Page 246 - BCML AR 2019-20

FINANCIAL STATEMENTS

Notes forming part of the Consolidated Financial Statements

Note No. : 2 Significant accounting policies (contd.)

applicable, in the Consolidated Statement of Changes in Equity. Unrealised gains and losses resulting from transactions between the
Company and the associates are eliminated to the extent of the interest in the associates.
If the Company’s share of losses of associates equals or exceeds its interest in the associates (which includes any long term interest that,
in substance, form part of the Group’s net investment in the associate), the Group discontinues recognising its share of further losses.
Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on
behalf of the associates. If the associate subsequently reports profits, the Company resumes recognising its share of those profits only
after its share of the profits equals the share of losses not recognised.
The aggregate of the Company’s share of profit or loss of associates is shown on the face of the consolidated statement of profit and
loss.
The consolidated financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date, i.e.,
year ended on 31st March.
When necessary, adjustments are made to bring the accounting policies in line with those of the Company.
After application of the equity method, the Company determines whether it is necessary to recognise an impairment loss on its
investment in its associate. At each balance sheet date, the Company determines whether there is objective evidence that the
investment in the associates is impaired. If there is such evidence, the Company calculates the amount of impairment as the difference
between the recoverable amount of the associate and its carrying value, and then recognises the loss as ‘Share of profit/loss of
associates’ in the consolidated statement of profit and loss.
2.2 Recent pronouncements
New and revised standards adopted by the Company
Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies
(Indian Accounting Standards) Second Amendment Rules, has notified “Ind AS” 116 - Leases which replaces the existing lease
standard, “Ind AS” - 17 Leases and other interpretations and added Appendix C, Uncertainty over Income Tax Treatments to Ind
AS12 - Income Taxes .
(a) Ind AS 116 - Leases
The Company has applied “Ind AS” – 116 - Leases, with effect from 1st April 2019 under modified retrospective approach with
cumulative effect of adoption being given effect to on the date of application. Impact in this respect has been given in Note No.
37(13).
(b) Appendix C, Uncertainty over Income Tax treatments to Ind AS 12 – Income taxes have also been revised with effect from the
said date. Revision in the standard did not have any material impact on the financial statements.
2.3 Revenue recognition
Contract with a customer is accounted for only when it has commercial substance and all of the following criteria are met:
(i) Parties to the contract have approved the contract and are committed to performing their respective obligations;
(ii) Each party’s rights regarding the goods or services to be transferred and payment terms there against can be identified;
(iii) Consideration in exchange for the goods or service to be transferred is collectible and determinable.
(a) Revenue from operations
Revenue is measured based on the consideration specified in the contract with the customers and excludes amounts collected
on behalf of third parties. The revenue from sales is recognized when control over the goods or services have been transferred
and/or goods/services are delivered/provided to the customers. Delivery occurs when the goods have been shipped or delivered
to the specific location as the case may be and the customer has either accepted the goods under the contract or Company has
sufficient evidence that all the criteria for acceptance have been satisfied. For further information, Refer to Note No. 37(11).
Returns, discounts and rebates as determined are deducted from sales.

244 | Balrampur Chini Mills Limited