Accounting Policies of Deccan Polypacks Ltd. Company

Mar 31, 2024

2) Significant accounting policies
Statement of compliance

The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS)
specified under Section 133 of the Companies Act, 2013, read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015, as amended.

Basis of preparation

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the
historical cost convention on the accrual basis except for certain financial instruments which are measured at
fair values, the provisions of the Companies Act, 2013 (‘Act’) (to the extent notified) and guidelines issued
by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act
read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Accounting Standards) Amendment Rules, 2016. Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services.

Summary of significant accounting policies

a) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable, taking into account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the government. Revenue does not include sales tax/
value added tax (VAT) as the same is not received by the Company on its own account. Rather, it is tax
collected on value added to the commodity by the seller on behalf of the government. Accordingly, it
is excluded from revenue. Liabilities no longer payable written back have been classified as Other
Income

b) Property, Plant and Equipment

Property, plant & equipment are stated at their cost of acquisition/construction, net of accumulated
depreciation and impairment losses, if any. The cost comprises purchase price, borrowing costs if
capitalization criteria are met, directly attributable cost of bringing the asset to its working condition
for the intended use and initial estimate of decommissioning, restoring and similar liabilities. Each part
of an item of property, plant and equipment with a cost that is significant in relation to the total cost
of the item is depreciated separately. Likewise, when a major inspection is performed, its cost is
recognized in the carrying amount of the plant and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Subsequent expenditure related to an item of property, plant and equipment is added to its book value
only if it increases the future benefits from the existing asset beyond its previously assessed standard
of performance. All other expenses on existing property, plant and equipment, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit
and loss for the period during which such expenses are incurred.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the asset is derecognized.

c) Depreciation on property, plant and equipment

Depreciation is calculated on straight-line method using the following useful lives prescribed under Schedule
II to Companies Act, 2013.

d) Impairment of non financial assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment testing for an asset is required, the Company estimates
the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating
unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly traded companies or other available fair value
indicators.

Impairment losses, including impairment on inventories, are recognised in the statement of profit and loss.
After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining
useful life.

e) Fair value measurement

The Company measures financial instruments, such as investments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:

? In the principal market for the asset or liability, or

? In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:

? Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

? Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable

? Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.

f) Financial Instruments

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

Initial recognition and measurement

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair
value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation
or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the
Company commits to purchase or sell the asset

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified at Amortised Cost
Debt instruments at amortised cost

A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial
assets) is primarily derecognised when:

? The rights to receive cash flows from the asset have expired, or

? The Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a ‘pass¬
through’ arrangement? and either (a) the Company has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise the transferred asset to the extent of the Company’s

continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that reflects the rights and obligations that the Company has
retained.

Financial liabilities:

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, or as payables, as appropriate.

The Company’s financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts.

Subsequent measurement

The subsequent measurement of financial liabilities is at Amortised Cost
Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial
year which are unpaid.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit or loss.

g) Impairment of financial assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets.
Expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant
increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of
expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognised is recognized as an provision for expected credit loss (or gain) in profit
or loss.

h) Inventories

The method of valuation of inventories is as under: i) Raw Materials, Stores and Spares Work-in-process and
Finished Goods : At lower of cost and net realisable value. Cost includes manufacturing expenses and factory
overheads. “Cost for the purpose of valuation of raw materials ( except additives valued at weighted average )
is calculated on FIFO basis and for stores and spares and work-in-process on the basis of weighted average
method”

i) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or less , which are subject to an insignificant risk
of changes in value.

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Mar 31, 2015

Corporate Information:

Deccan Polypacks Ltd (the Company) is a Company registered under Companies Act, 1956 and is located at Sy.No.142/A, IDA Bollaram, Via Miyapur, Jinnaram Mandal, Medak District, Telangana- 502 325. The Company is engaged in manufacturing PP/HDPE Woven Sacks. Equity Shares of the Company are listed on Bombay Stock Exchange.

2.1 Accounting Convention :

The financial statements are prepared under the historical cost convention on accrual basis in accordance with the Generally Accepted Accounting Principles (GAAP) that are followed in India. GAAP comprises the mandatory accounting standards as prescribed by Companies (Accounting Standards) Rules 2006 [which continue to apply under Companies Act, 2013("the Act")] and other applicable provisions of the Act. All incomes and expenditures, having a material bearing on the financial statements, are recognized on an accrual basis.

2.2 Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make 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, actual results could differ from these estimates

2.3 Fixed Assets :

(i) Fixed Assets are stated at cost. Cost includes all costs incidental to acquisition, installation and commissioning of the assets until they are ready for intended use.

(ii) Fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairment loss, being the excess of carrying value over the recoverable value of the assets, is charged to Statement of Profit & Loss, in the respective financial years. The impairment loss recognized in earlier years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in subsequent years.

Depreciation :

Depreciation on Tangible Fixed Assets is provided on straight line method as per the useful life prescribed in Schedule II to the Companies Act, 2013

2.4 Inventories :

The method of valuation of inventories is as under:

i) Raw Materials, Stores and Spares. Work-in-process and Finished Goods :

At lower of cost and net realisable value. Cost includes manufacturing expenses and factory overheads.

"Cost for the purpose of valuation of raw materials (except additives valued at weighted average) is calculated on FIFO basis and for stores and spares and work-in-process on the basis of weighted average method".

2.5 Retirement Benefits :

Provident Fund is administered through Regional Provident Fund Commissioner.

Gratuity and Leave encashment are accounted on accrual basis.

2.6 Customs Duty Drawback Export incentives, Insurance Claims etc., are recognized only when it is reasonably certain that the ultimate collection will be made.

2.7 Government Grants :

Capital investment subsidy received by the company is treated as Capital Reserve.

2.8 Borrowings Costs :

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing cost incurred for acquiring, construction or production of assets are capitalized as part of the cost of such assets.

2.9 Income taxes :

i) Deferred income tax is provided, using the liability method, on all timing differences at the balance sheet date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.

ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted at the balance sheet date.

2.10 Contingent Liabilities :

Contingent Liabilities arising from claims, litigation, assessment, fines , penalties etc., are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.

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Mar 31, 2013

1.1 Accounting Convention : The financial statements have been prepared on the basis of going concern, under the historical cost convention. The company follows accrual system of accounting and recognises income and expenditure on accrual basis unless otherwise stated.

1.2 Fixed Assets:

i). Fixed Assets are stated at cost. Cost includes all costs incidental to acquisition, installation and commissioning of the assets until they are ready for intended use.

ii) Fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairement loss, being the excess of carrying value over the recoverable value of the assets, is charged to Profit & Loss Account, in the respective financial years. The impairment loss recognized in earlier years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in subsequent years. ,

1.3 Depreciation:

Depreciation on Fixed Assets is provided on straight line method in accordance with the provisions of Schedule XIV of the Companies Act, 1956 as amended from time to time.

1.4. Foreign Currency Translation :

Foreign currency transactions have been translated at the Exchange Rate Prevalent on the date of transaction. Gain/Loss arising out of fluctuation in the exchange rates on realization is treated as income/ expenditure.

1.5 Inventories:

The method of valuation of inventories is as under:

i) Raw Materials, Stores and Spares.

Work-in-process and Finished Goods:

At lower cost and net realisable value.

Cost includes manufacturing expenses and factory overheads.

"Cost for the purpose of valuation of raw materials (except additives valued at weighted average) is calculated on FIFO basis and for stores and spares and work-in-process on the basis of weighted average method"

1.6 Retirement Benefits:

Provident Fund is administered through Regional Provident Fund Commissioner, Group Gratuity Scheme is administered through a scheme with Life Insurance Corporation of India. The contributions to the above said funds are charged against revenue. Leave encashment payable at the time of retirement is charged to Profit and Loss account based on the assumption that such benefits are payable to all the employees at the end of accounting year.

1.7 Customes Duty Drawback Export incentives, Insurance Claims etc., are recognized only when it is reasonably certain that the ultimate collection will be made.

1.8 Government Grants:

Capital investment subsidy received by the company is treated as Capital Reserve.

1.9 Borrowings costs:

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing cost incurred for acquiring, construction or production of assets are capitalized as part of the cost of such assets.

1.10 Income taxes:

i) Deferred income tax is provided, using the liability method, on all timing differences at the balance sheet date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.

ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted at the balance sheet date.

iii) Minimum Alternate Tax (MAT) Credit entitlement:

Mat Credit entitlement represents the amounts paid in a year under Section 115JA/115JB of the Income Tax Act 1961 (''IT ACT'') which is in excess of the tax payable, computed on the basis of normal provisions of the IT Act.

Such excess amount can be carried for set off in future periods in accordance with die relevant provisions of me IT Act. Since such credit represents a resource controlled by die company as a result of past events and mere is evidence as at me reporting date mat the Company will pay normal income tax during the specified period, when such credit would be adjusted, me same has been disclosed as ''MAT Credit entitlement" in the balance sheet with a corresponding credit to the profit and loss account, as a separate line item.

Such assets are reviewed at each balance sheet date and written down to reflect me amount mat will not be available as a credit to be set off in future, based on me applicable taxation law men in force.

1.11 Contingent Liabilities:

Contingent Liabilities arising from claims, litigation, assessment, fines, penalties etc., are provided for when it is probable mat a liability may be incurred and the amount can be reliably estimated.

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Mar 31, 2012

1.1 Accounting.Convention : The financial statements have been prepared on the basis of going concern, under the historical cost convention. The company follows accrual system of accounting and recognises income and expenditure on accrual basis unless otherwise stated.

1.2 Fixed Assets:

i) Fixed Assets are stated at cost. Cost includes all costs incidental to acquisition, installation and commissioning of the assets until they are ready for intended use.

ii) Fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairement loss, being the excess of carrying vajue over the recoverable value of the assets, is charged to Profit & Loss Account, in the respective financial years. The impairment loss recognized in earlier years is reversed iri cases where the recoverable value exceeds the carrying value, upon the reassessment in subsequent years.

1.3 Depreciation:

Depreciation on Fixed Assets is provided on straight line method in accordance with the provisions of Schedule XIV of the Companies Act, 1956 as amended from time to time.

1.4. Foreign Currency Translation:

Foreign currency transactions have been translated at the Exchange Rate Prevalent on the date of transaction. Gain/Loss arising out of fluctuation in the exchange rates on realization is treated as income/ expenditure.

1.5 Inventories:

The method of valuation of inventories is as under:

i) Raw Materials, Stores and Spares.

Work-in-process and Finished Goods :

At lower cost and net realisable value.

Cost includes manufacturing expenses and factory overheads.

"Cost for the purpose of valuation of raw materials (except additives valued at weighted average) is calculated on FIFO basis and for stores and spares and work-in-process on the basis of weighted average method"

1.6 Retirement Benefits:

Provident Fund is administered through Regional Provident Fund Commissioner, Group Gratuity Scheme is administered through a scheme with Life Insurance Corporation of India. The contributions to the above said funds are charged against revenue. Leave encashment payable at the time of retirement is charged to Profit and Loss account based on the assumption that such benefits are payable to all the employees at the end of accounting year.

1.7 Customes Duty Drawback Export incentives, Insurance Claims etc., are recognized only when it is reasonably certain that the ultimate collection will be made.

1.8 Government Grants:

Capita) investment subsidy received by the company is treated as Capital Reserve.

1.9 Borrowings costs:

Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing cost incurred for acquiring, construction o. production of assets are capitalized as part of the cost of such assets.

1.10 Income taxes*

i) Deferred income tax is provided, using the liability method, on all timing differences at the balance sheet date between the tax base

of assets and liabilities and their carrying amounts for financial reporting purposes.

iil Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted at the balance sheet date.

1.11 Contingent Liabilities:

Contingent Liabilities arising from claims, litigation, assessment, fines, penalties etc., are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.

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Mar 31, 2010

A) Accounting Convention : The financial statements have been prepared on the basis of going concern, under the historical cost convention. The company follows accrual system of accounting and recognizes income and expenditure on accrual basis unless otherwise stated.

b) Fixed Assets :

(i) Fixed Assets are stated at cost. Cost includes all costs incidental to acquisition, installation & commissioning of the assets until they are ready for intended use.

(ii) Fixed assets are assessed for any indication of impairment at the end of each financial year. On such indication, the impairment Joss, being the excess of carrying value over the recoverable value of the assets, is charged to Profit & Loss account, in the respective financial years. The impairment loss recognized in earlier years is reversed in cases where the recoverable value exceeds the carrying value, upon the reassessment in subsequent years.

c) Depreciation : Depreciation on Fixed Assets is provided.pn straight line method in accordance with the provisions of Schedule XIV of the Companies Act, 1956 as amended from time to time.

d) Foreign Currency Translation: Foreign currency transactions have been translated at the Exchange Rate Prevalent on the date of transaction. Gain/Loss arising out of fluctuation in the exchange rates on realization is treated as income/expenditure.

e) Inventories : The method of valuation of inventories is as under: (i) Raw Materials, Stores and Spares, Work-in-process and Finished Goods : At lower of cost and net Realisable value.

Cost includes manufacturing expenses and factory > overheads.

"Cost for the purpose of valuation of raw materials (except additives valued at weighted average) is calculated on FIFO basis and for stores and spares and work-in-process on the basis of weighted average method".

f). Retirement Benefits : Provident Fund is administered through Regional Provident Fund Commissioner. Group Gratuity Scheme is administered through a scheme with Life Insurance Corporation of India. The contributions to the above said funds are charged against revenue. Leave encashment payable at the time of retirement is charged to profit and loss account based on the assumption that such benefits are payable to all the employees at the end of the accounting year.

g) Customs Duty Drawback, Export incentives, Insurance claims etc. are recognized only when it is reasonably certain that the ultimate collection will be made.

h) Government Grants : Capital investment subsidy received by the Company is treated as Capital Reserve.

i) Borrowing costs : Borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing cost incurred for acquiring, construction or production of assets are capitalized as part of the cost of such assets.

j) Income taxes:

i) Deferred income tax is provided, using the liability method, on all timing differences at the balance sheet date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.

ii) Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted at the balance sheet date.

k) Contingent Liabilities : Contingent Liabilities arising from claims, litigation, assessment, fines, penalties etc., are provided for when it is probable that a liability may be incurred and the amount can be reliably estimated.