E SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(i) Revenue from contract with customers
Company has adopted Ind AS 115 "Revenue front Contract With Customers" starting April 01, 2018. Revenue from
contract with customers is recognised when the Company satisfies performance obligation by transferring promised
goods and services to the customer. Performance obligations are satisfied at a point of time. Performance obligations are
said to be satisfied at a point of time when the customer obtains controls of the asset.
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration
received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when the significant
risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the
associated costs and possible return of goods can be estimated reliably, there is no continuing effective control over, or
managerial involvement with, the goods, and the amount of revenue can be measured reliably.The timing of transfers of
risks and rewards varies depending on the individual terms of sale, usually in case of domestic, such transfer occurs when
the product is sold on ex-works; however, for exports transfer occurs upon loading the goods onto the relevant carrier at
the port of seller. Generally for such products buyer has no right to return.
(ii) Foreign currency transactions and translation
The financial statements of the Company is presented in 1NR. which is the functional currency of the Company and the
presentation currency for the financial statements.
In preparing the financial statements of the Company, transactions in currencies other than the entity’s functional
currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting
period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the
reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not
translated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in
the statement of profit and loss for the period.
(iii) Property, plant and equipment
An item of property, plant and equipment is recognised as an asset if it is probable that future economic benefits
associated with the item will flow to the Company and its cost can be measured reliably. This recognition principle is
applied to the costs incurred initially to acquire an item of property, plant and equipment and also to costs incurred
subsequently to add to. replace part of. or service it. All other repair and maintenance costs, including regular servicing,
are recognised in the statement of profit and loss as incurred. When a replacement occurs, the carrying amount of the
replaced part is de-recognised.
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment. Cost includes all direct
costs and expenditures incurred to bring the asset to its working condition and location for its intended use. Trial run
expenses (net of revenue) are capitalised. Borrowing costs during the period of construction are added to the cost of
eligible tangible assets.
Gain or loss arising on disposal of an asset is determined as the difference between the sale proceeds and the carrying
amount of the asset, and is recognised in the statement of profit and loss.
(iv) Depreciation and amortization of property, plant and equipment and intangible assets
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life and is provided on
written down value basis over the useful life as prescribed in Schedule II of the Companies Act, 2013 unless otherwise
specified. Depreciable amount for the assets is the cost of an asset less its estimated residual value. Depreciation on
addition to/deductions from fixed assets is provided on pro rata basis from/to the date of acquisition/disposal.
Depreciation on assets under construction commences only when the assets are ready for their intended use.
(v) Financial Instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions
of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition
of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and
financial liabilities at fair value through profit and loss are immediately recognised in the statement of profit and loss.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating
interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future
cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.
a) Financial assets
Financial assets at amortised cost
Financial assets arc subsequently measured at amortised cost if these financial assets arc held within a business model
whose objective is to hold these assets 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.
Financial assets measured at fair value
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a
business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these 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.
Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair
value through profit or loss.
Derecognition of financial assets
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it
transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity. If the
Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts it may
have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset,
the Company continues to recognise the financial asset and also recognises a collateralised borrowing of the proceeds
received.
b) Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of
its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Financial Liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at
amortised cost, using the effective interest rate method.
Interest-bearing bank loans and overdrafts are initially measured at fair value and are subsequently measured at amortised
cost using the effective interest rate method.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged,
cancelled or they expire.
c) Derivative financial instruments
The Company uses certain derivative financial instruments, such as forward currency contracts, to hedge its foreign
currency risks.Such derivative financial instruments are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently re-measured to their fair value. The fair values for forward currency
contracts are marked to market at the end of each reporting period. Derivatives are carried as financial assets when the
fair value is positive and as financial liabilities when the fair value is negative.
(vi) Employee benefits
Defined contribution plans
Payments to defined contribution plans are charged as an expense as they fall due. Payments made to state managed
retirement benefit schemes are dealt with as payments to defined contribution schemes, where the Company’s obligations
under the schemes arc equivalent to those arising in a defined contribution retirement benefit scheme.
Defined benefit plans
For defined benefit retirement schemes, the cost of providing benefits is determined using the Projected Unit Credit
Method, with actuarial valuation being carried out at each balance sheet date. Re-measurement gains and losses of the net
defined benefit liability / (asset) are recognised immediately in Other Comprehensive Income. The service cost, net
interest on the net defined benefit liability / (asset) is treated as a net expense within employment costs.
Past service cost is recognised as an expense, when the plan amendment or curtailment occurs, or when any related
restructuring cost or termination benefits are recognised, whichever is earlier.
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined-benefit
obligation, as reduced by the fair value plan assets.
(vii) Inventories
Inventories are valued at lower of cost and net realizable value (except scrap/waste which are valued at net realized
value). "Cost" comprises all cost of purchase, costs of conversion and other costs incurred in bringing the inventory to
the present location and condition. The cost formula used is either "first in first out", or" specific identification", or the
'average cost”, as applicable.
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