Note: COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES :
a) Corporate overview
Sibar Auto Parts Limited (“the Company”) was incorporated in 1983 as a Private Limited Company
under the Companies Act and later it was converted into a Public Limited Company in the Year 1994.
The Company is in the business of manufacturing and sale of spare parts for automobiles. The
registered office is at D4&D5, Industrial Estate, Renigunta Road Tirupati, Andhra Pradesh. The
Company has been listed with the Bombay Stock Exchange (BSE).
b) Basis of preparation of Financial Statements
The financial statements of the Company are prepared in accordance with Indian Accounting Standards
(Ind AS), the provisions of the Companies Act, 2013 (“the Companies Act”), as applicable, and
guidelines issued by the Securities and Exchange Board of India (“SEBI”). The Ind AS are 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.
For the year ended March 31, 2018, and in the years before 2018, the Company prepared its financial
statements in accordance with the requirements of the Indian GAAP (“Previous GAAP”), which included
Standards notified under the Companies (Accounting Standards) Rules, 2006. The date of transition to
Ind AS is April 1, 2016. The accounting policies have been applied consistently to all periods presented
in these financial statements. The Financial Statements are approved by the Board of Directors on 29th
May, 2024
c) Basis of Measurement
The Ind AS Financial Statements have been prepared on a going concern basis using historical cost
convention and on an accrual method of accounting, except for certain assets and liabilities which have
been measured at fair value as per Ind AS.
d) Functional and Presentation Currency
These Ind AS Financial Statements are presented in Indian Rupee which is the Company’s functional
Currency.
e) Use of Estimates
The preparation of financial statements in conformity with Ind AS requires management to make
estimates, judgments, and assumptions (including revisions, if any). These estimates, judgments, and
assumptions affect the application of accounting policies and reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of financial statements, and the reported
amounts of revenue and expenses during the period.
Appropriate changes in the estimates are made as management becomes aware of changes in
circumstances. Changes in the estimates are reflected in the financial statements in the period in which
changes are made.
f) Classification of Current / Non-Current Assets and Liabilities
All the 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 of the Companies Act, 2013.
Assets: An asset is classified as current when it satisfies any of the following criteria: it is expected to
be realized in, or is intended for sale or consumption in, the Company’s normal operating cycle;
i. it is held primarily to be traded;
ii. it is expected to be realized within twelve months after the reporting date; or
iii. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting date.
Liabilities: A liability is classified as current when it satisfies any of the following criteria :
i. It is expected to be settled in the Company’s normal operating cycle;
ii. it is held primarily for the purpose of being traded;
iii. it is due to be settled within twelve months after the reporting date; or
iv. the Company does not have an unconditional right to defer settlement of the liability for at least
twelve months after the reporting date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.
All other assets/ liabilities are classified as non-current.
Based on the nature of products and the time between the acquisition of assets for processing and their
realization in Cash or cash equivalents, the Company has ascertained its normal operating cycle as 12
months for the Current / Non-current classification of assets and liabilities.
g) Revenue of Recognition :
Revenue is net of GST wherever applicable, recognized on an accrual basis, to the extent that the
economic benefits will probably flow to the Company and the revenue can be reliably measured.
Revenue from the sale of other allied goods is recognized when all the significant risks and rewards of
ownership of the goods have been passed to the buyer on delivery of the goods.
Revenue from services is recognized concerning the stage of completion of a contract when the
outcome can be measured reliably.
Interest income is recognized using the effective interest rate method
h) Property Plant and Equipment:
Property, Plant, and Equipment are stated at cost net of GST, if any, and subsequently at cost less
depreciation and impairment losses if any cost includes expenditure on acquisition of the asset, the
present value of expected cost for the decommissioning of an asset, cost of replacing part of Plant and
Equipment and borrowing costs.
Depreciation on all assets is provided on the “Straight Line Method” over the useful lives of the assets
estimated by the Management. Depreciation for assets purchased/sold during the period is
proportionately charged Individual low-cost assets (acquired for Rs. 5,000/- or less) are depreciated at
100 % in the year of acquisition/ purchase.
The Management estimates the useful lives for fixed assets as follows :
i. Buildings 30 Years
ii. Computers 3 Years
iii. Furniture & Fixtures 10 Years
iv. Plant & Machinery 15 Years
v. Vehicles 8 Years
i) Capital Work in Progress
Assets in the course of construction are capitalized in capital work in progress account, At the point
when an asset is capable of operating in the manner intended by management, the cost of construction
is transferred to the appropriate category of property, plant, and equipment.
j) Borrowing Cost:
Borrowing costs directly attributable to the creation of an asset are capitalized as part of the cost of the
asset. General borrowing costs are capitalized by apportioning the same to qualifying assets.
k) Impairment:
At the end of each Balance Sheet date, the carrying amount of assets is assessed as to whether there
is any indication of impairment. If the estimated recoverable amount is found less than its carrying
amount, the impairment loss is recognized and assets are written down to their recoverable amount.
l) Inventories
Inventories are valued at the lower cost and net realizable value except for scrap and by-products
which are valued at net realizable value.
Costs incurred in bringing the inventory to its present location and conditions are accounted for as
follows :
• Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories
to their present location and condition. Cost is determined on a weighted average basis.
• Finished goods and work in progress: cost includes the cost of direct materials and labor wages
and a proportion of manufacturing overheads based on the normal operating capacity, excluding
borrowing costs. Cost is determined on a weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated
cost of completion and the estimated costs necessary to make the sale.
m) Foreign Exchange Transactions/Translation
Transactions in foreign currencies are accounted at functional currency, at the exchange rate prevailing
on the date of transactions. Gains/losses arising out of the fluctuations in the exchange rate between
the functional currency and foreign currency are recognized in the Statement of Profit &Loss in the
period in which they arise. The fluctuations between foreign currency and functional currency relating to
monetary items at the year ending are accounted as gains/losses in the Statement of Profit & Loss.
n) Earnings per Share
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic
earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the year, adjusted for
own shares held. Diluted earnings per share are determined by adjusting the profit or loss attributed to
ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for
own shares held, for the effects of all dilutive potential ordinary shares.
o) Leases
The Company recognizes the right to use assets under lease arrangements in which it is the lessee.
Rights to use assets owned by third parties under lease agreements are capitalized at the inception of
the lease and recognized on the consolidated balance sheet. The corresponding liability to the lessor is
recognized as a lease obligation within short and long-term borrowings. The carrying amount is
subsequently increased to reflect interest on the lease liability and reduced by lease payments made.
For calculating the discounted lease liability on leases, the incremental borrowing rate is used. The
incremental borrowing rate is calculated at the rate of interest at which the company would have been
able to borrow for a similar term and with a similar security the funds necessary to obtain a similar asset
in a similar market. Finance costs are charged to the income statement to produce a constant periodic
rate of charge on the remaining balance of the obligations for each accounting period. If modifications
or reassessments occur, the lease liability and right-of-use asset are re-measured. Right-of-use assets
are depreciated over the shorter of the useful life of the asset or the lease term.
p) Employee benefits:
Defined Contribution Plans: Payments made to a defined contribution plan such as a provident Fund
are charged as an expense in the Profit and Loss Account as they fall due.
Defined Benefit Plans: The company’s liability towards gratuity to past employees is determined using
the projected unit credit method which considers each period of service as giving rise to an additional
unit of benefit entitlement and measures each unit separately to build up the final obligation. Past
services are recognized on a straight-line basis over the average period until the amended benefits
become vested. Actuarial gains and losses are recognized immediately in the statement of profit and
loss Account as income or expense. The obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by reference to market yields at the
Balance Sheet date on Government Securities where the currency and terms of the Government
Securities are consistent with the currency and estimate terms of the defined benefit obligations.
q) Income Tax:
Income tax expense represents the sum of current tax payable and deferred tax. Current Tax: The tax
currently payable is based on the current year's taxable profit for the year. The current tax is calculated
using the tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax: Deferred tax is provided using the Balance Sheet method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date. Deferred tax assets are generally recognized for all deductible
temporary differences to the extent that the taxable profits will probably be available against which
those deductible temporary differences can be utilized. Deferred tax is calculated using the tax rates
that have been enacted or substantively enacted at the end of the reporting period. The carrying
amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be utilized.
r) Research and Development
All expenses incurred for Research & Development are charged to revenue as incurred.
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