2 Significant accounting policies
2.1 Basis of preparation
2.1.1 The standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified
under the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Companies Act, 2013 ('the
Act'. )
All amounts disclosed in the financial statements and notes have been rounded off to the nearest thousand rupee, as per the
requirement of schedule III, unless otherwise specified.
On 30 April 2021 a BSE listed company Trijal Industries Limited was acquired by the current Acquirers & Promoters (5 Persons)
and subsequently the name of the said company Trijal Industries Limited was changed to ABATE AS INDUSTRIES LIMITED.The
initial share capital of the company was Rs.501.61 Lacs.Since the accumulated losses up to 31 Mar 2024 was Rs.591.82 Lacs the
equity balance as at 31 Mar 2024 was reduced to minus Rs.90.21 Lacs.With the Aim to enahance its financial flexibility and
create opportunities for future growth and investment the company management decided to increase its Authorised Share
Capital from Rs.15 Crores to 95 Crores and in this regard got their Shareholders'Approval in their meeting held on 11 Sep 2023.
This increase will allow the Company to bring in additional capital to the extent of its requirement as and when needed
,enabling them to pursue strategic initiatives ,funding new projects and start their commercial operations in due course shortly
and resultantly the Company will start to make taxable profit and will be in a position to recover all their losses made till 31 Mar
2024.In view of the above ,the Statement of the Company has been prepared on a going concern basis.
2.1.2 These financial statements have been prepared on historical cost basis, except for certain assets and liabilities that are
measured at fair values at the end of each reporting period, as explained in the accounting policies below:
Fair value measurement
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, (regardless of whether that price is directly observable or estimated using
another valuation technique). In estimating the fair value of an asset or a liability, the Company takes into account the
characteristics of the asset or liability, if market participants would take those characteristics into account when pricing the
asset or liability, at the measurement date.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2or 3 based on the degree to
which inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in
its entirety, which are described as follows:
i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date;
ii) Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either
directly or indirectly; and
iii) Level 3 inputs are unobservable inputs for the asset or liability.
Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for
leasing transactions that are within the scope of Ind AS 116, and measurements that have some similarities to fair value but are
not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
2.2 Current / non-current
The Company presents assets and liabilities in the balance sheet based on current / non-current classification. An asset is
treated as current when it is,
i) Expected to be realised or intended to be sold or consumed in normal operating cycle
ii) Held primarily for the purpose of trading
iii) Expected to be realised within twelve months after the reporting period, or
iv) 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:
i) It is expected to be settled in normal operating cycle
ii) It is held primarily for the purpose of trading
iii) It is due to be settled within twelve months after the reporting period, or
iv) 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.
2.3 Revenue
2.3.1 Revenue from operations is recognised to the extent that it is probable that economic benefit will flow to the Company and the
revenue can be reliably measured regardless of when the payment is being made as per IND AS 115. 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.
2.3.2 Rendering of other services: Revenue is recognised upon rendering of services, provided persuasive evidence of an arrangement
exist, tariff/rates are fixed or are determinable and collectability is reasonably certain.
2.3.3 Interest income : Interest income is accrued on time basis, by reference to the principal outstanding and at the effective
interest rate applicable.
2.4.1 Property, plant and equipment: Property, Plant and Equipment are stated at cost less accumulated depreciation or
amortisation and accumulated impairment losses. Cost comprises of all cost of purchase, construction and other related costs
incurred in bringing the assets to their present location and condition.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them
separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the
carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and
maintenance costs are recognized in profit or loss as incurred. The present value of the expected cost for the decommissioning
of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
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 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 derecognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial
year end and adjusted prospectively, if appropriate.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date are classified
as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under
'Capital work-in-progress'.
2.4.2 Impairment losses: At the end of each reporting period, the Company reviews the carrying amounts of the assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication of impairment loss
exists, the recoverable amount, (i.e. higher of fair value less costs of disposal and value in use) of the asset is estimated, or,
when it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the cash¬
generating unit to which the asset belongs is estimated. 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 and an impairment loss is recognised immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years.
A reversal of an impairment loss is recognised immediately in profit or loss.
2.4.3 Depreciation/amortisation: Depreciation/amortisation is recognised on a straight-line basis over the estimated useful lives of
respective assets as under:
Asset category Useful life©
Office Equipment 8 years
Furniture & Fittings 5 years
Computers & Accessories 3 years
Computer Software 6 years
Useful life of assets different from prescribed in Schedule II has been estimated by management supported by technical
assessment.
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period and the
effect of any changes in estimate is accounted for prospectively.
2.5 Financial instruments
Classification:
The Company classifies its financial assets in the following measurement categories: - Those to be measured subsequently at
fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and those measured at
amortised cost. The classification depends on the Company's business model for managing the financial assets and the
contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in the Statement
of Profit and Loss or other comprehensive income. For investments in debt instruments, this will depend on the business
model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has
made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income. The Company reclassifies debt investments when and only when its business model for managing
those assets changes.
Initial recognition and measurement
At initial recognition, the Company measures a financial asset at its fair value, in the case of a financial asset not at fair value
through the Statement of Profit and Loss, transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at fair value through the Statement of Profit and Loss are expensed in the
Statement of Profit and Loss. Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payment of principal and interest.
Subsequent measurement of non-derivative financial instruments
i) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the
asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.
ii) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business
model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. The Company has made an irrevocable election for its investments which are classified as equity
instruments to present the subsequent changes in fair value in other comprehensive income based on its business model.
Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which
are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
iii) Financial assets at fair value through profit and loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit and loss.
iv) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables
maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of
these instruments.
Derecognition of financial instruments
The company derecognizes a financial asset when the contractual right to receive the cash flows from the financial asset expire
or it transfers the financial asset.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expired.
Impairment of financial assets
The company assesses on a forward-looking basis the expected credit losses associated with its assets carried at amortised cost
. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
2.6 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. Current and deferred tax are recognised
in profit or loss.
2.6.1 Currenttax: The tax currently payable is based on the estimated taxable profit for the year and is calculated using applicable tax
rates and tax laws that have been enacted or substantively enacted.
2.6.2 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 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.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that
future taxable profits will allow the deferred tax asset to be recovered. Deferred tax liabilities and assets are measured at the
tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax
laws) that have been enacted or substantively enacted. Deferred tax assets and deferred tax liabilities are offset if a legally
enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI
or directly in equity.
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