2 Material accounting policies
2.1 Property, Plant & Equipment
Property, plant and equipment are stated in the
balance sheet at cost less accumulated
depreciation. The cost comprises purchase price,
borrowing cost and any other cost directly
attributable to bringing the assets to its working
condition for its intended use. Trade discount,
rebates and recoverable taxes, if any are
deducted in arriving at the purchase price.
Subsequent costs are included in the assets
carrying amount or recognized as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with
the item will flow to the entity and the cost can
be measured reliably.
Depreciation is calculated on fixed assets on
straight line method in accordance with
Schedule II of The Companies Act, 2013 except
for machines in press section. For press section
the life of the assets has, on technical evaluation,
been considered as 8 years instead of 25 years.
Life of tools considered as 3 years.
The Company reviews the residual value, useful
lives and depreciation method annually and, if
expectations differ from previous estimates, the
change is accounted for as a change in
accounting estimate on a prospective basis.
Non-current assets are classified as held for sale
if their carrying amount will be recovered
principally through a sale transaction rather than
through continuing use and a sale is considered
highly probable. They are measured at the lower
of their carrying amount and fair value less costs
to sell. Non-current assets are not depreciated
or amortised while they are classified as held
for sale.
2.2 Inventories
Inventories are valued at cost or net realizable
value, whichever is lower.
Cost of raw materials and stores and spares
are determined on weighted average bases. In
case of Work-in-progress and Finished Goods,
the cost includes cost of raw materials, cost of
conversion, and other costs including overheads
incurred to bring them to their respective present
location and condition.
2.3 Revenue recognition
Revenue from sale of goods is recognized when
all the significant risks and rewards of ownership
are transferred to the buyer, there is no
continuing effective control of the goods
transferred, and the amount of revenue can be
measured reliably.
Interest income is recognized on a time
proportion basis.
Dividend income is recognized when the right
to receive the payment is established.
2.4 Employee benefits
i) Short Term Employee Benefits
Short term employee benefits is
recognized as an expense during the
period when the employee render the
service.
ii) Post-Employment Benefits
a) Defined Contribution Plan
The Company makes specified
monthly contributions towards
Provident fund, Superannuation
Fund. The Company's contribution
is recognized as an expense during
the period in which the employee
renders the related service.
b) Defined Benefits Plan
The Company operates a defined
benefit gratuity plan. The cost of
providing the benefits under this
plan is determined using the
productive unit cost method and
spread over the period during
which the benefit is expected to be
derived from employees services.
The gratuity liability amount is
contributed to the approved
gratuity fund formed exclusively for
gratuity payment to the employees
and is administered by Life
Insurance Corporation of India.
Re-measurement of the defined
benefit plan in are charged to the
Other Comprehensive Income in
the period in which they occur. Re¬
measurements are not reclassified
to the Profit and Loss Statement in
subsequent periods.
c) Other Employee Benefits
Lability in respect of leave
encashment is recognized in the
same manner as the defined
benefit gratuity plan.
2.5 Research & Development
Revenue expenditure on research and
development is charged to Profit and Loss
Statement in the year in which it is incurred.
Capital expenditure on research and
development is included in the respective heads
under fixed assets and depreciation thereon is
charged to Profit and Loss Statement.
2.6 Borrowing costs
Borrowing costs that are directly attributable to
the acquisition or construction of qualifying
assets are capitalized as part of the cost of the
assets. All other borrowing costs are recognized
in the period in which they are incurred. A
qualifying asset is one that necessarily take a
substantial period of time to get ready for their
intended use.
Borrowing cost also includes exchange
differences to the extent regarded as an
adjustment to the borrowing costs.
2.7 Foreign currency transactions
Foreign Currency transaction are initially
recorded at the rate of exchange ruling at the
date of transaction.
Foreign currency monetary item (assets and
liabilities) are translated using the exchange rate
prevailing at the reporting date. Exchange gains
or losses arising on settlement or translation of
monetary items are recognized in the Profit and
Loss Statement.
Exchange gains or losses on foreign currency
borrowings taken prior to 1st April, 2017 which
are related to the acquisition and construction
of qualifying assets are adjusted to the cost of
the assets.
Non-monetary items, which are measured in
terms of historical cost in a foreign currency,
are translated using the exchange rate at the
date of the transaction.
2.8 Taxation
The tax expense for the period comprises current
and deferred tax. Tax is recognized in Profit and
Loss Statement, except to the extent that it relates
to items recognized in Other Comprehensive
Income in which case, the tax is also recognized
in Other Comprehensive Income.
Current Tax
Current tax liability is measured at the amount
expected to be paid to the taxation authorities,
based on tax rates and laws that are enacted or
subsequently enacted at the Balance Sheet date.
Deferred Tax
Deferred tax is recognized on temporary
differences between the carrying amount of
assets and liabilities in the financial statements
and the corresponding tax bases used in the
computation of taxable profit.
Deferred tax liabilities are recognized for all
taxable temporary differences. Deferred tax
assets are recognized for all deductible
temporary differences, the carry forward of tax
credits (Minimum Alternate Tax credit
entitlement) and the carry forward of business
losses and unabsorbed tax depreciation.
Deferred tax liabilities and assets are measured
at the tax rates that are expected to apply in the
period in which the liability is settled or the asset
realized, based on tax rate (and tax laws) that
have been enacted or substantively enacted by
the end of the reporting period. The carrying
amount of deferred tax liabilities and assets are
reviewed at the end of each reporting period.
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