1) STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES:
A) Basis of preparation of financial statements
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act , 2013 (‘Act’) (to the extent notified) and guidelines issued by the Securities Exchange of India [SEBI]. The Ind AS as prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) amendment rules 2016.
Accounting policies have been consistently applied 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.
B) use Of Estimates and Judgments
The preparation of financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of financial statements and reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in accordance with the requirement of the respective accounting standard. Changes in estimates are reflected in the financial statements in the period in which changes are made and , if material, their effects are disclosed in the notes to the Financial Statements.
C) Other Intangible Assets
Intangible Assets are stated at cost less accumulated amortisation and impairment. Intangible Assets are amortized over their respective individual estimated useful lives on a straight line basis from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on number of factors including the effects of obsolescence, demand, competition and other economic factors. Amortisation methods and useful lives are reviewed periodically including at each financial year end.
D) Capital work-in-progress and intangible assets under development
Capital work-in-progress/intangible assets under development are carried at cost, comprising direct cost, related incidental expenses and attributable borrowing cost
E) Financial Instruments
a) Initial Recognition
The Company recognizes the Financial asset and Financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted at trade date.
b) Subsequent Measurement
a) Non Derivative Financial Instrument
i) Financial Assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset 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.
ii) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model 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. The company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.
iii) Financial assets at fair value through profit or loss
A financial asset, which is not classified in any of the above categories, is subsequently fair valued through profit or loss.
iv) Financial Liabilities
Financial liabilities are subsequently carried at amortized cost using effective interest method, except for contingent consideration recognized in a business combination, which is subsequently measured at fair value through profit or loss. For trade and other payables maturing within one year from the Balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
v) Investment in Subsidiaries
Investments are stated at cost in accordance with Ind AS 27- Separate Financial statements.
vi) Offsetting of financial Instruments
Financial assets and financial liabilities are off set and the net amount is reported in financial statements if there is a currently enforceable legal right to off set the recognized amounts and there is an intention to settle on a net basis to realize the assets and settle the liabilities simultaneously.
F) Accounting of provisions, contingent liabilities, and contingent assets
A provision is recognized if as a result of past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is possible obligation or present obligation that may, but probably will not require an outflow of resources. Where there is a possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote no provision or disclosure is made.
G) Income Taxes Provision For Taxation
Provision is made for income tax annually based on the tax Liability computed after considering Tax allowance and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.
DEFERRED TAX
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred tax asset in the nature of unabsorbed depreciation and loses are recognized only if there is virtual certainty of realization.
H) Revenue Recognition
Revenue from sale of products are recognized on dispatch of goods to customers net of Sales Tax, GST, discounts, rebates for price adjustments, rejections and shortage in transit.
I) Foreign Currency Functional Currency
The functional currency of the company is Indian Rupee. These financial statements are presented in Indian rupees.
TRANSACTIONS AND TRANSLATIONS
Foreign currency denominated monetary assets and liabilities are translated into the relevant functional currency at the exchange rates in effect at the Balance Sheet date. The gains or losses resulting from such transactions are included in the Statement of Profit and Loss. Non-monetary assets and Non - monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non - monetary assets and non - monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
Revenue, Expenses and Cash flow items denominated in foreign currencies are translated into relevant functional currencies using the exchange rate in effect on the date of the transaction.
J) Retirement benefits
The company’s liability towards retirement benefits in the form of provident fund is full funded and charged to revenue expenditure. The company contribute to the employee provident fund maintained under the employee’s provident fund scheme run by the central government. The gratuity liability is provided and charged off as revenue expenditure based on actuarial valuation. The company has subscribed to the group gratuity scheme policy of LIC of India. Un availed encashable earned leave is accounted on accrual basis.
K) Earnings Per Share
Basic earnings per share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
L) Cash flow Statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing, and financing activities of the Company are segregated.
M) Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management. The company depreciates the property, plant and equipment over their estimated useful lives using the straight line method.
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.
Advances paid towards the acquisition of property, plant and equipment outstanding at
each Balance sheet date is classified as capital advances under the non current assets and the cost of the assets not ready not ready for use before such date are disclosed under capital work in progress. Subsequent expenditures relating to property, plant and equipment are capitalized only when it is probable that future economic benefits associated with these will flow to the company and the cost of the item can be measured reliably. Repairs and Maintenance costs are recognized in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon the sale or retirement of the asset and the resultant gains or losses are recognized in the statement of Profit and Loss.
N) Recent Accounting Pronouncement
Appendix B to Ind AS 21, Foreign Currency Transactions and Advance Consideration: On March 28, 2018 the Ministry of Corporate Affairs (the MCA) notified the companies (Indian Accounting Standards) Amendment Rules 2018 containing Appendix B to Ind AS 21, Foreign Currency Transactions and Advance Consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or Income, when an entity has received or paid advance consideration in a foreign currency.
The amendment will come into force from April 1, 2018. The company has evaluated the effect of this on the financial statements and the impact is not material.
Ind AS 115, Revenue from Contract with Customers: On March 28, 2018 the MCA notified the Ind AS 115. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Further, the disclosure requirement of the new standard is for an entity to disclose sufficient information to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.
The standard permits an entity can elect to adopt the new standard in a new variety of ways, including retrospectively with or without optional practical expedient or through cumulative effect adjustment as of the start of the first period for which it applies the new standard.
O) 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 consists of balances with banks which are unrestricted for withdrawal and usage.
P) Inventories
Valuations of inventories are at the lower of cost and net realizable value. Cost of the inventories are computed on a weighted average / FIFO basis
Raw materials including stores and spares valued at lower of cost and net realizable value
Work in progress valued at lower of cost and net realizable value.
Work in progress includes costs incurred up to the stage of completion.
Finished goods valued at lower of cost and net realizable value.
Finished goods include cost of conversion and cost incurred for bringing the same to location.
Q) Segment Reporting Policies
Identification of segments:
The Company’s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.
Intersegment Transfers:
The Company generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.
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