2 MATERIAL ACCOUNTING POLICIES:
A GENERAL
i) The Financial Statements comply with in all material respects with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015 and other relevant provisions of the Act, as amended.
ii) 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 policies
hitherto in use.
iii) 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 the Schedule III to the Act. Based on the nature of products and the
time between the acquisition of assets for processing and their realization in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the purpose of current classification of assets
and liabilities.
B REVENUE RECONGNTION
i) All Expenses and Income to the extent considered payable and receivable respectively with reasonable
certainty, unless specifically stated to be otherwise, are accounted for on accrual basis.
ii) Interest is accounted for on the accrual basis.
iii) Dividend is accounted for as and when received.
C PROPERTY, PLANT AND EQUIPMENTS
i) Land and buildings held for use in the production or supply of goods or services, or for administrative
purposes, are stated in the balance sheet at deemed cost less accumulated depreciation. Freehold land is not
depreciated.
ii) Other tangible Assets are stated at cost of acquisition inclusive of all attributable cost of bringing the same
to their working condition, net off accumulated depreciation and accumulated impairment losses, if any.
Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase
the future benefits from the existing asset beyond its previously assessed standard of performance.
iii) Expenditure related to and incurred during implementation of the project is capitalized under the
appropriate heads on completion of the projects.
D CAPITAL WORK-IN-PROGRESS
Expenditure related to and incurred during the implementation of the projects is included under Capital Work-
in-Progress and the same is capitalized under the appropriate heads on completion of the projects.
E DEPRECIATION / AMORTIZATION
Depreciation is charged as per the provisions of Schedule II to the Act based upon useful life of assets. The
useful life adopted for the purpose of depreciation charged as follows:
F IMPAIRMENT
Assessment is done at each Balance Sheet date as to whether there is any indication that an asset may be
impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups
of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable
amount of the asset/cash generating unit is made. Assets whose carrying value exceeds their recoverable
amount are written down to the recoverable amount. Recoverable amount is higher of an asset’s or cash
generating unit’s net selling price and its value in use. Value in use is the present value of estimated future
cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful
life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an
impairment loss recognised for an asset in prior accounting years may no longer exist or may have decreased.
G INVENTORIES:
The inventories are valued at lower of cost and net realizable value. Cost is assigned on weighted average
basis. Obsolete, defective and unserviceable stocks are provided for.
H FOREIGN CURRENCY TRANSACTIONS:
i) Transactions in foreign currency are recorded at the rate prevailing on the date of the transaction.
ii) Current Assets and Current Liabilities in foreign currency outstanding as at the year-end are stated at the
rates of exchange prevailing at the close of the year. The resultant gains/losses of the year are recognized in
the Statement of Profit and Loss.
I GOVERNMENT GRANTS
i) Grants are accounted for where it is reasonably certain that the ultimate collection will be made.
ii) Grants relating to Fixed Assets in the nature of Project Capital Subsidy are credited to Capital Reserve.
iii) Others are credited to Statement of Profit and Loss.
J RETIREMENT BENEFITS:
Liability as at the year end in respect of retirement benefits is provided for and charged to Statement of Profit
and Loss as follows:
i) Provident Fund / Family Pensions:
At a percentage of salary/wages for eligible employees.
ii) Retirement benefit costs and termination benefit
The Company determines the present value of the defined benefit obligation and recognizes the liability or
asset in the balance sheet.
The present value of the obligation is determined using the projected unit credit method, with actuarial
valuations being carried out at the end of each year
Defined benefit costs are composed of:
(a) service cost - recognized in profit or loss; service cost comprises (i) current cost which is the increase in
the present value of defined benefit obligations resulting from employee service in the current year, (ii) past
service cost which is the increase in the present value of defined benefit obligations resulting from employee
service in the prior years resulting from a plan amendment, and (iii) gain or loss on settlement.
(b) remeasurements of the liability or asset - recognized in other comprehensive income.
(c) remeasurements of the liability or asset essentially comprise of actuarial gains and losses (i.e. changes in
the present value of defined benefit obligations resulting from experience adjustments and effects of changes
in actuarial assumptions).
Short-term benefits: A liability is recognised for benefits accruing to employees in respect of wages and
salaries, annual leave and sick leave and other short term benefits in the year the related service is rendered
at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Other long-term benefits: Liabilities recognised in respect of other long-term employee benefits are measured
at the present value of the estimated future cash outflows expected to be made by the Group in respect of
services provided by employees up to the reporting date.
iii) Bonus
The company recognises a liability and expense for bonus. The company recognises a provision where
contractually obliged or where there is past practice that has created a constructive obligation.
K BORROWING COST
Borrowing cost directly attributable to acquisition, construction, production of qualifying assets are
capitalized as a part of the cost of such assets up to the date of completion. Other borrowing costs are
charged to Statement of Profit and Loss.
L TAXATION
Provision for Current Tax is made and retained in the accounts on the basis of estimated tax liability as per
applicable provisions of Income Tax Act 1961.
M 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. Such deferred tax assets and
liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a
business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the
form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that
the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet
when it is highly probable that future economic benefit associated with it will flow to the Company.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year 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 year.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
N EARNING PER SHARE
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year. Earnings
considered in ascertaining the Company’s earnings per share is the net profit for the year attributable to equity
share holders. The weighted average number of equity shares outstanding during the year and for all years
presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares,
that have changed the number of equity shares outstanding, without a corresponding change in resources. For
the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year is adjusted for the
effects of all dilutive potential equity shares.
O USE OF ESTIMATES
The preparation of Financial Statements requires estimates and assumptions to be made that affect the
reported amounts of assets and liabilities on the date of Financial Statements and the reported amounts of
revenues and expenses during the reporting year. Difference between the actual results and the estimates are
recognised in the year in which the results are known/ materialised.
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