1. Significant accounting policies
1.1. Basis of measurement
The financial statements have been prepared under historical cost convention on accrual basis, except
for the items that have been measured at fair value as required by relevant Ind AS. The standalone
financial statements are presented in Indian Rupees, which is the Company's functional and presentation
currency and all amounts are rounded to the nearest rupees and two decimals thereof, except as stated
otherwise.
1.2. Use of estimates and judgements
The presentation of the financial statements in conformity with Ind AS requires the management
to make estimates, judgements and assumptions affect the application of accounting policies and
reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date
of financial statements and reported amount of revenue and expenses during the reporting period.
The application of accounting policies that requires critical accounting estimates involving complex and
subjective judgements and the use of assumptions in these financial statements have been disclosed
in Note 1.3. Accounting estimates could change from period to period. Actual result could differ from
those estimates. Appropriate changes in estimates are made as the management becomes aware of
changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial
statements in the period in which such changes are made and, if material, their effects are disclosed in
the notes to the financial statements.
1.3. Critical accounting estimates
a) Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is
reduced by rebates and other similar allowances.
Revenue from the sale of goods is recognised when the goods are dispatched and titles have
passed, at which time all the following conditions are satisfied:
• the Company has transferred to the buyer the significant risks and rewards of ownership of the
goods;
• the Company retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold;
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the
Company; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably
Dividend income from investments is recognized when the shareholder's right to receive payment
has been established.
Interest income from a financial asset is recognized when it is probable that the economic benefits
will flow to the Group and the amount of income can be measured reliably. Interest income is
accrued on, time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset's net carrying amount on initial recognition.
b) Useful lives and residual value of property, plant and equipment and Intangible assets
Company reviews the useful lives and residual values of property, plant and equipment and
Intangible Assets at least once a year. Such lives are dependent upon an assessment of both the
technical lives of the assets and also their likely economic lives based on various internal and
external factors including relative efficiency and operating costs. Accordingly useful lives are
reviewed annually using the best information available to the Management.
1.4. 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 capitalized 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 straight-line method. The management has used
useful lives for assets as mentioned in Schedule II of Companies Act, 2013
Depreciation methods, useful lives and residual values are reviewed periodically, including at each
financial year end.
Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance
Sheet date is classified as capital advances under other non-current assets and the cost of assets not
ready to use before such date are disclosed under 'Capital work-in-progress'. 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 the Statement of Profit and Loss when
incurred. 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.
1.5. Impairment of assets
Property, plant and equipment are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. For impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined
on an individual asset basis unless the asset does not generate cash flows that are largely independent
of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating
Unit (CGU) to which the asset belongs.
If such assets are impaired, the impairment to be recognized in the Statement of Profit and Loss is
measured by the amount by which the carrying value of the assets exceeds the estimated recoverable
amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has
been a change in the estimates used to determine the recoverable amount. The carrying amount of
the asset is increased to its revised recoverable amount, provided that this amount does not exceed
the carrying amount that would have been determined (net of any accumulated depreciation) had no
impairment loss been recognized for the asset in prior years.
1.6. Intangible assets
Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are
amortized over their respective individual estimated useful lives on a straight-line basis, from the date
that they are available for use. The estimated useful life of an identifiable intangible asset is based on
a number of factors including the effects of obsolescence, demand, competition, and other economic
factors (such as the stability of the industry, and known technological advances). Amortization methods
and useful lives are reviewed periodically including at each financial year end.
Computer software which is not an integral part of the related hardware is classified as an intangible
asset and is being amortized over the estimated useful life.
1.7. Employee benefits
Defined contribution plan
Employee benefits in the form of Provident Fund (with Government Authorities) are considered as
defined contribution plan and the contributions are charged to the statement of Profit & Loss of the
year when the contributions to the respective funds are due.
Defined benefit plan
Retirement benefits in the form of Gratuity and Long term compensated leaves are considered as defined
benefit obligations and are provided for on the basis of an actuarial valuation, using the projected unit
credit method, as at the date of the Balance Sheet. Other short-term absences are provided based on
past experience of leave availed.
Actuarial Gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings
through other comprehensive income (OCI) in the period in which they occur. Re-measurements are
not reclassified to profit or loss in subsequent periods.
1.8. Financial instruments - initial recognition, subsequent measurement and impairment
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Financial assets or a liability is recognised when the
Company becomes a Party to the contractual provision of the instrument.
a) Financial assets
Financial assets include cash and cash equivalent, trade and other receivables, investments in
securities and other eligible current and noncurrent assets.
Financial Assets are measured at amortised cost or fair value through Other Comprehensive Income
or fair value through Profit or Loss, depending on its business model for managing those financial
assets and the assets contractual cash flow characteristics.
Subsequent measurements of financial assets are dependent on initial categorisation. For
impairment purposes significant financial assets are tested on an individual basis, other financial
assets are assessed collectively in groups that share similar credit risk characteristics.
The Company derecognizes a financial asset when the contractual rights to the cash flows from
the financial assets expire or it transfers the financial assets and the transfer qualifies for the
derecognisition under Ind AS 109.
Investment in equity shares
Investments in equity securities are initially measured at fair value. Any subsequent fair value gain
or loss is recognized through Profit or Loss.
The Company assesses impairment based on expected credit loss (ECL) model to all its financial
assets measured at amortised cost.
b) Financial liabilities
Financial liabilities include long term and short-term loan and borrowings, trade and other payables
and other eligible current and non-current liabilities.
All financial liabilities recognized initially at fair value and, in the case of loans and borrowing and
other payable, net of directly attributable transaction costs. After initial recognition, financial
liabilities are classified under one of the following two categories
i) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading.
The Company has not designated any financial liabilities upon initial measurement recognition
at fair value through profit or loss. Financial liabilities at fair value through profit or loss are at
each reporting date at fair value with all the changes recognized in the Statement of Profit and
Loss.
ii) Financial liabilities measured at amortised cost
After initial recognition, such financial liabilities are subsequently measured at amortized cost
by applying the Effective Interest Rate (EIR) method to the gross carrying amount of financial
liability. The EIR amortization is included in finance expense in the profit and loss.
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires.
1.9. Taxes on income
Income tax expense represents the sum of current and deferred tax. Tax is recognised in the Statement
of Profit and Loss, except to the extent that it relates to items recognised directly in equity or other
comprehensive income.
Current tax provision is computed for Income calculated after considering allowances and exemptions
under the provisions of the applicable Income Tax Laws. Current tax assets and current tax liabilities
are off set, and presented as net.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in
the Balance sheet and the corresponding tax bases used in the computation of taxable profit and
are accounted for using the liability method. Deferred tax liabilities are generally recognised for all
taxable temporary differences, and deferred tax assets are generally recognised for all deductible
temporary differences, carry forward tax losses and allowances to the extent that it is probable that
in future taxable profits will be available to set off such deductible temporary differences. Deferred
tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax
liabilities are off set, and presented as net.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available against which the
temporary differences can be utilised.
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