2 Material accounting policies:
2.1 Basis of preparation
The Standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the
Companies Act, 2013, (Ind AS compliant Schedule III).The financial statements have been prepared on a historical cost basis.The financial statements are
presented in Indian Rupees (INR) and all values are recorded to the lakhs except otherwise indicated.The Company has prepared the financial statement
on the basis that it will continue to operate as a going concern. During the year the company was sold under liquidation under going concern and all
known and unknown liabilities including secured creditors, unsecured creditors are settled as per section 53 of IBC and the standalone financials are based
on the same.
2.2 Summary of material accounting policies
a Current versus non-current classification
Based on the time involved between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has identified
twelve months as its operating cycle for determining current and non-current classification of assets and liabilities in the balance sheet.
b Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date
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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place
* In the principal market for the asset or liability, or
* In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible to / by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
thatmarket participants act in their best economic interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
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.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have
occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting year.
External valuers are involved for valuation of significant assets and significant liabilities.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and
risks of the asset or liability and the level of the fair value hierarchy as explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.
* Disclosures for valuation methods, significant estimates and assumptions (Note 34)
* Financial instruments (including those carried at amortised cost) (Note 45a)
* Quantitative disclosure of Fair Value hierarchy (Note 45 b)
c Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of the goods is transferred to the customer at an amount that reflects the
consideration to which the Company expects to be entitled in exchange for those goods. The Company has generally concluded that it is the principal in its
revenue arrangements because it typically controls the goods before transferring them to the customer.
Sale of goods
Revenue from Sale of goods is recognised at the point in time when control of the goods is transferred i.e. when the goods have been delivered to the
specific location (delivery). Following delivery, the customer has full discretion over the responsibility, manner of distribution, price to sell the goods and
bears the risks of obsolescenceand loss in relation to the goods. A receivable is recognised bythe Companywhen thegoods are delivered to the customer
as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is
due. The average payment terms range between 60-90 days.
Sales of services-AMC
Rendering of services : In contracts involving rendering of services, revenue is recognised in profit or loss in the proportion of the stage of completion of
the transaction at the reporting date and are measured net of taxes.
Contract balances
Trade receivables
A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the
consideration is due). Refer to accounting policies of financial assets in section (m) Financial instruments - initial recognition and subsequent
Contract liabilities
A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Company transfers the
related goods or services. Contract liabilities are recognised as revenue when the Company performs under the contract (i.e., transfers control of the
related goods or services to the customer).
d Other revenue streams
Interest income
Interest income from debt instruments is recognised using the EIR method or proportionate basis. The effective interest rate is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. While calculating
the effective interest rate, the Company estimated the expected cash flows by considering all the contractual terms of the financial instrument (for
example prepayment, extension, call and similar options) but doses not consider the expected credit losses.Interest income is included in finance income
in the statement of profit and loss.
e Taxes
Tax expense comprises current tax expense and deferred tax.deferred tax.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in accordance with the Income Tax Act,
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in
equity). Current tax items are recognised in correlation to the underlying transaction either in Other comprehensive income (OCI) or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to
interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company shall reflect the effect of
uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better
resolution of the treatmentand considers whether it is probable that a taxation uncertain tax treatment by using either most likely method or expected
value method, depending on which method predicts better resolution of the treatment.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
* When the deferred tax liability arises on an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable
and deductible temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred
tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax losses can be utilised, except:
* When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give
rise to equal taxable and deductible temporary differences.
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 tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the
underlying transaction either in OCI or directly in equity.
The Company offsets deferred tax assets and deferredtax liabilities if and only if it has a legally enforceable right to set off current tax assets and current
tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future year in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Goods and Service taxes paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of Goods and service taxes paid, except:
* When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as
part of the cost of acquisition of the asset or as part of the expense item, as applicable
* When receivables and payables are stated with the amount of tax included
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
f Property, plant and equipment
Property, plant and equipment are measured at cost / deemed cost, less accumulated depreciation and impairment losses, if any. Cost of Property, plant
and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any
directly attributable cost of bringing the asset to its working condition for its intended use and estimated attributable costs of dismantling and removing
the asset and restoring the site on which it is located.
Subsequent costs are included in the asset's carrying amount or recognised 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 derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and
Loss during the reporting period in which they are incurred.
Gains or losses arising from derecognition of plant, property and equipment are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable
amount. Any gain or loss on disposal of an item of property, plant and equipment is recognised in Statement of Profit and Loss.
Depreciation on additions / disposals is provided on a pro-rata basis i.e. from / up to the date on which asset is ready for use / disposed of.
The carrying values of property, plant and equipment units at each Balance Sheet date are reviewed for impairment if any indication of impairment exists.
g Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment losses.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation year and the amortisation method for an intangible asset with a finite useful life are reviewed at least
at the end of each reporting year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the
asset are considered to modify the amortisation year or method, as appropriate, and are treated as changes in accounting estimates. The amortisation
expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of
another asset.
An intangible asset is de-recognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising upon de-recognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement of profit and loss when the asset is de-recognised.
h Borrowing costs:
Borrowing costs consist of interest and transactions costs incurred in connection with the borrowing of funds. Borrowing costs may include exchange
differences to the extent regarded as an adjustment to the borrowing costs.
Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset that necessarily takes a substantial period of time
to get ready for its intended use) are capitalized as a part of the cost of such assets. All other borrowing costs are charged to the Statement of Profit and
i Inventories
Inventories are valued at cost or net realizable value, whichever is lower. Costs incurred in bringing each product to its present location and condition are
accounted for as follows:
* Materials and components: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.
Cost is determined on FIFO basis.
* Finished goods (Including goods in transit) & Work in progress: Cost includes material cost, cost of conversion, depreciation, other overheads
to the extent applicable. Cost is determined on FIFO basis.
* Stock in trade: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is
determined on FIFO basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary
to make the sale.
j Impairment of non-financial assets
The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment if any indication of impairment exists.
An impairment loss is recognised 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. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash
generating units). The impairment loss is recognised as an expense in the Statement of Profit and Loss.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or
have decreased. If such indication exists, the Company estimates the asset's or CGU's recoverable amount. A previously recognised impairment loss is
reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was
recognised. The reversal is limited so that the carrying of the asset assumptions used to determine the asset's recoverable amount since the last
impairment loss was recognised.The reversal is limited so that the carrying of the asset does not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in the statement of profit and loss.
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