B. MATERIAL ACCOUNTING POLICIES
i. Statement of compliance
The Company's financial statements have been prepared in accordance with the provisions of the Companies Act,
2013 and the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards)
Rules, 2015 and amendments thereto issued by Ministry of Corporate Affairs under section 133 of the Companies
Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India
(ICAI) are also applied except where compliance with other statutory promulgations require a different treatment.
ii. Basis of Preparation
The financial statements have been prepared on accrual basis and under the historical cost convention except for
certain financial instruments which are measured at fair value at the end of each reporting period, as explained in
the accounting policies mentioned below.
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle
and other criteria set out in Schedule III to the Companies Act, 2013. The Company has ascertained its operating
cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash
equivalents.
Functional and presentation currency
These separate financial statements are presented in Indian rupees, which is the Company's functional currency. All
amounts have been rounded to the nearest Rupees in lacs unless otherwise indicated.
iii. Use of Estimates, Judgments and Assumptions
The preparation of financial statements in accordance with Ind AS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amount of assets,
liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimates are revised and in any future periods affected.
All the assets and liabilities have been classified as current or non-current as per the company's normal operating
cycle of twelve months and other criteria set out in Schedule III to the Companies Act, 2013.
Significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have
significant effect on amount recognized in the financial statements are:
i. Allowance for bad and doubtful trade receivable.
ii. Recognition and measurement of provision and contingencies.
iii. Depreciation/Amortisation and useful lives of Property, plant and equipment / Intangible Assets.
iv. Recognition of deferred tax asset & liability
v. Income Taxes.
vi. Measurement of defined benefit obligation.
vii. Impairment of Non-financial assets and financial assets.
viii. Fair value of financial instruments
iv. Revenue
Recognition
The company recognised revenue i.e. account for a contract with a customer only when all of the following criteria
are met:
(a) the parties to the contract have approved the contract (in writing, orally or in accordance with other customary
business practices) and are committed to perform their respective obligations;
(b) the entity can identify each party's rights regarding the goods or services to be transferred;
(c) the entity can identify the payment terms for the goods or services to be transferred.
(d) the contract has commercial substance (ie the risk, timing or amount of the entity's future cash flows is expected
to change as a result of the contract); and
(e) it is probable that the entity will collect the consideration to which it will be entitled in exchange for the goods
or services that will be transferred to the customer. In evaluating whether collectability of an amount of
consideration is probable, an entity shall consider only the customer's ability and intention to pay that amount
of consideration when it is due. The amount of consideration to which the entity will be entitled may be less
than the price stated in the contract if the consideration is variable because the entity may offer the customer a
price concession.
Measurement
When (or as) a performance obligation is satisfied, company recognise as revenue the amount of the transaction
price (which excludes estimates of variable consideration that are constrained) that is allocated to that
performance obligation.
The transaction price is the amount that the entity expects to be entitled to in exchange for transferring
promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example,
some taxes on sales). The consideration promised may include fixed amounts, variable amounts, or both.
i) Sale of goods
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the
consideration which the Company expects to receive in exchange for those goods. Revenue from the sale of goods
is recognised at the point in time when control is transferred to the customer which is usually on dispatch / delivery
of goods, based on contracts with the customers. Revenue is measured based on the transaction price, which is the
consideration, adjusted for volume discounts, price concessions, incentives, and returns, if any, as specified in the
contracts with the customers. Revenue excludes taxes collected from customers on behalf of the government. Due
to the short nature of credit period given to customers, there is no financing component in the contract.
ii) Sale of Services
Revenue from services rendered is recognised as the services are rendered and is booked based on agreements/
arrangements with the concerned parties.
iii) Interest and Dividend
Interest income is recognized on accrual basis using the effective interest method. Dividend income is recognised in
profit or loss on the date on which the company's right to receive payment is established.
v. Inventories
Inventories are valued at lower of cost and net realizable value, except by-product/scrap is valued at net realizable
value. Cost of inventory is arrived at by using Weighted Average Price Method. Cost of inventory is generally
comprises of cost of purchases, cost of conversion and other cost incurred in bringing the inventories to their present
location and condition.
vi. Property, Plant and Equipment
a. Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated
impairment losses (if any). Freehold land is measured at costs.
The cost of an item of property, plant and equipment comprisesits purchase price, including import duties and
non-refundable purchase taxes, after deducting trade discounts and rebates, acquisition or construction cost
including borrowing costs, any costs directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management, initial estimate of the costs
of dismantling and removing the item and restoring the site on which it is located.
Items such as spare parts, stand-by equipments and servicing that meets the definition of property, plant and
equipment are capitalised at cost and depreciated over the useful life.
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit or loss.
The Company has opted to elect to continue with the carrying value for all of its property, plant and equipment
as recognized in the financial statements as at the date of transition to IND AS, measured as per the previous
GAAP and use that as its deemed cost as at the date of transition i.e. 1st April 2016.
b. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with
the item will flow to the company and cost of the item can be measured reliably.
c. Depreciation
Depreciation on property, plant and equipment is provided using Written down value method (WDV) on
depreciable amount as per the useful life of the assets in the manner as specified in Schedule II to the
Companies Act, 2013. The estimated useful life of assets and estimated residual value is taken as prescribed
under Schedule II to the Companies Act, 2013. Depreciation on additions during the year is provided on pro
rata basis with reference to date of addition/installation. Depreciation on assets disposed/discarded is charged
up to the date on which such asset is sold.
The estimated useful lives, residual value and depreciation method are reviewed at the end of each balance sheet
date, any changes therein are considered as changes in estimate and accordingly accounted for prospectively.
d. Biological Assets
Biological assets are classified as Bearer biological assets and Consumable biological assets. Bearer Biological
Assets which are held to bear agricultural produce are classified as Bearer plants. Consumable biological assets
are those that are to be harvested.
Bearer plants are recognised under Property, Plant and Equipment on fulfilment of the following condition :
1. Is used in the production or supply of agricultural produce;
2. Is expected to bear produce for more than one period; and has a remote likelihood of being sold as
agricultural produce, except for incidental scrap sales.
Pomegranate Plants are recognised as Bearer biological assets. These are classified as mature Bearer Plants
and Immature Bearer Plants. Mature Bearer Plants are those that have attained harvestable stage. Cost
incurred for new plantations and immature areas are capitalised. Cost includes cost of land preparation,
new planting and maintenance till maturity. The cost of areas coming into bearing is transferred to mature
plantations and depreciated over their estimated useful lives. Pomegranate Plants attain a harvestable
stage in about 1.5 years.
Bearer biological assets are carried at cost less accumulated depreciation and accumulated impairment
loss, if any. Subsequent expenditure on bearer assets are added to its book value 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. Mature bearer plants are depreciated over their estimated useful life. Immature
bearer plants are tested for impairment/obsolescence. The estimated useful life of mature bearer plants are
approx. 24 years.
e. Capital Work In progress
Assets under erection/installation are shown as "Capital work in progress", Expenditure during construction
period are shown as "pre-operative expenses" to be capitalized on erection/installations of the assets.
vii. Intangible Assets
Identifiable intangible assets are recognised when it is probable that future economic benefits attributed to the asset
will flow to the Company and the cost of the asset can be reliably measured. Gains or losses arising from
derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.
Recognition and measurement
Computer software's and Jetty rights have finite useful lives and are measured at cost less accumulated amortisation
and any accumulated impairment losses.
Subsequent expenditure
Subsequent expenditure is capitalised only when it future economic benefits embodied in the specific asset to
which it relates flow to the company and cost can be measured reliably. All other expenditure, including
expenditure on internally generated goodwill and brands, when incurred is recognised in statement of profit or loss.
Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the
straight-line method over their estimated useful lives and is generally recognised in statement of profit or loss.
Computer software are amortised over their estimated useful life of 5 years. Jetty Rights are amortised over the life
mentioned in the agreement entered with Gujarat Maritime Board.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted, if required.
viii. Employee benefits
i. Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the company has a present legal or constructive obligation to pay this amount as
a result of past service provided by the employee and the obligation can be estimated reliably.
ii. Defined benefit plans
The liability for gratuity a defined benefit plan is determined annually by a qualified actuary using the projected
unit credit method. '
The company pays gratuity to the employees who have completed five years of service with company at the
time when the employee leaves the company as per the payment of gratuity act 1972.
The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity
payment to the employees.
Remeasurement of the net defined benefit plans in respect of post-employment are charged to other
comprehensive income. Net interest expense and other expenses related to defined benefit plans are
recognised in statement of profit and loss.
iii. Other employee benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in
which the employee renders the related services are recognized as a liability at the present value of obligation
as at the Balance sheet date determined based on an actuarial valuation.
iv. Defined Contribution Plan
The company's payments to the defined contribution plans are recognized as expenses during the period in
which the employees perform the services that payment covers. Defined contribution plan comprise of contribution
to the employees' provident fund with government, Employees' State Insurance and Pension Scheme.
ix. Income Tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that
it relates to other comprehensive income or a business combination, or items recognised directly in equity.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or
substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if, the Company:
a) has a legally enforceable right to set off the recognised amounts; and
b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
ii. Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are
generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets and liabilities arereviewed at the end of each reporting period.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India,
which is likely to give future economic benefits in the form of availability of set off against future income tax
liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be
measured reliably, and it is probable that the future economic benefit associated with the asset will be realised.
Deferred tax assets and liabilities are offset only if:
a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation
authority on the same taxable entity.
x. Foreign currency transactions
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the
exchange rate at the reporting date. Difference arising on settlement of monetary items are recognised in statement
of profit and loss except to the extent of exchange differences which are regarded as an adjustment to interest costs
on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets
which are capitalized as cost of assets.
Non-monetary items that are measured based on historical cost in a foreign currency are recorded using the
exchange rates at the date of the transaction. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange rate when the fair value was determined.
Exchange difference arising out of these transactions are generally recognised in statement of profit and loss.
xi. Cash and Cash Equivalent
Cash and cash equivalent includes the cash and Cheques in hand, bank balances, demand deposits with bank and
other short term, highly liquid investments with original maturity of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value.
Bank overdraft are shown within borrowings in current liabilities in the balance sheet and forms part of financing
activities in the cash flow statement. Book overdraft are shown within other financial liabilities in the balance sheet
and forms part of operating activities i n the cash flow statement.
xii. Cash Flow Statement
Cash flows are reported using indirect method, whereby profit/(loss) before tax is adjusted for the effect of
transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments and items of
income or expenses associated with investing or financing cash flow. The cash flow from operating, investing and
financing activities of the company is segregated based on the available information.
xiii. Earning Per Share
i. Basic earnings per shares is arrived at based on net profit/ (loss) after tax available to equity shareholders
divided by Weighted average number of equity shares, adjusted for bonus elements in equity shares issued
during the year (if any) and excluding treasury shares.
ii. Diluted earnings per shares is calculated by dividing Profit attributable to equity holders after tax divided by
Weighted average number of shares considered for basic earning per shares including potential dilutive equity
shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been
actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential
equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Potential
ordinary shares shall be treated as dilutive when, and only when, their conversion to ordinary shares would
decrease earnings per share or increase loss per share from continuing operations.
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