SIGNIFICANT ACCOUNTING POLICIES:
(a) STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with Ind AS notified under the Companies (Indian
Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013 as amended.
The Financial statements are presented in India Rupees, which is also the company's functional currency. All the amount
have been rounded- off to the nearest lakhs, unless otherwise stated.
(b) BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared on the historical cost basis except for certain financial instruments that
are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical
cost is generally based on the fair value of the consideration given in exchange for goods and services.
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, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or liability, the Company takes into
account the characteristics of the asset or liability if market participants would take those characteristic into account
when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in
these financial statements is determined on such a basis.
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.
Going Concern:
The company has incurred cash losses in current year and preceding financial year. During the year the company has
executed debt restructuring scheme and restructured its overall borrowings. This will result into substantial reduction in
the interest outflow for future period and has extended the repayment plan in relation to restructured borrowings. Further,
the Company expects to generate operational cash-inflows in near future, which will support the Company to meets its
near future cash obligations. Taking these factors into consideration, the Company believes financial information is fairly
presented on going concern basis.
(c) USE OF ESTIMATES:
The presentation of the financial statements are in conformity with the Ind AS which requires the management to make
estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, revenues and
expenses and disclosure of contingent liabilities.
Such estimates and assumptions are based on management's evaluation of relevant facts and circumstances as on
the date of financial statements. The actual outcome may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are
recognized in the period in which the estimates are revised and in any future periods affected.
(d) REVENUE RECOGNITION:
Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of the goods have
passed to the buyer and no significant uncertainty exists regarding the amount of the consideration that will be derived
from the sale of goods. Revenue from the sale of goods is measured at the fair value of the consideration received or
receivable, net of Goods and Service Tax, returns and allowances, related discounts & incentives and volume rebates.
Interest income from a financial asset is recognized when it is probable that the economic benefit will flow to the
Company and the amount of income can be measured reliably.
(e) PROPERTY, PLANTS & EQUIPMENTS:
Property, Plants & equipment acquired by the Company is reported at acquisition value, with deductions for accumulated
depreciation and impairment losses, if any. The acquisition value includes the purchase price (excluding refundable
taxes), and expenses directly attributable to assets to bring it to the factory and in the working condition for its intended
use. Where the construction or development of any such asset requiring a substantial period of time to set up for its
intended use, is funded by borrowings if any, the corresponding borrowing cost are capitalized up to the date when the
asset is ready for its intended use.
All items of property, plant and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount
of the asset and is recognized in the statement of profit and loss.
Leasehold Land and Leasehold Improvements are amortized over the period of the lease.
(f) DEPRICIATION:
Depreciation is provided on the straight line method (SLM). Depreciation is provided based on useful life of the assets
as prescribed in schedule II to the Companies Act, 2013 except for Plant and Machinery, where the company has
adopted useful life of 25 years. For these class of assets based on internal assessment and independent technical
evaluation carried out by external values, the management believes that useful lives as given above best represent the
period over which the management expects to use the assets. Depreciation on items of property, plant and equipment
acquired / disposed off during the year is provided on pro-rata basis with reference to the date of addition / disposal.
(g) CASH FLOW:
The Cash flow statement is prepared by the “Indirect Method“Set out in Indian Accounting Standard 7 on “Cash Flow
Statements” and present the cash flow by operating, Investing and financing activities of the company. Cash and Cash
equivalents presented in the cash flow statement consist of cash on hand and other current account balance / deposits
with the bank.
(h) INVENTORIES:
Inventories are valued at lower of cost (on FIFO basis) or net realizable value after providing for obsolescence and other
losses, where considered necessary. Cost of Finished goods & Work in progress includes appropriate portion of labour
& overheads.
(i) EMPLOYEE BENEFITS:
Short Term
Short term employee benefits are recognized as an expense as the undiscounted amount expected to be paid over the
period of services rendered by the employee to the company.
Long Term
The Company has both defined contribution and defined benefit Plans, of which some have assets in approved funds.
These plans are financed by the Company in the case of defined contribution plans.
Defined Contribution Plans
These are plan in which the Company pays pre-defined amounts to separate funds and does not have any legal or
informal obligation to pay additional sums. These comprise of contributions to Employees Provident Fund. The
Company's payments to the defined contribution plans are reported as expenses during the period in which the
employee performs the services that the payment covers.
Defined Benefit Plans
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit
Credit method, with actuarial valuations being carried out at each balance sheet date. Remeasurement, comprising
actuarial gains and losses, the effect of the changes to the return on plan assets (excluding net interest), is reflected
immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in
which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained
earnings and is not reclassified to in the statement of profit and loss. Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset.
The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of
profit and loss:
1) Service costs comprising current service costs, gains and losses on curtailments and settlements; and
2) Net interest expense or income
The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit
obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions
in future contributions to the schemes.
(j) FOREIGN CURRENCY TRANSACTION:
In preparing the financial statements of the Company, the transactions in currencies other than the entity's functional
currency (INR) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each
reporting period, monetary items denominated in foreign currencies are retranslated at the rate prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing
at the date when fair value was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.
Exchange differences arising on monetary items are recognized in the statement of profit and loss in the period in which
they arise
(k) BORROWING COST:
Borrowing cost incurred in relation to acquisition, construction or production of qualifying assets are capitalized as part
of cost of such assets till the activities necessary for its intended use are complete. All other borrowing costs are
charged in statement of profit & loss of the year in which incurred
(l) EARNING PER SHARE:
Basic earnings per share is computed by dividing the profit/(loss) for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by
dividing the profit/(loss) for the year attributable to equity shareholders by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted average number of equity shares which could have
been issued on the conversion of all dilutive potential equity shares.
|