(a) Rounding Off
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs, as per the
requirement of Schedule III, unless otherwise stated.
(b) Goodwill
Goodwill arising on acquisition of a business is carried at costs as established at the date of acquisition of the business
less accumulated impairment losses, if any.
If the initial accounting for a business combination is incomplete by end of the reporting period in which the combination
occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new
information obtained above facts and circumstances that existed at the acquisition date that, if known, would have
affected the amounts recognised at that date.
Goodwill is tested for impairment annually. For the purpose of impairment testing, goodwill is allocated to those
cash-generating units that are expected to benefit from the business combination in which the goodwill arose. If the
recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated to
reduce the carrying amount of the goodwill. Any impairment loss recognised for goodwill is not reversed in subsequent
periods.
(c) Foreign currency transactions
Items included in the financial statements of the Company are measured using the currency of the primary economic
environment in which the entity operate (i.e. the "functional currency"). The financial statements are presented in
Indian Rupee (INR), the national currency for India, which is the functional and presentation currency of the Company.
Transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of
exchange prevailing at the date of the transactions. At the end of each reporting period, monetary items denominated
in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that
are denominated in foreign currencies are retranslated at the rates prevailing at that date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in the statement of profit and loss.
(d) Employee benefits
i) Long Term Employee Benefits
Defined Contribution Plans
Superannuation fund, Provident fund and Pension fund are defined contribution plans towards which the Company
makes contribution at predetermined rates to the Superannuation Trust, and the Regional Provident Fund Commissioner
respectively. The same is debited to the Statement of Profit and Loss based on the amount of contribution required to
be made as and when services are rendered by the employees.
The Company also makes contributions to state plans namely Employee's State Insurance Fund and Employee's Pension
Scheme 1995. The Company has no further payment obligation once the contributions have been paid.
Defined Benefit Plan
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present value of
the defined 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 amount is funded to a Gratuity fund
administered by the trustees of 'M/s. Wendt (India) Limited Employees Group Gratuity Trust' and managed by Life
Insurance Corporation of India.
Remeasurement, comprising actuarial gain and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period 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. Defined benefit costs are
categorised as follows :
• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and
settlements);
• net interest expense or income;
• remeasurement
Other Long Term Employee Benefits - Compensated Absences
The Company also has liabilities for earned leave that are not expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service. These obligations 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 appropriate
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 or loss.
The obligations are presented as current liabilities in the balance sheet if the entity 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.
Termination benefits are recognised as an expense as and when incurred.
ii) Short-term employee benefits
Short term employee benefits including performance incentives which are expected to be settled within 12 months
after the end of the period in which the employee renders related service, are determined as per Company's policy and
recognised as expense based on expected obligation on undiscounted basis.
e) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. Income tax expense is recognised
in the statement of profit and loss except to the extent it relates to items directly recognised in equity or in other
comprehensive income.
i) Current tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or
paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute
the current tax amount are those that are enacted by the reporting date and applicable for the period. The Company
offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised
amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.
ii) Deferred tax
Deferred tax is recognised using the Balance Sheet approach. Deferred tax assets and liabilities are recognised for
deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying
amount in financial statements. However, the deferred tax liabilities are not recognised if they arise from the initial
recognition of goodwill or from initial recognition of an asset or liability in a transaction that is not a business combination
and affects neither accounting nor taxable profits or losses at the time of the transaction.
Deferred tax asset 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.
Deferred tax liabilities are recognised for all taxable temporary differences.
The carrying amount of deferred tax assets are 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 income tax asset to be
utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset
is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the reporting date.
iii) Indirect taxes
Goods and Services Tax (GST) credit on materials purchased / services availed for production / input services are taken
into account at the time of purchase and availing services. GST Credit on purchase of capital goods wherever applicable
are taken into account as and when the assets are acquired. The GST credits so availed are utilised for payment of GST
on outward supply and service. The unutilised GST credit is carried forward in the books.
f) Property, plant and equipment
The cost of Property, Plant and equipment comprises its purchase price net of any trade discounts and rebates, any
import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly
attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on
borrowings attributable to acquisition of qualifying tangible assets up to the date the asset is ready for its intended
use. Machinery spares which can be used exclusively in connection with an item of Property, plant and equipment and
whose use is expected to be irregular are capitalised and depreciated over the useful life of the principal item of the
relevant assets. Subsequent costs are included in the asset's carrying amount are 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 profit or loss during the reporting
period in which they are incurred.
Capital work-in-progress:
Items of assets which are not yet ready for their intended use are carried at cost, comprising direct cost, related
incidental expenses and attributable interest, if any.
Depreciation
Depreciation on property, plant and equipment has been provided on the straight-line method as above based on
technical advice (more specifically for second-hand Property, plant and equipment), taking into account the nature of the
asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated
technological changes, manufacturers warranties and maintenance support, etc.
Depreciation on assets added / disposed off during the year is provided on pro-rata basis from the month of addition
or up to the month prior to the month of disposal, as applicable.
Individual assets costing less than Rs. 5,000 each are depreciated in full in the year of acquisition.
An item of property, plant and equipment is derecognised 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 recognised in the Statement of profit or loss.
(g) Intangible assets
Intangible assets (acquired)
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation
and accumulated impairment losses, if any. The estimated useful life and amortisation method are reviewed at the end
of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
(h) Impairment of Property, plant and equipment and intangible assets other than goodwill
At the end of each reporting period, the Company reviews the carrying amounts of its Property, plant and equipment
and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of the
impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and
consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units,
or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Recoverable amount is higher of fair value less cost of disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset(or cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in the Statement of profit or loss.
Such assets, that suffered an impairment, are reviewed for possible reversal of the impairment at the end of each
reporting period.
(i) Inventories
Inventories are valued at lower of cost and net realizable value. Cost of raw materials, stores and spares and traded
goods comprises cost of purchases. Cost of work-in-progress and finished goods comprises direct materials, direct
labour, and an appropriate proportion of overheads. Cost of inventories also include all other costs incurred in bringing
the inventories to the present location and condition. Cost is computed on weighted average basis.
Net realisable value represents the estimated selling price for inventories less the estimated costs of completion and
estimated costs necessary to make the sale.
Provisions are made for potential obsolescence based on management assessment of aged inventory items.
(j) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term,
highly liquid investments with maturity of 3 months or less that are readily convertible into known amounts of cash
and which are subject to an insignificant risk of changes in values, and bank overdrafts.
Statement of Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects
of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and
item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing
and financing activities of the Company are segregated.
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