Amal Ltd 2018-19

59 Background Amal Ltd (the Company) is a public company limited by shares, incorporated and domiciled in India. The Company is a subsidiary company of Atul Ltd. Its registered office is located at Atul House, 310 B, Veer Savarkar Marg, Dadar (West), Mumbai 400 028, Maharashtra, India and its principal place of business is located at Ankleshwar 393 002, Gujarat, India. The Company is engaged in manufacturing of bulk chemicals such as Sulphuric acid and Oleum and their downstream products such as Sulphur dioxide and Sulphur trioxide. Note 1 Significant accounting policies This Note provides a list of the significant accounting policies adopted by the Company in the preparation of these Financial Statements. These policies have been consistently applied to all the years presented, unless otherwise stated. a) Basis of preparation: i) Compliance with Ind AS: The Financial Statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 {the Act read with Rule 3 of the Companies (Indian Accounting Standards)} Rules, 2015 and other relevant provisions of the Act as amended. ii) Historical cost convention: The Financial Statements have been prepared on a historical cost basis except for the following: a) Certain financial assets and liabilities: measured at fair value b) Defined benefit plans: plan assets measured at fair value iii) Recent accounting pronouncements: Standards issued but not yet effective: Ind AS 116 Leases: On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing Ind AS 17 Leases and related Interpretations. The Standard sets out the principles for recognition, measurement, presentation and disclosure of leases for both parties to a contract that is, the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statement of Profit and Loss. The Standard also contains enhanced disclosure requirements for lessee. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17. The effective date for adoption of Ind AS 116 is annual periods beginning on or after April 01, 2019. The Standard permits two possible methods of transition: a) Full retrospective – Retrospectively to each prior period presented applying Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors b) Modified retrospective – Retrospectively, with the cumulative effect of initially applying the Standard recognised at the date of initial application Under modified retrospective approach, the lessee records the lease liability as the present value of the remaining lease payments, discounted at the incremental borrowing rate and the right-of- use asset either as: a) its carrying amount as if the Standard had been applied since the commencement date, but discounted at incremental borrowing rate of the lessee at the date of initial application or b) an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments related to that lease recognised under Ind AS 17 immediately before the date of initial application. The Company will adopt the Standard on April 01, 2019 by using the ‘Modified Retrospective Approach’ for transitioning to Ind AS 116, and take the cumulative adjustment to retained Notes to the Financial Statements