Reporting Entity:
Jaykay Enterprises Limited is a company domiciled in India and limited by shares (CIN L55101UP1961PLC001187) which are
publicly traded on BSE Limited. The address of the company's registered office is Kamla Tower, Kanpur-208001. The company
has diversified itself into Additive Manufacturing systems, Prototyping, powder metallurgy, large scale Digital manufacturing,
Reverse Engineering and Plant modelling. In the area of Defence & Aerospace, we are engaged in engineering products across
various industry verticals, software designing and development, manufacturing of parts and accessories used in defence and
aerospace sector. Our work includes composite applications, under water mines and machining for aerospace sector.
1.1 Basis of preparation:
The Standalone Financial Statements of the Company have been prepared in accordance with Indian Accounting
Standards (Ind-ASs) as notified by the Ministry of Corporate Affairs ("MCA") under section 133 of the Companies Act,
2013 ("Act"), read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other
relevant provisions of the Act.
The Financial Statements have been prepared as a going concern on accrual basis of accounting.
The Financial Statements are presented in Indian Rupees (INR) which is the company's functional currency, and the values
are rounded to the nearest lakh (up to two decimals) except when otherwise indicated.
1.2 Current and non-current Classification:
The Company presents assets and liabilities In the Balance Sheet based on current/ non-current classification. An asset is
treated as current when:
a) it expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
b) it holds the asset primarily for the purpose of trading;
c) it expects to realize the asset within twelve months after the reporting period; or
d) the asset is cash or a cash equivalent (as defined in Ind AS 7) unless the asset is restricted from being exchanged or used
to settle a liability for at least twelve months after the reporting period.
All other assets are classified as.non-current.
An entity shall classify a liability as current when:
(a) it expects to settle the liability in its normal operating cycle.
(b) it holds the liability primarily for the purpose of trading.
(c) the liability is due to be settled within twelve months after the reporting period; or
(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting
period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect Its classification.
All other liabilities are classified as non-current.
1.3 Revenue recognition:
1.3.1 Sale of goods and Services
(a) Revenue is recognized at the time of the transfer of control of promised goods or services to customers upon
the satisfaction of performance obligation under the contract in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for those goods or services.
Ind AS 115 "Revenue from contracts with customers" provides a control - based revenue recognition model
and provides a following five step application approach to be followed for revenue recognition:
• Identify the contract(s) with a customer.
• Identify the performance obligations.
• Determine the transaction price and identify the payment terms for the goods or services to be
transferred.
• Allocate the transaction price to the performance obligations.
• Recognise revenue when or as an entity satisfy performance obligation
1.3.2 Interest
Interest income is recognized using the Effective Interest Method.
1.3.3 Dividend
Dividend income from investments is recognized when the rights to receive payment is established.
1.3.4 Other Claims
Claims (including interest on delayed realization from customers) are accounted for, when there is a significant
certainty that the claims are realizable.
1.4 Leases:
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title
may or may not eventually be transferred.
An operating lease is a lease other than a finance lease.
1.1.1 Company as a lessor
Operating leases: Lease income from operating leases (excluding amounts for services such as insurance
and maintenance) is recognized in income on a straight-line basis over the lease term, unless either:
(a) another systematic basis is more representative of the time pattern in which use benefit derived from
the leased asset is diminished, even if the payments to the lessors are not on that basis; or
(b) the payments to the lessor are structured to increase in line with expected general inflation to compensate for
the lessor's expected inflationary cost increases. If payments to the lessor vary according to factors other than
Inflation, then this condition is not met.
Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased
asset and recognized as an expense over the lease term on the same basis as lease income.
Finance leases: Amounts due from lessees under finance leases are recorded as receivables at the Company's net investment
in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the
net investment outstanding in respect of the lease.
1.6 Property, Plant and Equipment (PPE)
Land is carried at historical cost. Historical cost includes expenditure which are directly attributable to the acquisition of
the land like, rehabilitation expenses, resettlement cost etc.
After recognition, an item of all other Property, plant and equipment are carried at its cost less any accumulated
depreciation and any accumulated impairment losses under Cost Model. The cost of an item of property, plant and
equipment comprises:
(a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and
rebates.
(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of
operating in the manner intended by management.
(c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the
obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item
during a particular period for purposes other than to produce inventories during that period.
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
depreciated separately. However, significant part(s) of an item of PPE having same useful life and depreciation method
are grouped together in determining the depreciation charge.
Costs of the day to-day servicing described as for the 'repairs and maintenance' are recognized in the statement of profit
and loss in the period in which the same are incurred.
Subsequent Measurement
Subsequent costs of replacing parts of an item of property, plant and equipment are recognized in the carrying amount of
the item, if 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 those parts that are replaced is derecognized in accordance
with the derecognition policy mentioned below.
When major inspection is performed, its cost is recognized in the carrying amount of the item of property, plant and
equipment as a replacement if 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. Any remaining carrying amount of the cost of the previous
inspection (as distinct from physical parts) is derecognized .
An item of Property, plant or equipment is derecognized upon disposal or when no future economic benefits are expected
from the continued use of assets. Any gain or loss arising on such de recognition of an item of property plant and
equipment is recognized in profit and Loss.
Depreciation
Property Plant and Equipment (PPE)
Depreciation on PPE is provided in accordance with the manner and useful life as specified in Schedule II of the Companies
Act, 2013, on straight line method (SLM) on pro-rata basis (monthly pro-rata for bought out assets).
Impairment of Assets
The Company assesses on a forward-looking basis the expected credit losses associated with its assets carried at amortized
cost and
.FVTOCIdebt instruments. The impairment methodology applied depends on whether there has been a significant increase
in credit risk.
With regard to trade receivable, the Company applies the simplified approach as permitted by Ind AS 109, Financial
Instruments, which requires expected lifetime losses to be recognized from the initial recognition of the trade receivables.
The Company assesses at the end of each reporting period 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. An asset's recoverable amount is
the higher of the asset's or cash-generating unit's value in use and its fair value less costs of disposal, and 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, in which case the recoverable amount is determined for the cash-generating unit to which the
asset belongs.
1.7 Investment Property
Property (land or a building or part of a building or both) held to earn rentals or for capital appreciation or both, rather than
for, use in the production or supply of goods or services or for administrative purposes; or sale In the ordinary course of
businesses are classified as investment property.
Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing
costs.
Investment properties are depreciated using the straight-line method over their estimated useful lives.
1.8 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.
1.8.1 Financial assets
1.1.1 Initial recognition and measurement
All financial assets are recognized initially at fair value, in the case of financial assets not recorded at fair value
through profit or loss, plus 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 marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to
purchase or sell the asset.
1.1.2 Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories: Debt instruments at
amortised cost Debt instruments at fair value through other comprehensive income (FVTOCI)
Debt instruments, derivatives, and equity instruments at fair value through profit or loss (FVTPL) Equity instruments
measured at fair value through other comprehensive income (FVTOCI)
1.1.2.1 Equity investments in associates
In accordance of Ind AS101 (First time adoption of Ind AS), the carrying amount of these investments as per
previous GAAP as on the date of transition is considered to be the deemed cost. Subsequently Investment
in subsidiaries, associates and joint ventures are measured at cost.
1.1.2.2 Other Equity Investment
All other equity investments in scope of Ind AS 109 are measured at fair value through profit or loss.
For all other equity instruments, the Company may make an irrevocable election to present in other
comprehensive income subsequent changes in the fair value. The Company makes such election on an
instrument by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from
OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss
within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the P&L.
1.1.2.3 Derecognition of Financial Assets
• A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognized (i.e., removed from the Company's consolidated balance sheet) 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 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. Continuing involvement that takes the form of a guarantee over the transferred
asset is measured at the lower of the original carrying amount of the asset and the maximum amount of
consideration that the Company could be required to repay.
1.1.2.4 Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets
carried at amortized cost and FVTOCI debt instruments. The impairment methodology applied depends
on whether there has been a significant increase in credit risk.
With regard to trade receivable, the Company applies the simplified approach as permitted by Ind
AS 109, Financial Instruments, which requires expected lifetime losses to be recognized from the initial
recognition of the trade receivables.
The Company assesses at the end of each reporting period 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.
An asset's recoverable amount is the higher of the asset's or cash-generating unit's value in use and its fair
value less costs of disposal, and 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, in which case the
recoverable amount is determined for the cash-generating unit to which the asset belongs.
1.1.3 Financial liabilities
1.1.3.1 Initial recognition and measurement
The Company's financial liabilities include trade and other payables, loans and borrowings including
bank overdrafts.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
1.1.3.2 Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
1.8.3.3 Financial Liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial
liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the
near term. This category also includes derivative financial instruments entered in to by the Company that
are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated
embedded derivatives are also classified as held for trading unless they are designated as effective hedging
instruments.
Gains or losses on liabilities held for trading are recognized in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated
as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities
designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in
OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company may transfer
the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized
in the statement of profit or loss. The Company has not designated any financial liability as at fair value
through profit and loss.
1.1.4 Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated balance sheet if
there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.
1.9 Borrowing Costs
Borrowing costs are expensed as incurred except where they are directly attributable to the acquisition, construction or
production of qualifying assets i.e. the assets that necessarily takes substantial period of time to get ready for intended
use, in which case they are capitalised as part of the cost of those asset up to the date when the qualifying asset is ready
for its intended use.
1.10 Taxation
Tax expenses for the period comprises current and deferred tax. Tax is recognized in statement of Profit and Loss,
except to the extent that it relates to items recognized in the comprehensive income or in equity. In which case, the tax is
also recognized in other comprehensive income or equity.
Current Tax: Current Tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates and laws that are enacted at the Balance Sheet date.
Deferred Tax: Deferred Tax recognized on temporary difference between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability
is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end
of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting
period.
1.11 Employee Benefits
(i) Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount
expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.
(ii) Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided. The
company has following defined contribution plans:
a) Provident fund
b) Superannuation scheme
(iii) Defined benefit plans
The company's net obligation in respect of defined benefit plans is calculated separately for each plan by estimating
the amount of future benefit that employees have earned in the current and prior periods, discounting that amount
and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit
credit method. When the calculation results in a potential asset for the company, the recognized asset is limited to the
present value of economic benefits available in the form of any future refunds from the plan or reductions in future
contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable
minimum funding requirements.
Re measurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in Other
Comprehensive Income. Net interest expense (income) on the net defined liability (assets) is computed by applying
the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the
financial year after taking into account any changes as a result of contribution and benefit payments during the year.
Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.
When the benefits of a plan are 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 recognized immediately in profit or loss. The company recognizes gains
and losses on the settlement of a defined benefit plan when the settlement occurs.
The company has following defined benefit plans:
a) Gratuity
The company provides for its gratuity liability based on actuarial valuation of the gratuity liability as at
the Balance Sheet date, based on Projected Unit Credit Method, carried out by an independent actuary and
contributes to the gratuity fund. The contributions made are recognized as plan assets. The defined benefit
obligation as reduced by fair value of plan assets is recognized in the Balance Sheet. Re-measurements are
recognized in the Other Comprehensive Income, net of tax in the year in which they arise.
b) Leave Encashment
Leave encashment is payable to eligible employees at the time of retirement. The liability for leave encashment
, which is defined benefit scheme is provided on actuarial valuation as at the Balance Sheet date, based on
projected unit credit method, carried out by the independent actuary.
1.12 Foreign Currency Transactions
The company's reported currency and the functional currency for majority of its operations is in Indian Rupees (INR) being
the principal currency of the economic environment in which it operates.
Transactions in foreign currencies are converted into the reported currency of the company using the exchange rate
prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies outstanding at the
end of the reporting period are translated at the exchange rates prevailing as at the end of reporting period. Exchange
differences arising on the settlement of monetary assets and liabilities or on translating monetary assets and liabilities at
rates different from those at which they were translated on initial recognition during the period or in previous financial
statements are recognized in statement of profit and loss in the period in which they arise.
Non-monetary items denominated in foreign currency are valued at the exchange rates prevailing at the transaction date.
1.13 Inventories
i) Inventories are valued "at cost or net realizable value, whichever is lower" Cost comprises all cost of purchase, cost
of conversion and their costs incurred in bringing in inventories to their present location and condition.
ii) Cost formula used are "First in First out" or "Average Cost" as applicable.
1.14 Cash and cash equivalents
Cash and Cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposits with and
original maturity of three months or less, which are subject to an insignificant risk of changes in value.
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