a. Investment in subsidiaries and joint ventures_
Subsidiaries are entities that are controlled by the Company. The Company controls an entity when the Company is exposed,
or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the investee. Investments in subsidiaries are accounted at cost less impairment, if any.
A Joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the joint arrangement. Investments in joint ventures are accounted at cost less impairment, if any.
Investments in subsidiary and joint venture are accounted at cost less impairment ,if any, in accordance with Ind AS 27 -
Separate financial statements.
Refer to note 2.2 for the list of investments.
b. Property plant and equipment_
Freehold Land is carried at historical cost. All other items of property, plant and equipment are states at historical cost less
depreciation. Historical cost are stated at cost of acquisition inclusive of all attributable cost of bringing the assets to their
working condition, accumulated depreciation and accumulated impairment losses, if any.
Subsequent expenditure 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.
Items of property, plant and equipment that have been retired from active use and are held for disposal are stated at the lower
of their net book value and net realisable value and are shown separately in the financial statements. Any expected loss is
recognised immediately in the Statement of Profit and Loss.
Losses arising from the retirement of, and gains or losses arising from disposal of tangible assets which are carried at cost are
recognised in the Statement of Profit and Loss.
Schedule II to the Companies Act, 2013 prescribes useful lives for property, plant and equipments and allows Companies to
use higher/lower useful lives and residual values if such useful lives and residual values can be technically supported and
justification for difference is disclosed in the financial statements. Considering the applicability of Schedule II, the
management has re-estimated useful life and residual values of all its fixed assets. The management believes that the
depreciation rates currently used fairly reflect its estimate of the useful lives and residual values of property, plant and
equipment.
The Company provides depreciation on all assets (except leasehold land) on straight line basis and the Leasehold land is
being amortised on straight line basis over the period of lease.
Assets not yet ready for use are recognised as capital work in progress.
On transition to Ind AS, the company has elected to continue with the carrying value of all of its property, plant and
equipment recognised as at 1 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost
of the property, plant and equipment.
c. Intangible Assets(Including Capital Work in Progress)_
Intangible assets relating to product development are recorded at actual cost incurred on the development of products and are
capitalised once the products receive approval from relevant authorities and the same are carried at cost less accumulated
amortisation.
Intangible assets are amortised on a straight line basis over their estimated useful life of approximately four years, so as to
effectively depreciate the assets over the specified useful life. Intangible assets are derecognised on disposal or when no future
economic benefits are expected from its use or disposal
Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net
disposal proceeds and the carrying amount of the asset and recognised as income or expense in the Statement of Profit and
Loss.
d. Impairment of Non-Financial Assets_
The carrying amount of the non-financial assets are reviewed at each Balance Sheet date if there is any indication of
impairment based on internal /external factors. An impairment loss , if any, is recognised in the statement of profit and loss
whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount of
the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net
selling price and its value in use.
After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its remaining useful
life.
A previously recognised impairment loss, if any, is increased or reversed depending on changes in circumstances. However,
the carrying value after reversal ,if any, is not increased beyond the carrying value that would have prevailed by charging usual
depreciation / amortisation if there were no impairment.
f. Investments and financial assets_
Classification
The company classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
• those measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the
cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For
investments in debt instruments, this will depend on the business model in which the investment is held. For investments in
equity instruments, this will depend on whether the company has made an irrevocable election at the time of initial recognition
to account for the equity investment at fair value through other comprehensive income.
The company reclassifies debt investments when and only when its business model for managing those assets changes.
Measurement
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are
solely payment of principal and interest.
Measurement of debt instruments
Subsequent measurement of debt instruments depends on the company’s business model for managing the asset and the cash
flow characteristics of the asset. There are three measurement categories into which the company classifies its debt
instruments:
• 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 debt investment that is subsequently
measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is
derecognised or impaired. Interest income from these financial assets is included in finance income using the effective interest
rate method.
• Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows
and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are
measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which
are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised
in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial
assets is included in other income using the effective interest rate method.
• Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair
value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or
loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit and loss
within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other
income.
Impairment of financial assets
The company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost
and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase
in credit risk.
For trade receivables only, the company applies the simplified approach permitted by Ind AS 109 Financial Instruments,
which requires expected lifetime losses to be recognised from initial recognition of the receivables.
De-recognition of financial assets
A financial asset is derecognised 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.
g. Borrowings and other financial liabilities_
Borrowings and other financial liabilities if any are initially recognised at fair value (net of transaction costs incurred).
Difference between the fair value and the transaction proceeds on initial stage, if any, is recognised as an asset / liability based
on the underlying reason for the difference.
All financial liabilities , if any, are measured at amortised cost using the effective interest rate method
h. Inventories_
(a) Traded goods, raw materials and packing materials: At cost or net realisable value, whichever is lower.
(b) Process stock: At cost or estimated realisable value, whichever is lower.
(c) Finished goods: At cost or net realisable value, whichever is lower and are inclusive of cenvat thereon.
i. Revenue Recognition_
Revenue from sale of goods is recognised on transfer of all significant risks and rewards of ownership to the buyer. The
amounts recognised as sale is exclusive of goods and service tax.
Income from conversion job is recognised on its completion and on its acceptance by the customers.
j. Other Income_
Interest income for all debt instruments , is recognised using the effective interest rate method. The effective interest rate is
the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross
carrying amount of a financial asset. When calculating the effective interest rate, the company estimates the expected cash
flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar
options) but does not consider the expected credit losses.
Dividend 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.
Management and marketing fees are recognised as and when the services are rendered.
k. Retirement and Other Employee Benefits_
Gratuity: The Company has computed its liability towards future payments of gratuity to employees, on actuarial valuation
basis which is determined based on project unit credit method and the charge for current year is debited to the Statement of
Profit and Loss. Actuarial gains and losses, if any, arising on the measurement of defined benefit obligation is charged/
credited to other comprehensive income.
Leave encashment: Liabilities are determined at the end of the year as per the management estimates and policy framed by
the company and the charge for the current year is debited to the Statement of Profit and Loss
Presentation and disclosure : For the purpose of presentation ,the allocation between the short term and the long term
provisions has been made as determined by a actuary.
Superannuation: The Company contributes towards superannuation fund, for future payment of retirement benefits to
employees. The
contributions accruing during each year are charged to the Statement of Profit and Loss.
Provident fund: Employer’s contribution to provident fund is charged to the Statement of Profit and Loss.
l. Segment Reporting_
Operating segments , if any, are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker.
The Board of directors has been identified as being the chief operating decision maker.
The board of directors of Ador Multi Products Limited assesses the financial performance and position of the group, and
makes strategic decisions
m. Taxation_
Current tax : The income tax expense or credit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period.
Deferred Tax : Deferred income tax is provided in full, using the balance sheet approach, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time
of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply
when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the
liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly
in equity, respectively.
n. Leases_
The determination of whether an arrangement is a lease is based on the substance of the arrangement at the inception of the
lease. The arrangement is a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Company as a lessee
Lease in which a significant portion of the risks and rewards of ownership of an asset are classified as operating leases. Lease
Payments is recognised in the statement of profit and loss on a straight - line basis over the lease term.
Company as a lessor
Lease in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as
operating leases. Assets subject to operating leases are included in fixed
assets. Lease Income is recognised in the statement of profit and loss on a straight - line basis over the lease term. Costs,
including depreciation, are recognised as an expense in the statement of profit and loss.
o. Foreign Currency Transactions_
Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets
and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of the Balance Sheet.
Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of monetary assets and
liabilities are recognised in the Statement of Profit and Loss. Non-monetary foreign currency items are carried at cost.
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