2) Summary of Significant Accounting Policies:
a) Property, Plant and Equipment:
All items of Property, plant and equipment except land are shown at cost,
less accumulated depreciation and impairment, if any. The cost of an
item of property, plant and equipment comprises its cost of acquisition
inclusive of inward freight, import duties, and other non-refundable
taxes or levies and any cost directly attributable to the acquisition /
construction of those items; any trade discounts and rebates are
deducted in arriving at the cost of acquisition.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the
group and the cost of the item can be measured reliably. All other repairs
and maintenance are charged to statement of profit or loss during the
reporting period in which they are incurred.
Gain or losses arising on disposal of property, plant and equipment are
recognised in profit or loss.
Transition to Ind AS
On transition to Ind AS, the company has elected to continue with the
carrying value of all its property, plant and equipment recognized as at
April 01, 2016 measured as per the previous GAAP (Indian GAAP) and
use that carrying value as the deemed cost of property, plant and
equipment.
(b) Depreciation and amortisation:
Depreciation has been provided based on useful life assigned to each
asset in accordance with Schedule II of the Companies Act, 2013 under
Straight Line Method. The residual values are not more than 5% of the
original cost of the asset.
(c) Impairment of assets
At the date of balance sheet, if there are indications of impairment and
the carrying amount of the cash generating unit exceeds its recoverable
amount (i.e. the higher of the fair value less costs of disposal and value in
use), an impairment loss is recognised. The carrying amount is reduced
to the recoverable amount and the reduction is recognised as an
impairment loss in the profit or loss. The impairment loss recognised in
the prior accounting period is reversed if there has been a change in the
estimate of recoverable amount. Post impairment, depreciation is
provided on the revised carrying value of the impaired asset over its
remaining useful life.
(d) Inventories:
The cost of various categories of inventory is determined as follows:
1. Raw material and Packing Materials : At Cost including local taxes (Net
of setoff) or Net realisable
value, whichever is lower.
2. Stock in Process : At Cost or Net realisable value, whichever is lower.
3. Stock of Finished Goods : At Cost or Net realisable value, whichever is
lower.
4. Consumable Stores & Spares : At Cost or Net realisable value,
whichever is lower.
5. Scrap : At Net realisable value
Cost of raw material and packing materials are determined using first in
first out (FIFO) method. Costs of finished goods and stock in process
include cost of raw material and packing materials, cost of conversion
and other costs incurred in bringing the inventories to the present
location and condition.
(e) Revenue recognition:
Revenue is measured at the fair value of the consideration received or
receivable.
The Company recognises sale of goods when the significant risks and
rewards of ownership are transferred to the buyer.
Income recognition for services takes place as and when the services are
performed in accordance with IND AS 115.
Interest Income is accounted on accrual basis and dividend income is
accounted on receipt basis.
(f) Fair value measurement:
The Company measures financial instruments at fair value at each
balance sheet date. Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
All assets and liabilities for which fair value is measured or disclosed in
the financial statement are categorized within the fair value hierarchy.
(g) Financial Instruments:
Financial assets and liabilities are recognised when the Company
becomes a party to the contractual provisions of the instruments. All the
financial assets and liabilities are measured initially at fair value.
Transaction costs that are directly attributable to the acquisition or issue
of financial asset and financial liabilities (other than financial assets and
liabilities carried at fair value through profit or loss) are added or
deducted from the fair value measured on initial recognition of financial
asset or financial liability.
(h) Financial assets
Classification and Measurement
All the financial assets are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition of financial asset
(other than financial assets carried at fair value through profit or loss) are
added to or deducted from the fair value measured on initial recognition
of financial asset.
Subsequent measurement of a financial assets depends on its
classification i.e., financial assets carried at amortised cost or fair value
(either through other comprehensive income or through profit or loss).
Such classification is determined on the basis of Company's business
model for managing the financial assets and the contractual terms of the
cash flows.
The Company's financial assets primarily consists of cash and cash
equivalents, trade receivables, loans to employees and security deposits
etc. which are classified as financial assets carried at amortised cost.
Amortised cost
Assets that are held for collection of contractual cash flows where those
cash flows represent solely payments of principal and interest are
measured at amortised cost. A gain or loss on a financial assets that is
subsequently measured at amortised cost is recognised in profit or loss
when the asset is derecognised or impaired. Interest income from these
financial assets is recognised using the effective interest rate method.
Impairment of financial assets
The Company assesses on a forward looking basis the expected credit
losses associated with its assets carried at amortised cost. For trade
receivables, the Company provides for lifetime expected credit losses
recognized from initial recognition of the receivables.
De-recognition of financial assets
A financial asset is de-recognised 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.
(i) Income recognition
Interest income
Interest income is recognised at contracted rate of interest.
Dividends
Dividends are recognised in profit or loss only when the right to receive
payment is established, it is probable that the economic benefits
associated with the dividend will flow to the Company, and the amount of
the dividend can be measured reliably.
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