a Basis of accounting and preparation of Financial Statements:
Compliance with Indian Accounting Standards (Ind AS):
a) The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed by Ministry
of Corporate Affairs under Companies (Indian Accounting Standards) Rules, 2015, provisions of the Companies Act, 2013, to the extent notified
and pronouncements of the Institute of Chartered Accountants of India.
Disclosures under Ind AS are made only in respect of material items and in respect of the items that will be useful to the users of financial
statements in making economic decisions.
Pursuant to the commencement of Liquidation as per the provisions of Section 33 of the IBC 2016, The Management of the affairs of the
company is vested with the Liquidator and the powers of BOD stand suspended and be exercised by the Liquidator. The Certificate of Sale/ Sale
deed to transfer the company as a going concern is yet to happen. Certificate of Sale will be completed only on receipt of full consideration
from the successful bidder.
Thus, The financial statements have been prepared on going concern basis.
Functional and Presentation Currency:
These financial statements are presented in Indian rupees, which is the functional currency of the Company. All financial information presented
in Indian rupees has been rounded to the nearest Lakhs, except otherwise indicated.
Basis of measurement:
These Financial statements are prepared under the historical cost convention unless otherwise indicated.
Use of Estimates and Judgments:
The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates and assumptions considered
in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year.
Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ
due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are
known/ materialise. Estimates and underlying assumptions are reviewed on an ongoing basis.
Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect
to the carrying amounts of assets and liabilities within the next financial year, are included in the accounting policies.
- Measurement of defined benefit obligations (Refer note 29.1)
- Measurement and likelihood of occurrence of provisions and contingencies (Refer note 37)
- Estimation of tax expenses and liability (Refer note 39)
- Useful lives of property, plant, equipment and intangibles (Refer note 3)
- Impairment of financial assets such as trade receivables (Refer note 8)
- Revenue recognition
b Revenue Recognition:
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty
and net of returns, trade allowances, rebates, value added taxes, Goods and Service Tax.
i) Sale of goods: Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed
to the buyer, usually on delivery of the goods. Revenue is measured net of returns, trade discounts and volume rebates. The timing of the
transfer of risks and rewards varies depending on the individual terms of the sales contract.
ii) 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 sales tax, works contract tax, service tax and Goods and Service
Tax.
iii) Contract revenue
Contract revenue is recognised only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably. When
the outcome of the contract is ascertained reliably contract revenue is recognised at cost of work performed on the contract plus proportionate
margin, using the percentage of completion method. Percentage of completion is the proportion of work performed to date to the total
estimated contract costs. The estimates of cost and progress of contracts are measured at each reporting date by the Management. The effect
of such changes to estimates is recognized in the period in which such changes are determined. The estimated cost of each contract is
determined based on the estimate of the cost to be incurred till the final completion of the contract and includes cost of materials, services,
and other related overheads. Any projected losses on contracts under execution are recognised in full when identified.
iv) 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.
c Property, Plant and Equipment, Depreciation and Impairment:
i) 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 Company has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its Property, plant and
equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and used that as
its deemed cost as at the date of transition (April 01,2016).
The carrying values of Property, Plant and Equipment units at each Balance Sheet date are reviewed for impairment if any indication of
impairment exists.
ii) Depreciation:
Depreciation on Property, Plant and Equipment has been provided on written down value basis and manner prescribed in Schedule II to the Act.
Leasehold Land on a straight line basis over the period of lease.i.e.99 years.
Impact of Fixed Assets Valuation report
iii) Intangible Assets:
Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets
are amortised on a Straight Line Basis over their estimated useful lives.
The Company has elected to continue with the carrying value of all its intangible assets as recognised in the standalone financial statements as
at the date of transition to Ind AS, measured as per the previous GAAP and use that as the deemed cost as at the transition date pursuant to
the exemption under Ind AS 101.
iv) Capital work in progress:
Expenditure during the construction/ pre-operative period is included under Capital Work-in-Progress and same is allocated to the respective
Property, Plant and Equipment on the completion of project.
d Impairment of Assets:
i) Financial assets:
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (“ECL”) model for measurement and
recognition of impairment loss on the financial assets measured at amortised cost and debt instruments measured at FVOCI. Loss allowances on
trade receivables are measured following the ‘simplified approach’ at an amount equal to the lifetime ECL at each reporting date. In respect of
other financial assets, the loss allowance is measured at 12 month ECL only if there is no significant deterioration in the credit risk since initial
recognition of the asset or asset is determined to have a low credit risk at the reporting date. The amount of ECLs (or reversal) that is required
to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in
Statement of Profit and Loss.
ii) 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.
e Investment in subsidiaries and associates:
Investments that are readily realisable and intended to be held for not more than a year from the date on which such investments are made,
are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of
cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution
in value is made to recognise a decline, other than temporary, in the value of the long term investments.
The Company has elected to continue with the carrying value of all its equity investments in its subsidiaries and associates as recognized in the
financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as the deemed cost as at the
transition date pursuant to the exemption under Ind AS 101.
f Inventories:
i) Raw Materials and components are valued at lower of cost arrived on First In First Out method (FIFO) and Net Realisable Value. Cost of raw
materials comprises cost of purchases.
ii) Finished Goods are valued at lower of cost and net realisable value. Cost includes direct material, direct labour, excise duty and attributable
overheads.
Impact of Inventory Valuation Report
iii) Traded goods are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined on a FIFO basis.
Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the
ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
g Employee Benefits:
i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service are recognised in respect of employees services up to the end of the reporting period
and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit
obligations in the Balance Sheet.
ii) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using
the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as
a result of experience adjustments and changes in actuarial assumptions are recognised in the Statement of Profit and Loss.
The obligations are presented as current liabilities in the Balance Sheet if the Company does not have an unconditional right to defer
settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
iii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund and Employee State Insurance Fund (ESIC).
Defined Benefit Plans - Gratuity obligations
The liability or asset recognised in the Balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit
obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries
using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market
yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan
assets. This cost is included in employee Benefit expense in the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the year in which
they occur, directly in other comprehensive income they are included in retained earnings in the Statement of changes in equity and in the
Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in
the Statement of Profit and Loss as past service cost.
- Defined contribution plan
The Company pays provident fund and ESIC contributions to publicly administered provident funds / ESIC as per local regulations. The Company
has no further payment obligations once The contributions have been paid. The contributions are accounted for as Defined contribution Plans
and The contributions are recognised as employee Benefit expense when they are due. Prepaid contributions are recognised as an asset to the
extent that a cash refund or a reduction in the future payments is available.
h Leases (where the Company is a lessee):
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease. At the inception or on
reassessment of an arrangement that contains a lease, the Company separates payments and other consideration required by the arrangement
into those for the lease and those for the other elements on the basis of their relative fair values.
Leases of property, plant and equipment where the Company, as lessee, in which a significant portion of the risks and rewards of ownership are
not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to the Statement of Profit and Loss as per the terms of the lease or on a straight-line basis over the
period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s
expected inflationary cost increases.
i Borrowings:
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over
the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction
costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the
draw down occurs.
Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The
difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is recognised in the Statement of Profit and Loss.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
j 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 Loss.
k Foreign Currency Transactions / Translations:
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates are generally recognised in Statement of Profit and Loss as either profit or loss. A
monetary item for which settlement is neither planned nor likely to occur in the foreseeable future is considered as a part of the entity’s net
investment in that foreign operation.
Foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within other income and expenses
accordingly.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair
value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss in
the Statement of Profit and Loss. For example, translation differences on nonmonetary assets and liabilities such as equity instruments held at
fair value through profit or loss are included in net profit in the Statement of Profit and Loss as part of the fair value gain or loss and translation
differences on non-monetary assets such as equity investments classified as Fair Value through Other Comprehensive Income (“FVOG”) are
recognised in other comprehensive income (“OCI”).
l Taxes on Income:
Income tax expense comprises current tax and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates
items recognised directly in equity or in OCI.
The income tax expense or credit for the period is tax payable on the current year's taxable income based on the applicable income tax rate
adjusted by change in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date. Current tax
comprises of expected tax payable or receivable on taxable income/loss for the year or any adjustment or receivable in respect of previous
year. Management periodically evaluates position taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amount expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the Balance Sheet method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of the reporting date and are expected to apply to the Company when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits (Minimum alternate tax
credit entitlement) only if it is probable that future taxable amounts will be available to utilise those temporary differences, unused losses and
unused tax credits. Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised / reduced to the
extent that it is probable or no longer probable respectively that the related tax benefit will be realized.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
m Earnings Per Share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company;
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued
during the year.
(ii) Diluted earnings per share
Diluted earnings per share is calculated by dividing:
- the net profit or loss after tax for the year attributable to owners of the Company , and
- the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares
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