4. Material Accounting Policies
(i) Revenue Recognition
Revenue from the sale of goods and services are measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts, rebates and incentives etc. Sales figure are recognized excluding Goods and Service Tax.
All Other income and expenditure items having a material bearing on the standalone financial statements where certainty of ultimate collection/payment exist, are recognized on accrual basis.
(ii) Property, Plant & Equipment
Property, plant and equipment are stated at historical cost/deemed cost (elected in accordance with Ind AS 101, First time adoption of Indian Accounting Standards), as applicable, less accumulated depreciation and cumulative impairment losses, if any. Cost comprises of the purchase price (net of GST / duty credits wherever applicable) and all direct costs attributable to bringing the asset to its working condition for intended use and includes the borrowing costs for qualifying assets and the initial estimate of restoration cost if the recognition criteria is met.
Wherever assets are revalued, Gross carrying amount is adjusted by the amount added on revaluation based on Govt. approved valuers' report and disclosed separately as required under the Companies Act,2013. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred. Software and licences which are integral part of the PPE are capitalised along with respective PPE.
An item of property, plant & equipment is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. The 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 and Loss on the date of disposal or retirement.
Capital work-in-progress includes cost of property, plant and equipment under installation / under development as at the balance sheet date. Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of Property, Plant and Equipment not available for use before such date are disclosed under ‘Capital work-in-progress'.
(iii) Amortization and Depreciation
(a) During the year, the company has provided depreciation on Straight Line Method, as determined on the basis of useful lives specified in Schedule II of the Companies, Act, 2013.
(b) Depreciation on Plant & Machinery of AI/SMT Division and Automatic Assembly Division has been provided on Double Shift Basis.
(c) Property, plant and equipment (PPE) which are added/ disposed- of during the year, depreciation is provided on pro-rata basis from (up- to) the date on which the PPE is available for use (disposed-off).
(d) Leasehold Land is re-classified with Right to Use and amortized over the period of lease as per the Ind AS-116.
(iv) Employee Benefits
Expenses and liabilities in respect of employee benefits are
recorded in accordance with Ind-AS 19 — Employee Benefits.
(a) Defined contribution plan
Provident Fund & ESI Fund: Contribution to the provident fund & ESI Fund with the government at predetermined rates is a defined contribution scheme and is charged to the statement of Profit and Loss. There are no other obligations other than contribution to PF & ESI Schemes.
(b) Defined benefit plan
Gratuity : The Company provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan') covering eligible employees. The Gratuity Plan provides a lumpsum payment to vested employees at retirement, death, or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company. Provision for gratuity is made as per the provision of payment of gratuity act, as calculated by the independent actuary.
(c) Other Short-term employee benefits:
All employee benefits payable wholly within twelve months rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc. and the expected cost of bonus, ex-gratia are recognised during the period in which the employee renders related service. Liabilities in respect of encashment of accumulated leaves by the employees is estimated by the management and charged to Profit & Loss account.
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