1.0 Corporate Information
ARTIFICIAL ELECTRONICS INTELLIGENT MATERIAL LIMITED is a Limited
Company, incorporated under the provisions of Companies Act, 1956 and having
CIN:L31100TN1992PLC156105. The Company is mainly engaged in the business of
manufacturing and sale of specialty materials and allied products. The Registered
office of the Company is situated at Building No GB-200B Green Base Industrial &
logistics Park, Vadakkupattu Village, Chengalpattu District, Tamil Nadu - 603204.
1.1 Basis of preparation of financial statementsa. Accounting Convention: -
These Standalone financial statements of the Company have been prepared in
accordance with the Indian Accounting Standards ("Ind AS"] notified under Section
133 of the Companies Act, 2013 read with the Companies (Indian Accounting
Standards] Rules, 2015, as amended from time to time, and other relevant provisions
of the Companies Act, 2013.
The financial statements have been prepared on an accrual basis under the historical
cost convention except for certain financial instruments and other items that are
measured at fair value at the end of each reporting period, as required by Ind AS. The
financial statements are presented in accordance with the requirements of Division II
of Schedule III to the Companies Act, 2013.
b. Functional and Presentation Currency
The functional and presentation currency of the company is Indian rupees. This
financial statement is presented in Indian rupees. Due to rounding off, the numbers
presented throughout the document may not add up precisely to the totals and
percentages may not precisely reflect the absolute figures.
All amounts disclosed in the financial statements and notes thereto are presented in
^ Lakhs and have been rounded off to the nearest lakh as permitted under Schedule
III to the Companies Act, 2013, unless otherwise stated.
c. Use of Estimates and Judgments
The preparation of the Ind AS financial statements in conformity with the generally
accepted accounting principles in India requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities as of the Balance
Sheet date, reported amount of revenue and expenses for the year and disclosure of
contingent labilities and contingent assets as of the date of Balance Sheet. The
estimates and assumptions used in these Ind AS financial statements are based on
management's evaluation of the relevant facts and circumstances as of the date of the
Ind AS financial statements. The actual amounts may differ from the estimates used
in the preparation of the Ind AS financial statements and the difference between
actual results and the estimates are recognized in the period in which the results are
known/materialize.
Estimates and underlying assumptions are reviewed at each balance sheet date.
Revisions to accounting estimates are recognized in the period in which the estimate
is revised and in future periods affected.
Particular, information about significant areas of estimation uncertainty and critical
judgments in applying accounting policies that have the most significant effect on the
amounts recognized in the financial Statement are as below:
1. Evaluation of recoverability of deferred tax assets/Liabilities;
2. Useful lives of property, plant and equipment and intangible assets;
3. Provisions and Contingencies;
4. Provision for income taxes, including amount expected to be paid/
recovered for uncertain tax positions;
5. Recognition of Deferred Tax Assets/Liabilities
6. Valuation of Financial Instruments;
d. Current and Non - Current Classification
The Company presents assets and liabilities in the Balance Sheet based on current/
non-current classification.
An asset / liability is treated as current when it is: -
i. Expected to be realized or intended to be sold or consumed or settled in
normal operating cycle.
ii. Held primarily for the purpose of trading.
iii. Expected to be realized/ settled within twelve months after the reporting
period, or.
iv. There is no unconditional right to defer the settlement of the liability for at
least twelve months after the reporting period.
Cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period.
All other assets and liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities
respectively.
1.2 ACCOUNTING POLICIES:(A) Property, Plant and Equipment
All items of property, plant and equipment are stated at historical cost less
depreciation. Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Cost includes purchase price, non-recoverable taxes and duties, labour cost and direct
overheads for self-constructed assets and other direct costs incurred up to the date
the asset is ready for its intended use.
Subsequent costs are included in the asset's carrying amount or recognized 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. The carrying amount of any component accounted for as a
separate asset is derecognized when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are incurred.
Depreciation is provided on the Straight-Line Method (SLM) over the estimated useful
lives of the assets considering the nature, estimated usage, operating conditions, past
history of replacement, anticipated technological changes, manufacturers’ warranties
and maintenance support. The Company provides pro-rata depreciation from the day
the asset is put to use and for any asset sold, till the date of sale.
The useful lives of assets are reviewed at each reporting date and adjusted
prospectively, where appropriate._
Projects under commissioning and other Capital work-in-progress are carried at cost
comprising of direct and indirect costs, related incidental expenses and attributable
interest. Depreciation is not recorded on capital work-in-progress until construction
and installation are complete and the asset is ready for its intended use.
An item of property, plant and equipment is derecognized on disposal. Any gain or
loss arising from recognition of an item of property, plant and equipment is included
in profit or loss.
(B) Intangible Assets
Intangible assets are recorded at cost (including directly attributable costs), net of
amortization and impairment. Subsequent costs are capitalized only when future
economic benefits are probable and measurable. Research costs are expensed, while
eligible development costs are capitalized and amortized once development is
complete. Useful lives are reviewed annually, and gains or losses on disposal are
recognized in the Statement of Profit and Loss.
The company does not have any intangible assets.
(C) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to
amortization and are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be impaired. Other assets are
tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the
amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs of disposal and
value in use.
The Company assesses at each balance sheet date whether there is any indication that
an asset may be impaired. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the asset or the
recoverable amount of the cash-generating unit to which the asset belongs is less than
its carrying amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognized in the statement of profit
and loss. If at the balance sheet date there is an indication that a previously assessed
impairment loss no longer exists, the recoverable amount is reassessed and the asset
is reflected at the recoverable amount subject to a maximum of depreciable historical
cost.
(D) Leases (Where the Company is the lessee)
The Company assesses at contract inception whether a contract is, or contains, a lease.
That is, if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.
The Company applies a single recognition and measurement approach for all leases,
except for short-term leases and leases of low-value assets. The Company recognizes
lease liabilities to make lease payments and right-of-use assets representing the right
to use the underlying assets.
Right of use assets
The Company recognizes right-of-use assets at the commencement date of the lease
(i.e., the date the underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognized, initial direct costs incurred, and
lease payments made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease term and the estimated useful lives of the assets.
Lease Liabilities
At the commencement date of the lease, the Company recognizes lease liabilities
measured at the present value of lease payments to be made over the lease term. The
lease payments include fixed payments (including in substance fixed payments) less
any lease incentives receivable, variable lease payments that depend on an index or a
rate, and amounts expected to be paid under residual value guarantees.
In calculating the present value of lease payments, the Company uses its incremental
borrowing rate at the lease commencement date because the interest rate implicit in
the lease is not readily determinable. After the commencement date, the amount of
lease liabilities is increased to reflect the accretion of interest and reduced for the
lease payments made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease term, a change in the lease
payments (e.g., changes to future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the assessment of an option to
purchase the underlying asset.
(E) Segment Reporting
The Company is operating in single business segments. Hence, reporting requirement
of Segment reporting does not arise.
(F) Statement of Cashflow
Standalone Cash Flows Statement of the company are reported using the indirect
method, whereby profit before tax is adjusted for the effects of transactions of a
noncash nature, any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or financing Cash
Flows. The cash flows from operating, investing and financing activities of the
Company are segregated.
(G) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and highly liquid
investments with an original maturity of up to three month that are readily
convertible into cash and which are subject to an insignificant risk of changes in value.
(H) Foreign Currency Transactions
i. Initial Recognition
On initial recognition, all foreign currency transactions are recorded by
applying to the foreign currency amount the exchange rate between the
functional currency and the foreign currency at the date of the transaction.
ii. Subsequent Recognition
As at the reporting date, non-monetary items which are carried in terms of
historical cost denominated in a foreign currency are reported using the
exchange rate at the date of the transaction. All non-monetary items which
are carried at fair value or other similar valuation denominated in a foreign
currency are reported using the exchange rates that existed when the
values were determined.
All monetary assets and liabilities in foreign currency are restated at the
end of accounting period. Exchange differences on restatement of all other
monetary items are recognised in the Statement of Profit and Loss.
(I) Income Taxes
The tax expense for the period comprises of current tax and deferred income tax. Tax
is recognized in Statement of Profit and Loss, except to the extent that it relates to
items recognized in the Other Comprehensive Income or in Equity. In which case, the
tax is also recognized in Other Comprehensive Income or Equity.
I. Current tax: -
Current tax is measured at the amount expected to be paid to the tax
authorities in accordance with the taxation laws prevailing in the respective
jurisdictions. 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.
II. Deferred tax: -
Deferred tax is recognized using the balance sheet approach. Deferred tax
assets and liabilities are recognized for deductible and taxable temporary
differences arising between the tax base of assets and liabilities and their
carrying amount in financial statements.
Deferred tax asset is recognized to the extent that it is probable that taxable profit
will be available against which such deferred tax assets can be realized. The carrying
amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax asset to be utilized.
|