SIGNIFICANT ACCOUNTING POLICY
A. COMPANY OVERVIEW
Confidence Petroleum India Limited (the Company) is a BSE and NSE listed entity
incorporated in India having registered, office at 701, Shivai Plaza Premises Chs. Ltd,
Plot No 79, Marol Industrial Estate, Nr Mahalaxmi Hotel, Andheri East, Mumbai,
Maharashtra - 400059. The Company is one of leading manufacturers of LPG Cylinders
in India along with its repairing activity, prominent supplier of Auto LPG in India with
its network of bottling plants and ALDS Stations across India, into Parallel LPG Market
by the name of pack cylinder division with GO GAS as its brand, into selling LPG to both
domestic and commercial users at competitive rates, into bottling blending /marketing
of LPG and also in its Logistic business. These standalone financial statements were
approved by the Board of Directors and authorized for issue on 29th May, 2023.
B. ACCOUNTING CONVENTION
The Financial Statements have been prepared on the historical cost basis. Further, the
Company maintains its accounts in accrual basis accounting policies are consistently
applied by the Company to all the period mentioned in the financial statements.
The preparation of financial statements is in accordance with the Indian Accounting
standard ('IND AS’) notified under section 133 of the Companies Act, 2013 (“the Act)
read with the Companies Indian Accounting standard Rules 2015 as amended.
Use of estimates
The preparation of financial statements in conformity with Ind AS requires management
to make judgments, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities and disclosure of contingent liabilities at the
end of the reporting period. Although these estimates are based upon management’s
best knowledge of current events and actions, uncertainty about these assumptions and
estimates could result in the outcomes requiring a material adjustment to the carrying
amounts of assets or liabilities in the future periods.
Current / Non-current classification:
Current or Non-current. An asset is classified as current when it satisfies any of the
following criteria:
(i) it is expected to be realized in, or is intended for sale or consumption in, the
Company’s normaloperating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is expected to be realized within twelve months after the reporting date; or
(iv) it is cash or a cash equivalent unless it is restricted from being exchanged or used to
settle a liability forat least twelve months after the reporting date.
All other assets are classified as non-current.
A liability shall be classified as current when it satisfies any of the following criteria:
(i) it is expected to be settled in, the Company’s normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is due to be settled within twelve months after the reporting date; or
(iv) the Company does not have an unconditional right to defer settlement of the liability for
at least twelve months after the reporting date. Terms of a liability that could, at the
opinion of the counterparty, resultin its settlement by the issue of equity instruments do
not affect its classification.
All other liabilities are classified as non-current.
C. PROPERTY PLANT & EQUIPMENTS TANGIBLE ASSETS
Tangible Assets are stated at cost net of recoverable taxes, trade discounts and
rebates and include amounts added on revaluation, less accumulated depreciation
and impairment loss, if any. The cost of Tangible Assets comprises its purchase
price, borrowing cost and any cost directly attributable to bringing the asset to its
working condition for its intended use, net charges on foreign exchange contracts
and adjustments arising from exchange rate variations attributable to the assets.
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 Company and the cost of the item
can be measured reliably. Property, plant and equipment which are not ready for
intended use as on the date of Balance Sheet are disclosed as “Capital work-in¬
progress”
Gain or losses arising from disposal of tangible assets are measured as the difference
between the net disposal proceeds and the carrying amount of assets and are
recognized in the statement of profit and loss when the assets is disposed.
D. ASSET IMPAIRMENT
Management Periodically assesses, using external and internal sources whether there is
an indication that an asset may be impaired. An impairment is recognized whenever the
carrying value of the asset exceeds its recoverable amount. Recoverable amount is
higher of an assets net selling price and its value in use. An impairment loss, if any, is
recognized in the Statement of profit & Loss in the period in which impairment takes
place.
E. FINANCE COSTS
Borrowing costs that are directly attributable to the acquisition or construction of an
asset that necessarily takes substantial period of time to get ready for its intended use
are capitalized as a part of the cost of that asset till the date it is ready for its intended
use or sale. Other borrowing costs are recognized as an expense in the period in which
they incurred.
F. LEASES
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its
leasing arrangements, if the contract conveys the right to control the use of an identified
asset.
The contract conveys the right to control the use of an identified asset, if it involves the
use of an identified asset and the Company has substantially all of the economic benefits
from use of the asset and has right to direct the use of the identified asset. The cost of
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the right-ofuse asset shall comprise of the amount of the initial measurement of the
lease liability adjusted for any lease payments made at or before the commencement
date plus any initial direct costs incurred. The right-of-use assets is subsequently
measured at cost less any accumulated depreciation/ amortization, accumulated
impairment losses, if any and adjusted for any measurement of the lease liability. The
rightof-use assets is depreciated/ amortised using the straight-line method from the
commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments
that are not paid at the commencement date of the lease. The lease payments are
discounted using the interest rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined, the Company uses incremental
borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an
operating expense on a straight-line basis over the lease term
G. DEPRECIATION AND AMORTIZATION TANGIBLE ASSETS
Depreciation on Fixed Assets is provided to the extent of depreciable amount on
the written down value Method Depreciation is provided based on useful life of the
assets as prescribed in Schedule II to the Companies Act, 2013
In respect of additions or extensions forming an integral part of existing assets and
insurance spares, including incremental cost arising on account of translation of foreign
currency liabilities for acquisition of Fixed Assets, depreciation is provided as aforesaid
over the residual life of the respective assets.
Depreciation and amortization methods, useful lives and residual values are
reviewed periodically, including at each financial year and adjusted prospectively, if
appropriate.
H. REVENUE RECOGNITION
Revenue is measured at the fair value of the consideration received or receivable.
Amounts disclosed as revenue are net of returns, trade allowances, rebates, GST
and amounts collected on behalf of third parties.
Sale of products
Timing of recognition- Revenue from sale of products is recognised when control
of the products is transferred to customers based on the terms of sale.
Measurement of revenue- Revenue from sales is based on the price specified in the
sales contracts, net of all expected discounts and returns in relation to sales
made until the end of the reporting period
Sale of services-Revenues are recognized as service are provided/rendered.
Interest Income-Interest income is recognized on a time proportion basis
considering the carryingamount and the effective interest rate.
Dividends-Revenue is recognized when the Company’s right to receive the dividend
is established bythe reporting date.
I. FOREIGN CURRENCY TRANSACTIONS
(i) Functional and presentation currency Items included in the financial
statements are measured using the currency of the primary economic
environment in which the entity operates ('the functional currency’). The
financial statements are presented in Indian rupee (INR), which is the
Company’s functional and presentation currency.
(ii) Transactions and balances foreign currency transactions are translated
into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at year end
exchange rates are generally recognised in the statement of profit and loss.
J. RETIREMENT AND OTHER EMPLOYEE BENEFITS
(i) Provident Fund
Provident fund is a defined contribution plan covering eligible employees. The
Company and the eligible employees make a monthly contribution to the
provident fund maintained by the Regional Provident Fund Commissioner equal
to the specified percentage of the basic salary of the eligible employees as per
the scheme. The contributions to the provident fund are charged to the
statement of profit and loss for the year when the contributions are due. The
Companyhas no obligation, other than the contribution payable to the provident
fund.
(ii) Gratuity
Gratuity is a defined benefit obligation plan operated by the Company for its
employees covered under the Company Gratuity Scheme. Since company is
having huge turnover of employee and further employees are appointed are also
only of fixed term of 1 to 2 years hence liability gratuity has provided on
approximate basis actuarial valuation of the concerned year is yet to be
received. However it may not may any significant impact.
(iii) Leave encashment
Accumulated leave, which is expected to be utilized within the next twelve
months, is treated as short-term employee benefit for measurement purposes.
The Company measures the expected cost of such absences as the additional
amount that it expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company has a policy of making payment of all dues against leaves balance
entitled to be carried forward in the same year. Hence as such no Leave
Encashment liability stands off.
K. CASH & CASH EQUIVALENTS
Cash and cash equivalents comprise of cash at bank and in hand and short-term money
market deposits with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of
change in value.
L. INVESTMENT IN SUBSIDIARIES
The investment in subsidiaries are carried in the financial statements at historical
cost except when the investment is classified as held for sale in which case it is
accounted for as non - current assets held for sale and discontinued operations.
Investments in subsidiaries carried at cost are tested for impairment in
accordance with IndAS 36. Any impairment loss reduces the carrying value of the
investment.
M. OTHER INVESTMENT AND FINANCIAL ASSETS
i) Classification
The Company classifies its financial assets in the following measurement
categories:
-those to be measured subsequently at fair value (either through other
comprehensiveincome, 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
Statement of 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
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 change.
ii) 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.
Subsequent measurement of financial assets depends on the Company’s business model
for managing the asset and the cash flow characteristics of the asset.
Equity instruments: The Company subsequently measures all equity investments (other
than investment in subsidiary) at fair value. Where the company’s management
has elected to present fair value gains and losses on equity investments in
other comprehensive income, there is no subsequent reclassification of fair value
gains and losses to profit or loss. Dividends from such investments are recognised
in profit or loss as other income when the Company’s right to receive payments is
established.
Changes in the fair value of financial assets at fair value through profit or loss
are recognised in the other income. Impairment losses (and reversal of
impairment losses) on equity investments measured at FVOCI are not reported
separately from other changes in fair value.
N. OFFSETTING FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and the net amount is reported in the balance
sheet where there is a legally enforceable right to offset the recognized amounts and
there is an intention to settle on a net basis or realize the asset and settle the liability
simultaneously. The legally enforceable right must not be contingent on future events
and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the Company or the counterparty.
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