cash-generating units). Non-Financial assets suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
k) Non- Current Assets Held for Sale:
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use and sale is considered highly probable. They are measured at lower
of their carrying amount and fair value less cost to sell, except for assets such as deferred tax assets, assets arising
from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically
exempt.
Non-current assets are not depreciated or amortised while they are classified held for sale. Interest and other
expenses attributable to the liabilities of disposal, company classified as held for sale, continue to be recognised.
l) Derivatives that are not designated as hedges
The company enters into certain derivatives/forward contracts to hedge foreign currency risks which are not
designated as hedges. Such contracts are accounted for at fair value through profit or loss.
m) Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment if any. Cost directly
attributable to acquisition are capitalised until the property, plant and equipment are ready for use.
Depreciation methods, estimated useful lives and residual value
The company depreciates its property, plant and equipment over the useful life in the manner prescribed in the
Schedule II to the Companies Act, 2013. The residual values are not more than 5% of the original cost of the assets.
n) Intangible assets
Computer software
Computer software are stated at cost, less accumulated amortisation and impairment ,if any.
Amortisation methods and periods
The company amortises the computer software with a finite useful life over the period of 5 years.
o) Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of financial year
which are unpaid. The amounts are unsecured.
p) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using effective interest method.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
q) Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are
capitalized as part of the cost of the asset. Other borrowing costs are recognized as an expense in the period in which
they are incurred.
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