1) Statement of Compliance
In accordance with the notification issued by the Ministry of Corporate Affairs, the
Company has adopted Indian Accounting Standards (referred to as "IND AS")
notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect
from April 1, 2016.
These financial statements have been prepared in accordance with IND AS notified
under the Companies (Indian Accounting Standards) Rules, 2015 read with Section
133 of the Companies Act, 2013.
2) Use of Estimates
The preparation and presentation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and liabilities on
the date of financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between the actual result and estimates are
recognized in the period in which the results are known / materialized.
3) Revenue Recognition
Revenue from the sale of products is recognized on transfer of all significant risks
and rewards of ownership to the buyer which coincides with dispatch of products to
customers. Interest income is recognized on a time proportion basis. Dividend
income from investment is accounted for when the right to receive is established.
4) Property Plant and Equipment
Items of property, plant, & equipment are stated at cost less accumulated
depreciation and accumulated impairment losses, if any. Cost is inclusive of freight,
duties, taxes or levies (net of recoverable taxes) and any directly attributable cost of
bringing the assets to their working condition for intended use.
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".
Profit or Loss on disposal / scrapping / write off / retirement from active use of an
item of property, plant and equipment is recognized in the statement of profit and
loss.
Depreciation / Amortization
The company has assessed the useful lives of fixed assets as per Schedule II to the
Companies Act, 2013. Accordingly, depreciation has been computed on useful lives
based on technical evaluation of relevant class of assets including components
thereof. Useful lives and residual values are reviewed annually. Depreciation is
provided as per the written down value method computed basis useful lives of fixed
assets as follows:
Buildings : 60 years
Plant & Machinery : 10 years
Office Equipments : 5 years
Furniture and fixtures : 10 years
Vehicles : 10 years
Information technology equipment : 3 years
Freehold land is not depreciated, Leasehold land and related improvements are
amortized over the period of the lease.
5) Financial Instruments
Financial assets and liabilities are recognized when the Company becomes a party to
the contractual provisions of the instruments. Financial assets and liabilities are
initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or loss) are added to or
deducted from the fair value measured on initial recognition of financial asset or
financial liability.
Cash and Cash equivalents
The Company considers all highly liquid financial instruments, which are readily
convertible into known amounts of cash that are subject to an insignificant risk of
change in value and having original maturities of three months or less from the date
of purchase, to be cash equivalents. Cash and cash equivalents consist of balances
with banks and liquid - debt mutual funds which are unrestricted for withdrawal
and usage.
Financial Assets at Amortized Cost
Financial assets are subsequently measured at amortized cost if these financial assets
are held within a business whose objective is to hold these assets to collect
contractual cash flows and the contractual terms of the financial assets give rise on
specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if
these financial assets are held within a business whose objective is achieved by both
collecting contractual cash flows on specified dates that are solely payments of
principal and interest on the principal amount outstanding and selling financial
assets.
The Company has made an irrevocable election to present in other comprehensive
income subsequent changes in the fair value of equity investments not held for
trading.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is
measured at amortized cost or at fair value through other comprehensive income on
initial recognition. The transaction costs directly attributable to the acquisition of
financial assets and liabilities at fair value through profit or loss are immediately
recognized in profit or loss.
Financial Liabilities
Financial liabilities are measured at amortized cost using the effective interest
method.
Equity Instruments
An equity instrument is a contract that evidences residual interest in the assets of the
company after deducting all of its liabilities. Equity instruments recognized by the
Company are recognized at the proceeds received net off direct issue cost.
Investment in associates
Investment in associates is measured at cost less impairment.
6) Inventories
a) Raw materials, packing material and consumables are carried at a lower cost and
net realizable value. Cost is determined on a weighted average basis. Purchased
goods-in-transit are carried at cost. Work-in-progress is carried out at a lower cost
and net realizable value. Stores and spare parts are carried at lower cost and net
realizable value. Finished goods produced or purchased by the Company are carried
at a lower cost and net realizable value. Cost included direct material and labour cost
and proportion of manufacturing overheads.
b) Book Debts, Advances & Deposits
Balances considered irrecoverable are written off and those considered doubtful are
provided for.
7) Employee / Retirement Benefits
The company makes contributions to the Provident Fund, Employee State Insurance,
National Pension System etc. for eligible employees and these contributions are
charged to statement of profit and loss on an accrual basis.
Retirement benefit in the form of Gratuity, is considered as defined benefit obligation.
The company has established an irrevocable trust to administer gratuity. The Trust
has taken a policy under the Group Gratuity-cum-Life Insurance Scheme from LIC
of India covering all the eligible employees. The company makes payment of annual
premium and contribution to the trust as demanded by LIC of India. Payment made
to Trust is charged to the Statement of Profit and Loss for the year.
Leave Encashment is accounted for on the basis of Actuarial Valuation.
8) Foreign Currency Transactions
Monetary items denominated in foreign currency as at the Balance Sheet date are
converted, at exchange rates prevailing on that date. Exchange differences are recognized
in the Statement of Profit & Loss.
9) Borrowing Cost
Borrowing costs directly attributable to acquisition or construction of items of
property, plant and equipment which take a substantial period of time to get ready
for their intended use are capitalized as part of the cost of that asset. All other
borrowing costs are charged to the statement of profit and loss in the period in
which they are incurred.
10) Leases
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards incidental to ownership of the asset to the
lessee. All other leases are classified as operating leases.
Payments made under operating leases are recognized as an expense in the
statement of profit and loss on a written down value basis over the term of the lease
unless such payments are structured to increase in line with expected general
inflation to compensate for the lessor's expected inflationary cost increases, in which
case the same is recognized as an expense in line with the contractual term.
11) Income Tax
Income tax expenses comprises of current tax and deferred tax. Income tax expense
is recognized in the statement of profit and loss, except when it is related to items
recognized in the other comprehensive income or items recognized directly in the
equity. In such cases, the income tax expense is also recognized in the other
comprehensive income or directly in the equity as applicable.
Deferred taxes are recognized basis the balance sheet approach on temporary
differences, being the difference between the carrying amount of assets and liabilities
in the balance Sheet and its corresponding tax base, that originate in one period and
are capable of reversal in one or more subsequent periods. Deferred tax assets are
recognized only to the extent it is probable that future taxable profits will be
available against which such assets can be utilized.
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