(i) Corporate Information
Raw Edge Industrial Solutions Limited is a listed company with BSE platform domiciled in India and
incorporated on 14th February, 2005 under the provisions of the Companies Act, 1956 (now Companies
Act, 2013). The address of its registered office is B1- 401, B wing, Boomerang, Chandivali Farm Road,
Andheri East, Mumbai, Maharashtra- 400072. The company is engaged in the trading & manufacturing
of minerals and also in providing service of transportation. The company caters to domestic market
only. The Company has diversified its operations by initiating a new line of business of trading and
distribution of Agro-based food products.
(ii) Statement of compliance
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 Standalone Financial Statements have been prepared on a historical cost basis and on an accrual
basis, except for certain financial instruments which are measured at fair values or amortised cost
depending upon classification. Historical cost is generally based on the fair value of the consideration
given in exchange of goods or services.
(iii) Going concern
The company intends to continue its business as a going concern and accordingly financial statements
are prepared on that basis.
1.2 Use of estimates and judgements
The preparation of the Standalone Financial Statements in conformity with Ind AS requires the
management to make estimates, judgments and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and
liabilities at the date of the Standalone Financial Statements and reported amounts of revenues and
expenses during the period. Actual results may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and in any future periods
affected. Actual results could differ from those estimates. Appropriate changes in estimates are made as
the Management becomes aware of changes in circumstances surrounding the estimates. Changes in
estimates are reflected in the financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the Standalone financial statements. In particular,
information about significant areas of estimation, uncertainty and critical judgment in applying
accounting policies that have the most significant effect on the amounts recognized in financial
statements are included in the following notes:
• Useful lives of Property, plant and equipment
• Measurement of defined benefit obligations
• Provision for inventories
• Measurement and likelihood of occurrence of provisions and contingencies
• Deferred taxes
1.3 Current versus non-current classification
The Company presents assets and liabilities in the Standalone balance sheet based on current/ non¬
current classification. An asset is treated as current when it is:
• Expected to be realised or intended to be sold or consumed in normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within twelve months after the reporting period, or
• 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 are classified as non-current.
A liability is current when:
• It is expected to be settled in normal operating cycle.
• It is held primarily for the purpose of trading.
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
All assets and liabilities have been classified as current or noncurrent according to the Company's
operating cycle and other criteria set out in the Act. Based on the nature of products and the time
between the acquisition of assets for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as twelve months for the purpose of the current non¬
current classification of assets and liabilities.
1. 4 Fair value measurement
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) prices in the active market for identical assets or liabilities.
• Level 2 (if level 1 feed is not available/appropriate) - Valuation techniques for which the lowest
level input that is significant to the fair value measurement is directly or indirectly observable.
• Level 3 (if level 1 and 2 feed is not available/appropriate) - Valuation techniques for which the
lowest level input that is significant to the fair value measurement is unobservable.
For financial assets and liabilities maturing within one year from the Balance Sheet date and which are
not carried at fair value, the carrying amount approximates fair value due to the short maturity of these
instruments.
1.5 Revenue recognition
Revenue from contracts with customers is recognised when control of the goods or services are
transferred to the customer at an amount that reflects the consideration to which the Company expects
to be entitled in exchange for those goods or services. Revenue is measured at the fair value of the
consideration received or receivable, taking into account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the government.
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have been
passed to the buyer. Sales are disclosed at exclusive of GST. Trade discounts are shown net from gross
sales.
(ii) Sale of services
Revenue from services is recognised as and when services are rendered.
(iii) Other Income
Other income is recognised when no significant uncertainty as to its determination or realisation exists.
1.6 Taxes
Tax expenses comprise of current and deferred tax:
Current income tax
(a.) 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.
(b.) 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).
Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amount of assets
and liabilities for financial reporting purposes and the corresponding amounts used for taxation
purposes.
A deferred tax liability is recognized based on the expected manner of realization or settlement of the
carrying amount of assets and liabilities, using tax rates enacted, or substantively enacted, by the end of
the reporting period. Deferred tax assets are recognized only to the extent that it is probable that future
taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed
at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit
will be realized.
1.7 Earning Per Share
The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic
EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by
the weighted average number of ordinary shares outstanding during the period. Diluted EPS is
determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
1.8 Property, Plant and Equipment Recognition and measurement
Construction in progress is stated at cost, net of accumulated impairment losses, if any. Property, plant
and equipment are initially recognized at cost after deducting refundable purchase taxes and including
the cost directly attributable to bring the asset to the location and conditions necessary for it to be
capable of operating in the manner intended by the management, borrowing cost in accordance with the
established accounting policy, cost of restoring and dismantling, if any, initially estimated by the
management.
After the initial recognition the property, plant and equipment other than freehold land are carried at
cost less accumulated depreciation and impairment losses. Cost of Self-constructed asset is determined
using the same principles as for acquired assets after eliminating the component of internal profits.
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 attributable to such subsequent cost
associated with the item will flow to the Company. All other repair and maintenance costs are
recognised in Standalone statement of profit or loss as incurred.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will flow
to the Company and its cost can be measured reliably. The costs of repairs and maintenance are
recognised in the Standalone statement of profit and loss as incurred.
Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting
date is disclosed as capital advances under non-current assets.
Capital work-in-progress included in property, plant and equipment are not depreciated as these assets
are not yet available for use. Any gain or loss on disposal of an item of property, plant and equipment is
recognized in Standalone profit or loss.
Depreciation has been provided on straight line method in terms of expected life span of assets specified
in Schedule - II of the Companies Act, 2013 or as determined by management.
The residual value and useful life are reviewed annually, and any deviation is accounted for as a change
in estimate. The estimated useful lives, residual values and depreciation method are reviewed at each
financial year end and the effect of any change is accounted for on prospective basis. The carrying
amount of the all property, plant and equipment are derecognized on its disposal or when no future
economic benefits are expected from its use or disposal and the gain or loss on de-recognition is
recognized in the Standalone statement of profit & loss.
1.9 Intangible Assets
Acquired intangible assets are initially recognized at cost after deducting refundable purchase taxes and
including the transaction cost, if any.
After initial recognition, intangibles are carried at cost less accumulated amortization and impairment
losses. Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire
and bring to use the specific software. The amortization of an intangible asset with a finite useful life
reflects the manner in which the economic benefit is expected to be generated. The estimated useful
lives, residual values and amortization method are reviewed at each financial year end and the effect of
any change is accounted for on prospective basis.
1.10 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as
part of the cost of the asset.
All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost
also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
1.11 Leases
The Company determines that a contract is or contains a lease, if the contract conveys right to control
the use of an identified asset for a period of time in exchange for a consideration. At the inception of a
contract which is or contains a lease, the Company recognises lease liability at the present value of the
future lease payments for the non-cancellable period of a lease which is not short-term in nature except
for lease of low value items. The future lease payments for such non-cancellable period is discounted
using the Company's incremental borrowing rate. However in the current year, the company has not
entered into any lease transaction.
1.12 Inventories
Inventories consist of raw materials, stores & spares, work-in-progress, stock-in-trade and finished
goods. Inventories are valued at lower of cost and net realizable value (NRV) except for raw materials
which is valued at cost.
The cost of raw materials and stores & spares includes the cost of purchases and other costs incurred in
bringing the inventories to their present location and condition.
Cost of work-in-progress and finished goods includes direct materials, labour and proportion of
manufacturing overheads based on the normal operating capacity, wherever applicable.
The cost of stock-in-trade includes cost of purchase and other costs incurred in bringing the inventories
to their present location and condition.
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. However, materials and other items held
for use in the production of inventories are not written down below cost if the finished products in
which they will be used are expected to be sold at or above cost.
1.13 Foreign currency
Functional and presentation currency: Items included in the financial statements are measured using
the currency of the primary economic environment in which the company operates ('the functional
currency'). The financial statements are presented in Indian Rupees (INR), which is the company's
functional and presentation currency.
Foreign currency transactions: 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 recognized in Statement of
Profit and Loss and reported within foreign exchange gains/ (losses).
|