2. SIGNIFICANT ACCOUNTING POLICIES:
This note provides a list of the significant accounting policies adopted in the
preparation of the standalone financial statements. These policies have been
consistently applied to all the years presented, unless otherwise stated.
a) Basis of Preparation
i) Compliance with Ind AS
These standalone financial statements comply in all material aspect with the
Indian Accounting Standards (Ind AS) notified under Section 133 of the
Companies Act, 2013(the 'Act') [Companies (Indian Accounting Standards) Rules,
2015] (as amended from time to time) and other relevant provisions of the Act.
ii) Basis of Measurement
These standalone financial statements have been prepared on a historical cost
convention on accrual basis in accordance with the generally accepted accounting
principles and in accordance with Accounting Standards applicable in India and
the provisions of the Companies Act, 2013 as adopted consistently by the
Company
iii) Current and Non-Current Classification
The company presents assets and liabilities in the Balance Sheet based on
current/non-current classification
An asset is classified as current when it is:
a) expected to be realized or intended to be sold or consumed in the normal
operating cycle,
b) the asset is intended for sale or consumption,
c) expected to be realized within twelve months after the reporting period, or
d) cash or cash equivalents 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 classified as current when
a) it is expected to be settled in the normal operating cycle,
b) it is due to be settled within twelve months after the reporting period, or
c) there is no unconditional right to defer settlement of the liability for at least
twelve months after the reporting period.
All other liabilities are classified as non-current.
The operating cycle is the time between the acquisition of assets for processing
and their realization in cash and cash equivalents.
b) Revenue from Sale of Products
Revenue from the sale of goods is recognized at the point of time when a control of
the goods is transferred to the customer. The normal credit term differs from
customer to customer. The revenue is measured on the basis of the consideration
defined in the contract/invoice with a customer, including variable consideration,
such as discounts etc.
Revenue from services rendered/job work is recognized as the services/job work is
rendered and is booked based on the invoices raised.
Profit/loss on dealing in shares at the time of delivery of shares or square up of the
deal.
c) Property, Plant and Equipment and Intangible Assets
All Property, Plant and Equipment including capital work in progress are stated at
cost except Land and Building which was stated at its revalued asset less
accumulated depreciation. Cost of acquisition includes the cost of replacing part of
the plant and equipment and borrowing costs and other incidental expenses.
Depreciation Method. Estimated useful life and Residual values
Depreciation is calculated on a pro-rata basis using the straight-line-method to
allocate their cost, net of their estimated residual values, over their estimated useful
life in accordance with Schedule II to the Act. The company depreciates the property,
plant and equipment as under:
An item of Property, plant and equipment and any significant part initially recognized
is derecognized upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on the derecognized 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 derecognized.
Plant and equipment not ready to use are disclosed under 'Capital Work in progress.
d) Impairment of Non-financial Assets
The company assess, at each reporting date, whether there is an indication that an
asset may be impaired. If any indication exists, or when annual impairment testing
for an asset is required, the Company estimates the asset's recoverable amount.
Impairment losses of continuing operations, including impairment of inventories, are
recognized in the statement of Profit and Loss.
e) Inventories
Inventories are stated at the lower of cost and net realizable value.
Cost of inventories comprises cost of purchases and all other costs incurred in
bringing the inventories to their present location and condition and are accounted for
as follows:
Raw Material and Stores and Spares: cost includes cost of purchases and other costs
incurred in bringing the inventories to their present location and condition. Cost is
determined on FIFO method.
Work in Progress: cost includes cost of direct material, direct labour and an
appropriate proportion of variable expenses on estimation basis.
Finished goods: cost includes cost of direct material, direct labour and an appropriate
proportion of variable expenses and fixed overhead expenditure or net realizable
value, whichever is lower.
f) Income Recognition
Interest Income
Interest income on loans and advances and security deposit with electricity
department are being accounting for on accrual basis at the rate of interest as
agreed or as allowed by the department.
Interest from Income Tax Department has been accounted for on mercantile basis
based on intimation u/s 143(1) of Income tax Act.
Profit on sale of shares
Profit on sale of shares have been recognized on the sale of shares on the completion
of transfer/delivery of shares and received the payment.
g) Cash and Cash Equivalents
For the purpose of presentation in the Cash Flow Statement, cash and cash
equivalent includes cash in hand, balances with banks in current accounts and Fixed
Deposits with the bank.
h) Financial Liabilities
Initial Recognition and Measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at
historical cost through loans and borrowings or payables, as appropriate.
All financial liabilities are recognized initially at historical cost and, in case of loans,
borrowings and payable, net of directly attributable transaction costs.
The Company's financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts.
Subsequent Measurement
The measurement of financial liabilities depends on their classification, as described
below:
Trade Payable
Trade payables represent liabilities for goods and services provided to the company
prior to the end of financial year which are unpaid. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months after the
reporting period.
Loans and Borrowings
Borrowings are initially recognized at historical cost. Fees paid on the establishment
of loan facilities are recognized as transaction costs of the loan and is recognized in
profit and loss. Borrowings are classified as current and non- current liabilities based
on the repayment schedule agreed with the bank.
i) Employees benefits
(i) Short-term employee benefit
Liabilities for short-term employee benefits that are expected to be settled within 12
months after the end of the period in which the employees render the related
services are recognized 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 'Other Current Liabilities' in the
Balance Sheet.
IMJ Kosi-cmpioymeni rians
(a) Gratuity
Retirement gratuity for employees who have completed the minimum period of
service of 5 years under the Gratuity Act has been recognized. The gratuity due
every year has been calculated and any addition in the gratuity as compared to the
last year has been recognized as an expense in the Statement of Profit and Loss. The
total gratuity payable at the close of the year end is presented as 'Provision for
employee's benefits' under "Non-Current Provisions" in the Balance Sheet.
(b) Provident Fund
Contributions in respect of Employees are made to the Fund administrative by the
Regional Provident Fund Commissioner as per the provisions of Employees' Provident
Fund and Miscellaneous Provisions Act, 1952 and are charged to Statement of Profit
and Loss as and when services are rendered by employees. The company has no
obligation other than the contribution payable to the Regional Provident Fund.
j) Income Tax
The Income Tax expense for the year is the tax payable on the current year's taxable
income based on the applicable income tax rate.
k) Deferred Tax
Deferred Tax has been recognized based on time difference in Depreciation, which is
being reviewed every year.
l) Earnings per Share
Basic earnings per share are calculated by dividing the net profit or loss attributable
to equity holders of the Company by the weighted average number of equity shares
outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for
the period attributable to equity holders of the Company and the weighted average
number of shares outstanding during the year is adjusted for the effects of all
dilutive potential equity shares.
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