1. Corporate Information:
Valencia Nutrition Limited ('the Company'), headquartered in Bangalore, Karnataka, India, was incorporated on
1st April, 2013. The company is engaged in the business of developing, manufacturing, sale & distribution of
nutraceutical products. The Company has entered into the listing agreement with the BSE Limited on 02 January
2020, pursuant to the requirements of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 for listing of its shares. The company has successfully completed the
Initial Public Offering (IPO) in the current year and its shares have started trading on the Bombay Stock Exchange
Startups (BSE Startups) on 06 January 2020.
2. Summary of significant accounting policies:
a) Basis of preparation of financial statements
The financial statements have been prepared on the basis of a going concern. assumption, on historical cost
convention and on accrual method of accounting in accordance with the generally accepted accounting
principles in India, Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ('Act') read
with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other
accounting principles generally accepted in India, to the extent applicable and the provisions of the Companies
Act, 2013 as adopted consistently by the Company.
b) Use of estimates
The preparation of the financial statements in conformity with GAAP requires the management to make
estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to
contingent assets and liabilities as at the date of the financial statements and reported amounts of income and
expenses during the period. Examples of such estimates include provisions for doubtful debts, future obligations
under employee retirement benefit plans, income taxes, the useful lives and provision for impairment of fixed
assets and intangible assets. Management believes that the estimates used in the preparation of financial
statements are prudent and reasonable. Future results could differ from these estimates.
c) Cash Flow Statement
Cash Flow Statement is prepared under the "Indirect Method" as set out in the Accounting Standard 3 (AS-3),
"Cash Flow Statements", whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of
transactions of non-cash nature reported amounts of assets and liabilities on the date of financial statements
and the reported amounts of revenues and expenses during the reported period.
d) Cash and Cash Equivalents
Cash comprises cash on hand, current accounts and demand deposit with banks. Cash equivalents are short
term balances (with an original maturity of three months or less from the date of acquisition), highly liquid
investments that are readily convertible into loan amounts of cash and which are subject to insignificant risk of
changes in values.
e) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment, if any. Costs
directly attributable to acquisition are capitalised until the property, plant and equipment are ready for use, as
intended by the Management. The Company depreciates property, plant and equipment over their estimated
useful lives using the written down value method, considering a salvage value of 5%. The estimated useful lives
of assets are as follows:
Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year
end. Subsequent expenditures relating to property, plant and equipment are capitalized only when it is probable
that future economic benefits associated with these will flow to the Company and the cost of the item can be
measured reliably. Repairs and maintenance costs are recognized in net profit in the Statement of Profit and Loss
when incurred. The cost incurred on assets yet to be available for use as at the end of the reporting period is
disclosed as "Capital Work in Progress". Depreciation is charged from the time asset is available for use. The cost
and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of
the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss. Advances paid
towards the acquisition of property, plant and equipment, Tools outstanding at each balance sheet date are
classified as capital advances under other non-current assets.
f) Depreciation and Amortization
Depreciation on property, plant & equipment is provided on pro-rata basis for the period of use, on Written down
value at the rates determined based on useful lives of respective assets as prescribed in the Schedule II of the
Companies Act, 2013.
g) Revenue recognition
Revenue from sale of products are recognized when substantial risks and rewards of ownership are transferred
to customers, and are stated net of trade discounts, rebates and value added tax or goods and services tax.
h) Inventories
a) Inventories are valued at cost on First in First out (FIFO) basis or Net Realizable value whichever is less.
b) Cost of inventories comprises of costs of purchase, costs of conversion and other costs incurred in bringing
the inventories to their present location and condition.
c) The diminution in the value of obsolete, unserviceable, slow moving and non-moving stores and spares are
assessed periodically and accordingly provided for.
d) Consumables are charged to the Statement of Profit and Loss in the year of purchase irrespective of the value.
i) Retirement and other benefits to employees
The company accounts for salaries on an accrual basis. The Company's provident fund schemes are defined
contribution plans. The contributions paid/payable under the schemes are recognized immediately in the
Statement of Profit and Loss.
j) Impairment
The Company reviews the carrying values of tangible and intangible assets for any possible impairment at each
balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater of net selling price and value in use. In assessing the
value in use, the estimated future cash flows are discounted to their present value at appropriate discount rates.
If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the asset is reflected at the recoverable amount.
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