SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE IND AS FINANCIAL STATEMENT
1. STATEMENT OF COMPLIANCE
The financial statements have been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 ("the
Act") read with the Companies (Indian Accounting Standards) Rules, 2015 and other
relevant provisions of the Act. The Company has consistently applied accounting
policies to all periods. On March 24, 2021, the Ministry of Corporate Affairs (MCA)
through a notification, amended Schedule III of the Companies Act, 2013 and the
amendments are applicable for financial periods commencing from April 1, 2021.
The Company has evaluated the effect of the amendments on its financial
statements and complied with the same.
2. SYSTEM OF ACCOUNTING:
(i) Basic assumptions:
The accounts have been prepared under historical cost convention on accrual
basis and as per applicable Mandatory Accounting Standards.
All assets and liabilities have been classified as current or non-current
according to the Company's operating cycle and other criteria set out in the
Schedule III of Companies Act 2013. Based on the nature of products and
the time between the acquisition of assets for processing and their
realisation in cash and cash equivalents, the Company has ascertained its
operating cycle as twelve months for the purpose of current non-current
classification of assets and liabilities.
(ii) Going concern:
As per the Strategic Cabinet decision closure of the company is in process.
Ministry of Heavy Industries & Public Enterprises, Department of Heavy
Industry, New Delhi (Govt. of India), through letter No. F. No. 3(1)/2020-
PEVI,dated 28/01/2021 communicating their decision regarding closure of
the Company along with shutting down all the operations as per DPE
Guideline vide OM dated 14/06/2018, the Board of Directors in compliance
of the same in their meeting held on 11/02/2021 has decided to proceed
with closure of the Company. Accordingly, the Company has ceased to be a
going concern entity and financial statements of the company for the current
financial year has been prepared on the Non-Going Concern basis. The
company in compliance of the above letter auctioned all the Inventory Items
and Assets during the previous and current year by following specified
guideline and also in the process to complete the remaining closure
proceeding at the earliest Further, Building (including, Roads Services &
Tubewell) has been handed over to UPSIDA.
(iii) Use of Estimates:
The preparation of financial statements in conformity with Ind AS requires
management to make judgments, estimates and assumptions, that affect the
application of accounting policies and the reported amounts of assets,
liabilities and disclosures of contingent assets and liabilities at the date of
these financial statements and the reported amounts of revenues and
expenses for the years presented. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed at each
balance sheet date. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and future periods affected.
(iv) PROPERTY, PLANT AND EQUIPMENT
As already stated above that through letter of Ministry of Heavy Industries & Public
Enterprises, Department of Heavy Industry, New Delhi (Govt. of India)
closure of the Company is in process. The company in compliance of the
closure letter had auctioned all the Inventory Items & Assets during the
previous and current year by following specified guidelines. Further, Building
(including, Roads Services & Tubewell) has been handed over to UPSIDA.
In addition to the above, company is also in the process to complete the
remaining closure proceeding at the earliest. The tools manufactured
departmentally/ purchased valuing individually below Rs.1,00,000 and
having estimated useful life less than one period being of consumable
nature are accounted for as revenue expenditure under relevant natural
heads. Construction period expenses exclusively attributable to projects are
capitalized.
(v) BORROWING COST:
Borrowing cost directly attributable in relation to acquisition, construction of
assets that takes substantial period of time to get ready for its intended use
are capitalised as part of the cost of such assets upto the date when such
assets are ready for intended use. Other borrowing costs are charged as
expenses in Profit & Loss Account in the year in which they are incurred.
(vi) INVESTMENTS:
a) Current Investments are valued at cost or market value whichever is
lower.
b) Non-Current Investments are valued at cost. However, in case of
permanent diminution in the value of investments, suitable provision is
made in the books of accounts.
c) Income from dividend is recognized in books of accounts when the right
to receive such dividend is established.
d) Investments in subsidiaries, joint controlled entities and associates in
separate financial statements.
In accordance with Ind-AS transitional provisions, the company opted t
consider previous GAAP carrying value of investments as deemed cost oi
transition date for investments in subsidiaries, joint ventures an
associates in separate financial statement.
(vii) PROVISIONS:
a) PROVISION FOR DOUBTFUL DEBTS: As a measure of conservatism
generally provision is being made for Debtors where there is no
transaction for three years or where the company has initiated legal
case against defaulting debtors.
(viii) INPUT CREDIT:
Input credit on eligible Revenue / Capital purchase is taken on receipt of
such materials.
(ix) REVENUE RECOGNITION
Revenue Recognition criteria as per Ind AS 115 “Revenue from Contract
with Customers”. Since, the sales recorded should have been recorded as
per above mentioned Ind AS. Thus, entity should incorporate the below
mentioned para as a part of notes forming the parts of accounts. The
Company recognises revenue when the amount of revenue and its related
cost can be reliably measured and it is probable that future economic
benefits will flow to the entity and degree of managerial involvement
associated with ownership or effective control have been met for each of the
Company's activities as described below. The Company bases its estimates
on historical results, taking into consideration the type of customer, the type
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The Company recognises revenues from the sales of Other Items (Sale of
Scrap Items/ Fixed Assets/ Inventory/ Other Items) on Cash Basis
subsequent Receipt of requisite details from MSTC.
SALES:
Sales are set up as per the Sale of Goods Act. They represent value of
goods sold from the Corporate Office.
(x) Employees Benefit:
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