19.Significant accounting policies are as under:
a) Basis of preparation of Financial Statement:
The accounts have been prepared in accordance with Ind AS under historic cost
convention on the assumption of going concern, which enjoins adhere rices of mandatory
accounting standards notified under the Companies (India Accounting Standards) Rules,
20l5,as specified in section 133 of the Companies Act. 2013 reed with relevant Rules
issued there under, guide lines issued by SEBI and specific provisions of Companies
Act, 2013 on disclosure & accounting exigencies
To comply with (nd-AS, estimate and assumptions are made for factors affecting
balances of year end assets and liabilities and disclosure of contingent liabilities. Such
estimates change from time to lime according to situation and appropriate changes are
made with the knowledge of creumstances warranting such changes Male He I
changes are reported in notes to accounts including disclosures of financial impact
thereof.
To cater lo exigencies of schedule HI. assets & liabilities had to be classified under
current and non- current categories, identification of the former on the basis of assets 6.
liabilities realizable or payable within normal operating cycle of the company or vwilhin a
year. Remaining assets and liabilities have categorized as noncurrent.
Use of Estimates
lNO-AS enjoin*, management to make estimales and assumptions related to financial
statements, that affect reported amount of assets, liabilities, revenue, expenses and
contingent liabilities pertaining to the year. Actual result may differ from such estimate
Any revision in accounting estimates is recognized prospectively in theperiod of change
and material revision, including its impact on financial statements, is reported in the
notes to accounts in the year of incorporation of revision.
a. Financial Instruments
(i) Financial Assets
Initial Recognition and Measurement
Ail financial assets are recognized initially at fair value plus, in the case of
financial assets not recorded at fair value through profit or loss, transaction costs
that are attributable to the acquisition of the financial assets.
Financial assets are classified, at initial recognition, as financial assets measured
at fair value or as financial assets measure at amortized cost.
Subsequent Measurement
For purpose of subsequent measurement financial assets are classified in two
broad categories
Ý Financial Assets at fairvalue
* Financial assets at amortized cost
Where assets are measured at fair value, gains and losses are either
recognized entirely in the statement of prohi and loss, or recognized in other
comprehensive income
A financial asset that meets the following two conditions is measured at
amortized cost.
- Busihess Model Test :The objective of the cortipany'3 business model is to
hold the financial asset to collect the contractual cash flows.
* Cash Flow Characteristics Test :Tha contractual lerms of the financial asset
give rise or specified dates to cash flows that are solely payment of principal
and interest on the principal amountoutstanding.
A financial asset that meets Ihe following (wo conditions is measured at fair
value through OCI:-
* Business Model Tast :The financial asset is held within a business model
whose objective is achieved by both collecting contractual cash flows and
selling financial assets.
* Cash Flow Characteristics Test:
The contractual terms of the financial asset give nse on specified dates to
cash flows that are solely payment of principal and interest on the principal
amount outstanding. All other financral assets are measured at fair value
through profit and loss.
Impairment of Financial Assets
The company assesses impairment based on Expected Credit Losses (ECL) model
at an amount equal to>
* 12 Months expected credit lessee, or
* Lifetime expected credit losses depending upon whether there has been a
significant increase in credit risk since initial recognition.
However, for trade receivables, the company does not track, the changes in credit
risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs al each
reporting date, right from its initial recognition.
Financial Liabilities
All financial liabilities are initially recognized at fair value and, in the case of loans
and borrowings and payables, net of directly attributable transaction costs.
Financial liabilities are classified as measured at amortized cost or fair value through
profil and loss (FVTPL) A financial liability is classified as FVTPL if il is classified as
held for trading, or it is a derivative or is designated as such on initial recognition.
Financial Liabilities at FVTPL are measured at fair value and net gain or losses,
including any interest expense, are recognized in statement of profil and loss. Other
financial liabilities are subsequently measured at amortized cost using Ihe effective
interest method. Interest expense and foreign exchange gains and losses are
recognized in state menl of profil and loss. Any gain or loss on de-recognition is also
recognized in statement of profit andloss.
Fair Value Measurement
The company measures financial instruments, such as, derivatives at fair value at
each balance sheet date.
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. The fair value measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either
* In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the
asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions lhat
market participants would use when pricing the asset or liability, assuming 1hat
market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its highest
and best use or by selling it to another market participant lhat would use the asset
in its highest and best use
The company uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximizing the use
of relevant observable inputs and minimizing the use of unobservable inputs.
AH 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) market prices in active markets for identical assets
or liabilities
Level 2 - Valualien techniques for which the lowest level inpul that is significant to
the fair value measurement is direclly or indirectly observable
Level 3 - Valuation techniques for which the lowest level inpul that is significant to
the fair value measurement is unobservable.
For assets and liabilities thal are recognized in the financial statements on a
recurring basis, the Group determines whether transfers have occurred belween
levels in the hierarchy by re-assessing categorisation {based on the lowest level
input thal is significant to the fair value measurement as a whole) at the end of each
reporting period.
The Company's Audit Committee determines the policies and procedures ter both
recurring fair value measurement, such as derivative instruments and unquoted
financial assets measured at fair value, and for non-recurring measurement, such
as assets held for distribution in discontinued operations.
b) Property, Plant & Equipment and Depreciation & Amortization:
Properties. Plant ^Equipments are stated at cost lass depreciation. Cost include
inward Freight, Dulies (Net of Cenvat and value added lax Presently GST). Taxes
and expenses incidental to Acquisition and Installation. All Expenditure incurred
for expansion, modernization and Development ol Plant, Machinery and
equipment are capitalized. Depreciation on Properties, Plant ^Equipments has
been provided for in terms of life span of assets prescribed in Schedule-11 of the
Companies Act, 2013.
Lease hold Land has been amortized in accordance with Ind AS-19 for accounting
of Lease
c) Impairment of Tangible Property, Plant & Equipment
1) Assets are tested for impairment on the basis of cash generating unrt (CGU)
concept. Said assets are held in lower of recoverable value and carrying cost.
Recoverable value is the higher of value in use and nel selling price.
Impairment loss be the excess of carrying cost over recoverable value.
Recoverable value is arrived at on balance sheet dates for-
ajMaking provision against impairment loss if any, or
hi Reversing existing provision against impairment loss:
2) Impairment loss, when arises, is apportioned pro- rale on the various heads of
tangible assets based on their WDV prior to providing for impairment loss
d) Inventories are valued at lower of cost and net realizable value.
Cost comprises inwand freight, duties (Net of cenvat and value added tax Presently
GST) taxes and are calculated in FIFO basis. Where necessary provision has been
made for obsolete, slow moving and defective stocks. Cost of Finished goods includes
cost of conversion and manufacturing overheads. The discarded assets, are held at
Scrap Value. Scraps are held at realizable value.
e) Trade Receivable ahdLoans:
Trade Receivable and Loans are stated after making adequate provision for doubtful
baton ob
t) Research and Development expenses
Research and development C*$t are charged a? expenses in the year in which they are
incurred.
g) Retirement Benefits:
Company Contributes To Provident And Other Funds, Which Are Administered By
Government And Such Contribution Are Charged Against Revenue Retirement
Graluity to Employees is covered by Group Gratuity Scheme with the Life Insurance
Corporation of India byway of payment against the scheme in terms of advice of LIC is
charged off to Revenue till a part of financial year 2022-23 Leave Salary ie accounted
for on ihe accrual basis or Ihe basis of methodical estimates under taken by the
management.
h) Recognition of Income And Expenditure:
i) Sales Are Recognized In the Accounts On Passing of Title To The Goods. I E. Delivery
As Per Terms of Sale. Sale Comprises Sale of Goods and Services, Net of Trade
Discount, Price Variation Bills have been accounted for in the year of receipt of
approval from the customers
ii). All olher Incomes and expenses are accounted for on accrual basis.
I). Lease Rental Lease Renlals in respect of Leased Assets under arrangement of
operational lease have bean charged in accordance with lndAS-19
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