1.1 Accounting Policies
a. Property, Plant and Equipment (PPE)
Recognition and Measurement
PPE is recognised 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, PPE other than freehold land is stated at
original cost including import duties, non-refundable purchase taxes and any directly attributable costs of
bringing the asset to its working condition for its intended use, net of tax/duty credits availed, if any,
after deducting rebates and trade discounts, less accumulated depreciation and accumulated impairment losses,
if any, If significant parts of an item of PPE have different useful lives, then they are accounted for as
separate items (major components) of PPE. Freehold land is carried at original and historical cost and not
depreciated. PPE is derecognised from the financial statements either on disposal or when no economic
benefits are expected from its use or disposal. Gains or losses arising from disposal are recognised in the
Statement of Profit and Loss in the year of occurrence,
Self-generated PPE is capitalised at cost attributable to bringing the assets to a working condition for
its intended use. PPE which are not ready for intended use as of the balance sheet date are disclosed as
Capital Work-in-Progress. Advances paid towards the acquisition of PPE outstanding at each reporting date are
classified as capital advances under Other Non Current Assets.
Subsequent Expenditure
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, All other repairs and maintenance are charged to
the Statement of Profit and Loss during the period in which they are incurred.
Depreciation & Amortisation
Depreciation on PPE for the year has been provided on all assets on Straight Line Method, pro rata to the
period of use, as per the useful lives prescribed in Schedule II to the Companies Act, 2013, except leasehold
land which is amortised equally over the lease period. Assets costing less than Rs.5,000 are depreciated at
100% in the year of acquisition.
First Time Adoption of Ind AS
The Company has opted to measure all its PPE at the Previous GAAP carrying amounts as deemed cost on the
date of transition to Ind AS.
b. Impairment of Non Financial Assets
The carrying value of assets or cash generating units at each balance sheet date is reviewed for
impairment if any indication of impairment exists. If the carrying amount of the assets exceed the estimated
recoverable amount, an impairment is recognised for such excess amount. The impairment loss is recognised as
an expense in the Statement of Profit and Loss.
c. Inventories
Inventories are valued at the lower of cost and net realisable value (NRV). Raw Materials are valued at
the lower of weighted average cost and NRV, Inventory other than Raw Materials namely Packing Material,
Stores & Spares and Stock-in-Trade are valued at the lower of First-In, First-Out cost and NRV,
Work-in-Progress and Finished Goods include costs of conversion and an appropriate share of production
overheads based on normal production capacity, Cost of inventories include all costs of purchases and other
related costs incurred in bringing the inventories to their present location and condition and excise duty,
if applicable. Slow, non-moving, obsolete and defective inventories identified are duly provided for and
valued at NRV,
d. Financial Instruments
Initial Recognition and Measurement of Financial Assets and Financial Liabilities
The Company recognises a financial asset or a financial liability in its balance sheet when the Company
becomes party to the contractual provisions of the financial instrument. All financial assets and financial
liabilities are initially measured at fair value, except for trade receivables which are measured at their
transaction price if the trade receivables do not contain a significant financing component. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and financial
liabilities are added to or deducted from, as the case may be, the fair value of such assets or liabilities
on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss are recognised immediately in the Statement of
Profit and Loss, Subsequent Measurement of Financial Assets
Financial assets are subsequently measured at amortised cost as these are held within a business model
whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of
the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Derecognition of Financial Assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the
financial asset expire,
Impairment of Financial Assets
The Company recognises twelve month expected credit losses for the financial assets, except trade
receivables, if at the reporting date the credit risk of the financial asset has not increased significantly
since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if
at the reporting date the credit risk on financial asset increases significantly since its initial
recognition. For trade receivables the Company applies a simplified approach which requires expected lifetime
losses to be recognised from initial recognition of the receivables. The Company uses historical default rates
to determine impairment loss of trade receivables. At every reporting date these historical default rates are
reviewed and changes in the forward looking estimates are analysed.
Subsequent Measurement of Financial Liabilities
Financial liabilities are subsequently measured at amortised cost using the effective interest rate (EIR)
method,
Derecognition of Financial Liabilities
A financial liability is derecognised when the obligation specified in the contract is discharged,
cancelled or expires,
e. Cash and Cash Equivalents
Cash and cash equivalents include cash-in-hand, cash-at-bank in Current Accounts and Term Deposits with
the banks with original maturity less than three months which are readily convertible into cash and which are
subject to insignificant risk of change in value, For the purpose of the Statement of Cash Flows, cash and
cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank
overdrafts as they are considered an integral part of the Company s cash management,
f. Share Capital
Ordinary shares are classified as equity, Incremental costs directly attributable to issuance of new
ordinary shares are recognised as a deduction from equity, net of any tax effects,
g. Provisions and Contingent Liabilities
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of a past event and it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation, Provisions are
measured at the best estimate of the expenditure required to settle the present obligation at the Balance
Sheet date, If the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows specific to the liability, using a current pre-tax rate that reflects the
current market assessment of the time value of money and risks specific to the obligation, The unwinding of
the discount is recognised as finance cost,
Contingent liabilities are disclosed in the notes to the financial statements when there is a possible
obligation arising from past events, the existence of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the Company or a
present obligation that arises from past events where it is either not probable that an outflow of resources
will be required to settle the obligation or a reliable estimate of the amount cannot be made,
Provisions and Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the
current best estimates,
h. Leases
Assets taken on lease under which all the risks and rewards of ownership are effectively retained by the
lessor are classified as operating leases, Lease payments under operating leases are recognised as expenses
in the Statement of Profit and Loss on accrual basis on a straight line basis in accordance with the
respective lease agreements,
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards incidental to ownership to the lessee,
i. Revenue Recognition
Revenue from the sale of goods is recognised when all the significant risks and rewards of ownership in
the goods are transferred to the buyer as per the terms of the contract, which generally coincides with the
dispatch of goods to the customers or delivery of the goods to the transporter, there is no continuing
managerial involvement to a degree usually associated with ownership of the goods and the amount of revenue
can be measured reliably, the Company retains no effective control of the goods sold and it is probable that
the economic benefits associated with the transaction will flow to the Company and also the cost associated
with the transaction can be measured reliably,
Revenue is measured at the fair value of the consideration received or receivable after deduction of
trade discounts, volume rebates and taxes and duties collected on behalf of the government which are levied
on sales such as Goods and Service Tax, Value Added Tax etc, and inclusive of excise duty,
Interest income is recognized on accrual basis using the EIR method,
Dividend income on investments is recognised when the right to receive dividend is established, it is
probable that the economic benefits associated with the dividend will flow to the Company and the amount of
dividend can be measured reliably,
Duty benefits against exports are accounted for on accrual basis, when the right to receive them as per
the terms of the entitlement is established in respect of the exports made,
j. Employee Benefits
Post Employment Benefits
Defined Contribution Plan:
Contributions to the Provident Fund, Superannuation Fund, Deposit-linked and Employee State Insurance are
charged to the Statement of Profit and Loss as incurred,
Defined Benefit Plan:
Liability towards Gratuity Fund is determined by an independent actuary, using the Projected Unit Credit
Method, Obligation is measured at the present value of estimated future cash flows using a discount rate that
is determined by reference to the market yields as at the Balance Sheet date on Government Bonds where the
currency and terms of the Government Bonds are consistent with the currency and estimated terms of the
defined benefit obligation,
Provident Fund:
The Company s Provident Fund operates under exemption granted under Section 17(1 )(a) of the Employees
Provident Funds and Miscellaneous Provisions Act, 1952, Conditions for the exemption stipulate that the
employer shall make good deficiency, if any, in the rate of return declared by the Trust as compared to the
interest rate declared by EPFO,
Remeasurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability or asset) and any change in the effect of asset
ceiling (wherever applicable) is recognised in other comprehensive income and is reflected in retained
earnings and the same is not eligible to be reclassified to profit or loss subsequently, Defined benefit
employee costs comprising current service cost, past service cost and gains or losses on settlements are
recognised in the Statement of Profit and Loss as employee benefits expense,
When the benefits of a plan have changed or when a plan is curtailed, the resulting change in benefit
that relates to past service or the gain or loss on curtailment is recognised immediately in the Statement of
Profit and Loss, The Company recognises gains or losses on the settlement of a defined benefit plan when the
settlement occurs,
In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the
defined benefit plans to recognise the obligation on a net basis,
Long Term Employee Benefits
The Company s net obligation in respect of long term employee benefits being long term compensated
absences is the amount of future benefits that employees have earned in return for their service in the
current and prior periods, The liability is determined by an independent actuary, using the Projected Unit
Credit Method, Actuarial gains and losses are recognised immediately as income or expense in the Statement of
Profit and Loss, Obligation is measured at the present value of estimated future cash flows using a discount
rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where
the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the
defined benefit obligation,
k. Research and Development Expenditure
Revenue expenditure on research and development is charged under the respective heads of accounts in the
Statement of Profit and Loss in the year in which it is incurred, Capital expenditure on research and
development is included as part of the relevant Fixed Assets,
l. Borrowing Costs
Borrowing costs consist of interest and other costs that an entity incurs in connection with the
borrowing of funds and is measured with reference to the EIR applicable to the respective borrowings,
Interest and other borrowing costs attributable to qualifying assets are capitalised, Borrowing costs are
expensed in the period in which they occur,
m. Foreign Currency Translations and Transactions
Foreign currency transactions are translated into the functional currency using the exchange rates on the
dates of the transactions, Foreign exchange gain and loss arising from the settlement of these transactions,
and from the translation of monetary assets and liabilities at the reporting date exchange rates are
recognised in the Statement of Profit and Loss, Non-monetary items that are measured based on historical cost
in a foreign currency are translated at the exchange rate on the date of the transaction, The Company has not
entered into any foreign exchange forward contracts during the year,
n. Taxes on Income
Income tax expense/income comprises of current income tax expense/income and deferred tax expense/income,
It is recognised in the Statement of Profit and Loss except to the extent it relates to the items directly
recognised in Other Comprehensive Income or in Equity,
Current tax is the expected income tax payable/(recoverable) in respect of the taxable profit/(tax loss)
for the year and any adjustment to the tax payable or receivable in respect of previous years, It is measured
using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period,
Deferred tax is recognised in respect of temporary differences between the carrying values of assets and
liabilities for financial reporting purposes and the amount used for tax purposes,
A deferred tax liability/asset is recognised based on the expected manner of realisation or settlement of
the carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end
of the reporting period, Deferred tax assets are recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be utilised, Deferred tax assets are
reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax
benefit will be realised,
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to
set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis
or to realise the asset and settle the liability simultaneously, Deferred tax assets and deferred tax
liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes
levied by the same taxation authority,
o. Earnings Per Share
Basic earnings per share is calculated by dividing profit or loss attributable to ordinary equity holders
by the weighted average number of ordinary shares outstanding during the year, For the purpose of calculating
diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive
potential equity shares,
p. Segment Informantion
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief
Operating Decision Maker (CODM), The CODM has identified a single reporting segment namely manufacturing,
trading and sale of Kitchenware,
The Company has one class of Equity Shares having a par value of Rs. 10 per share. Each shareholder is
eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In
the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company
after distribution of all preferential amounts, in proportion to their shareholding.
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