A Oneindia Venture
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Jash Engineering Ltd. కంపెనీ అకౌంటింగ్ విధానాలు
Mar 31, 2025
3. Summary of material accounting policies
and information
The standalone financial statements have
been prepared using the material accounting
policies and measurement bases
summarised below. These policies have been
consistently applied to all the years
presented, unless otherwise stated.
3.1 Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment are stated at
cost, less accumulated depreciation and
amortisation, The cost comprises purchase
price and directly attributable cost of
bringing the asset to its working condition for
the intended use. Any trade discount and
rebates are deducted in arriving at the
purchase price.
Subsequent costs are included in the asset''s
carrying amount or 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. All other repair and maintenance
costs are recognised in statement of profit
and loss as incurred.
Subsequent measurement [depreciation
and useful lives)
Depreciation on property, plant & equipment is
provided on a straight-line basis, computed on
the basis of useful lives [as set out below)
prescribed in Schedule II to the Act.
3.3 Investment property
Property which is held for long-term rental
yields or for capital appreciation or both, and
that is not occupied by the Company, is
classified a s investment property.
Investment property is measured initially at
its cost, including related transaction costs.
Subsequent expenditure is capitalised to the
asset''s carrying amount only when it is
probable that future economic benefits
associated with the expenditure will flow to
the Company and the cost of the item can be
measured reliably. Repairs and maintenance
costs are expensed when incurred. Depreciation
on investment property is provided on a pro
rata basis on straight line method over the
estimated useful lives. Useful life of assets,
as assessed by the Management, corresponds
to those prescribed by Schedule II- Part ''C'' of
the Companies Act, 2013. Investment properties
are derecognised either when they have
been disposed of or when they are permanently
withdrawn from use and no future economic
benefit is expected from their disposal. The
difference between the net disposal
proceeds and the carrying amount of the
asset is recognised in Statement of Profit
and Loss in the period of derecognition.
3.4 Intangible assets
Recognition and initial measurement
Intangible assets are stated at their cost of
acquisition. The cost comprises purchase
price, borrowing cost if capitalization criteria
are met and directly attributable cost of
bringing the asset to its working condition
for the intended use.
Subsequent measurement
Intangible assets consisting of technical
know-how and computer software. These
are amortised on a straight-line basis over
the estimated useful lives from the date
when the assets are available for use. The
estimated useful life [amortisation period) of
the intangible assets is arrived basis the
expected pattern of consumption of
economic benefits and is reviewed at the end
of each financial year and the amortisation
period is revised to reflect the changed
pattern, if any.
3.2 Capital work-in-progress
Capital work-in-progress are carried at cost,
comprising direct cost and related incidental
expenses acquire property, plant and
equipment. Assets which are not ready to be
intended use are also shown under capital
work-in-progress.
Freehold land is not depreciated.
De-recognition
An item of property, plant and equipment
and any significant component initially
recognised is derecognised 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
significant component [calculated as the
difference between the net disposal
proceeds and the carrying amount of the
asset significant component) is recognised in
statement of profit and loss, when the asset
is derecognised.
3.5 Intangible assets under development
Intangible assets under development
represents expenditure incurred in respect of
intangible assets under development and
are carried at cost. Cost includes development
cost, borrowing costs and other direct
expenditure necessary to create, produce and
prepare the asset to be capable of operating
in the manner intended by management.
These are recognised as assets when the
Group can demonstrate following recognition
requirements:
⢠The development costs can be measured
reliably
⢠The project is technically and commercially
feasible
⢠The Group intends to and has sufficient
resources to complete the project
⢠The Group has the ability to use or sell such
intangible asset
⢠The software will generate probable future
economic benefits.
Amortisation of the asset begins when
development is complete and the asset is
available for use.
3.6 Revenue recognition
The Company generates revenue from sale
of varied engineering products for general
engineering industry, water and waste,
water industry, bulk solids handling industry and
also from rendering installation services
along with the sale of goods, if specified in
the contract with customers.
To determine whether to recognise revenue,
the Company follows a 5-step process in
accordance with Ind AS 115 - Revenue from
contracts with customers:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the
performance obligations
5. Recognising revenue when/as performance
obligations] are satisfied.
Revenue is measured at fair value of
consideration received or receivable, after
deduction of any trade discounts, volume rebates
and any taxes or duties collected on behalf of
the government which are levied on sales
such as goods and services tax [GST]. In case
of multi-element revenue arrangements,
which involve delivery or performance of
multiple products, services, evaluation will be
done of all deliverables in an arrangement to
determine whether they represent separate
units of accounting at the inception of
arrangement. Total arrangement consideration
related to the bundled contract is allocated
among the different elements based on their
relative fair values [i.e., ratio of the fair value
of each element to the aggregated fair value
of the bundled deliverables]. In case the
relative fair value of different components
cannot be determined on a reasonable basis,
the total consideration is allocated to the
different components based on residual value
method.
The Company determines when it has
satisfied its performance obligation to
transfer a product by evaluating when a
customer obtains control of that product. For
some contracts, control is transferred either
when the product is delivered to the
customer''s site or when the product is
shipped, depending on the terms of the
contract [including delivery and shipping
terms]. However, for some contracts, a
customer may obtain control of a product
even though that product remains in the
Company''s physical possession. In that case,
the customer has the ability to direct the use
of, and obtain substantially all of the
remaining benefits from, the product even
though it has decided not to exercise its right
to take physical possession of that product.
Consequently, the entity does not control
the product. Instead, the entity provides
custodial services to the customer over the
customer''s asset.
Revenue is recognised at a point in time,
when [or as] the Company satisfies performance
obligations by transferring the promised
goods or services to its customers.
The Company recognises contract liabilities
for consideration received in respect of
unsatisfied performance obligations and
reports these amounts as other liabilities in
the statement of financial position. Similarly,
if the Company satisfies a performance
obligation before it receives the consideration,
the Company recognises either a contract
asset or a receivable in its statement of
financial position, depending on whether
something other than the passage of time is
required before the consideration is due.
Sale of goods
Revenue from sale of goods is recognised
when the control of goods is transferred to
the buyer as per the terms of the contract, in
an amount that reflects the consideration
the Company expects to be entitled to in
exchange for those goods. Control of goods
refers to the ability to direct the use of and
obtain substantially all of the remaining
benefits from goods.
Sale of services
Revenue from sale of services in respect of
installation services is recognised when the
performance obligation is completed.
Export benefits
Income from export incentives are recognised
on accrual basis.
Interest income
Interest income is recognised on time
proportion basis considering the amount
outstanding and rate applicable. For all financial
assets measured at amortised cost, interest
income is recorded using the effective interest
rate [EIR] i.e. the rate that exactly discounts
estimated future cash receipts through the
expected life of the financial asset to the net
carrying amount of the financial assets.
Dividend income
Dividend income is recognised at the time
when right to receive the payment is
established.
3.7 Leases
The Company assesses at contract inception
whether a contract is, or contains, a lease in
accordance with Ind AS 116 - Leases. That is, if
the contract conveys the right to control the
use of an identified asset for a period of time
in exchange for consideration.
Company as a lessee
The Company applies a single recognition
and measurement approach for all leases,
except for short-term leases and leases of
low-value assets. The Company recognises
lease liabilities to make lease payments and
right-of-use assets representing the right to
use the underlying assets.
a) Right-of-use assets (ROU assets'')
The Company recognises right-of-use assets
at the commencement date of the lease [i.e.,
the date the underlying asset is available for
use]. Right-of-use assets are measured at
cost, less any accumulated depreciation and
impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs
incurred, and lease payments made at or
before the commencement date less any
lease incentives received. Right-of-use
assets are depreciated on a straight-line
basis over the shorter of the lease term and
the estimated useful lives of the assets.
b) Lease liabilities
At the commencement date of the lease, the
Company recognises lease liabilities
measured at the present value of lease
payments to be made over the lease term.
The lease payments include fixed payments
[including in-substance fixed payments] less
any lease incentives receivable, variable
lease payments that depend on an index or a
rate, and amounts expected to be paid under
residual value guarantees. The lease
payments also include the exercise price of a
purchase option reasonably certain to be
exercised by the Company and payments of
penalties for terminating the lease, if the
lease term reflects the Company exercising
the option to terminate.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease
payments made. In addition, the carrying
amount of lease liabilities is remeasured if
there is a modification, a change in the lease
term, a change in the lease payments or a
change in the assessment of an option to
purchase the underlying asset.
c) Short-term leases and leases of low-
value assets
The Company applies the short-term lease
recognition exemption to its short-term
leases (i.e., those leases that have a lease
term of 12 months or less from the
commencement date and do not contain a
purchase option). It also applies the lease of
low-value assets recognition exemption that
are considered to be low value. Lease
payments on short term leases and leases of
low-value assets are recognised as expense
on a straight-line basis over the lease term.
Company as a lessor
Leases for which the Company is a lessor is
classified as a finance or operating lease.
Whenever the terms of the lease transfer
substantially all the risks and rewards of
ownership to the lessee, the contract is
classified as a finance lease. All other leases
are classified as operating leases.
For operating leases, rental income is
recognized on a straight-line basis over the
term of the relevant lease.
3.8 Inventories
Inventories are valued at the lower of cost
and net realisable value.
Costs incurred in bringing each product to its
present location and condition are accounted
for as follows:
Raw materials: cost includes cost of purchase
and other costs incurred in bringing the
inventories to their present location and
condition. Cost is determined on weighted
moving average basis.
Finished goods and work in progress: cost
includes cost of direct materials and labour
and a proportion of manufacturing overheads
based on the normal operating capacity.
Net realisable value is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and the
estimated costs necessary to make the sale.
3.9 Government grants
Government grants are recognised where
there is reasonable assurance that the grant
will be received, and all attached conditions
will be complied with. When the grant relates
to an expense item, it is recognised as income
on a systematic basis over the periods that
the related costs, for which it is intended to
compensate, are expensed. When the grant
relates to an asset, it is recognised as income
in equal amounts over the expected useful
life of the related asset.
When the Company receives grants of non¬
monetary assets, the asset and the grant
are recorded at fair value amounts and
released to profit or loss over the expected
useful life in a pattern of consumption of the
benefit of the underlying asset i.e. by equal
annual instalments.
When loans or similar assistance are provided
by governments or related institutions, with
an interest rate below the current applicable
market rate, the effect of this favourable
interest is regarded as a government grant.
The loan or assistance is initially recognised
and measured at fair value and the
government grant is measured as the
difference between the initial carrying value
of the loan and the proceeds received. The
loan is subsequently measured as per the
accounting policy applicable to financial
liabilities.
3.10 Impairment of non-financial assets
For impairment assessment purposes, assets
are grouped at the lowest levels for which
there are largely independent cash inflows
(cash generating units). As a result, some
assets are tested individually for impairment
and some are tested at cash-generating unit
level.
At each reporting date, the Company
assesses whether there is any indication
based on internal/external factors, that an
asset may be impaired. If any such indication
exists, the Company estimates the
recoverable amount of the asset. If such
recoverable amount of the asset or the
recoverable amount of the cash generating
unit to which the asset belongs is less than
its carrying amount, the carrying amount is
reduced to its recoverable amount and the
reduction is treated as an impairment loss
and is recognised in the statement of profit
and loss. If, at the reporting date there is an
indication that a previously assessed
impairment loss no longer exists, the
recoverable amount is reassessed which is
the higher of fair value less costs of disposal
and value-in-use and the asset is reflected at
the recoverable amount subject to a
maximum of depreciated historical cost.
Impairment losses previously recognised are
accordingly reversed in the statement of
profit and loss.
To determine value-in-use, management
estimates expected future cash flows from
each cash-generating unit and determines a
suitable discount rate in order to calculate
the present value of those cash flows. The
data used for impairment testing procedures
are directly linked to the Company''s latest
approved budget, adjusted as necessary to
exclude the effects of future re-organisations
and asset enhancements. Discount factors
are determined individually for each cash¬
generating unit and reflect current market
assessment of the time value of money and
asset-specific risk factors.
3.11 Foreign currency
Initial recognition of Transactions
Foreign currency transactions are recorded in
the functional currency, by applying to the
exchange rate applicable as at the date of
the transaction.
Subsequent recognition of balances
Foreign currency non-monetary items (item
balances) which are carried in terms of
historical cost denominated in a foreign
currency are reported using the exchange
rate at the date of the transaction. Monetary
items denominated in foreign currency are
restated at the exchange rate prevailing on
the balance sheet date.
Exchange differences
Exchange differences arising on the
settlement/restatement of monetary items
at the exchange rates different from those at
which they were initially recorded during the
year or reported in the previous standalone
financial statements, are recognised as
income or expense in the year in which they
arise.
3.12 Financial instruments
Recognition and initial measurement
Financial assets and financial liabilities are
recognised when the Company becomes a
party to the contractual provisions of the
financial instrument and are measured
initially at fair value adjusted for transaction
costs. Subsequent measurement of financial
assets and financial liabilities is described
below.
Non-derivative financial assets
Subsequent measurement
Financial assets carried at amortised cost -
A ''financial asset'' is measured at the
amortised cost if both the following
conditions are met:
⢠The asset is held within a business
model whose objective is to hold assets
for collecting contractual cash flows,
and;
⢠Contractual terms of the asset give rise
on specified dates to cash flows that are
solely payments of principal and interest
(SPPI) on the principal amount
outstanding.
After initial measurement, such financial
assets are subsequently measured at
amortised cost using the effective interest
rate (EIR) method.
De-recognition of financial assets
A financial asset is de-recognised when the
contractual rights to receive cash flows from
the asset have expired or the Company has
transferred its rights to receive cash flows
from the asset.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non¬
derivative financial liabilities are measured
at amortised cost using the effective interest
method.
De-recognition of financial liabilities
A financial liability is de-recognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing
financial liability is replaced by another from
the same lender on substantially different
terms, or the terms of an existing liability are
substantially modified, such an exchange or
modification is treated as the de-recognition
of the original liability and the recognition of
a new liability. The difference in the
respective carrying amounts is recognised in
the statement of profit and loss.
Derivative financial instruments
Derivatives are initially recognised at fair
value on the date a derivative contract is
entered into and are subsequently re¬
measured to their fair value at the end of
each reporting period.
Offsetting of financial instruments
Financial assets and financial liabilities are
offset and the net amount is reported in the
balance sheet if there is a currently
enforceable legal right to offset the
recognised amounts and there is an
intention to settle on a net basis, to realise
the assets and settle the liabilities
simultaneously. The legally enforceable right
must not be contingent on future events and
must be enforceable in the normal course of
business and in the event of default,
insolvency or bankruptcy of the Company or
the counterparty.
3.13 Equity investment in subsidiaries
Investments representing equity interest in
subsidiaries are measured for at cost less
impairment in accordance with Ind AS 27
Separate Financial Statements. Where an
indication of impairment exists, the carrying
amount of the investment is assessed and
written down immediately to its recoverable
amount. On disposal of these investments,
the difference between net disposal
proceeds and the carrying amounts are
recognised in the statement of profit and
loss.
3.14 Equity investment in Joint Venture
Investments representing equity interest in
joint ventures are initially measured at cost
in accordance with Ind AS 111 "Joint
Arrangements" and after initial recognition,
the investment in the joint venture is
accounted for using equity method as
prescribed under IND AS 28 "Investments in
Associates and Joint Ventures". The carrying
amount is adjusted for the investor''s share
of the post-acquisition profits or losses of
the joint venture. Any dividends received
from the joint venture reduce the carrying
amount of the investment. Where an
indication of impairment exists, the carrying
amount of the investment is assessed and
written down immediately to its recoverable
amount. On disposal of these investments,
the difference between net disposal
proceeds and the carrying amounts are
recognised in the statement of profit and
loss.
3.15 Impairment of financial assets
In accordance with Ind AS 109, the Company
applies expected credit loss (''ECL'') model for
measurement and recognition of impairment
loss for financial assets. ECL is provided for
when there has been a significant increase in
credit risk and then, factors historical trends
and forward looking information. An
impairment loss is recognised either based
on the 12 months'' probability of default or
lifetime probability of default.
Trade receivables
In respect of trade receivables, the Company
applies the simplified approach of Ind AS 109,
which requires measurement of toss
allowance at an amount equal to lifetime
expected credit losses. Lifetime expected
credit losses are the expected credit losses
that result from all possible default events
over the expected life of such receivables.
Other financial assets
In respect of its other financial assets, the
Company assesses if the credit risk on those
financial assets has increased significantly
since initial recognition. If the credit risk has
not increased significantly since initial
recognition, the Company measures the loss
allowance at an amount equal to 12-month
expected credit losses, else at an amount
equal to the lifetime expected credit losses.
3.16 Income taxes
Tax expense recognised in profit or loss comprises
the sum of deferred tax and current tax not
recognised in other comprehensive income
or directly in equity.
Current income tax is measured at the
amount expected to be paid to the tax
authorities in accordance with the Income
tax Act, 1961. Current tax items are recognised
in correlation to the underlying transaction
either in other comprehensive income or
directly in equity.
Deferred tax liabilities are generally recognised
in full for all taxable temporary differences.
Deferred tax assets are recognised to the
extent that it is probable that the underlying
tax loss, unused tax credits (Minimum
alternate tax credit entitlement) or deductible
temporary difference will be utilised against
future taxable income. This is assessed
based on the Company''s forecast of future
operating results, adjusted for significant
non-taxable income and expenses and
specific limits on the use of any unused tax
loss or credit. 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 deferred tax asset to be
recovered.
Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is
realised or the liability is settled, based on
tax rates (and tax laws) that have been
enacted or substantively enacted at the
reporting date. Deferred tax items are
recognised in correlation to the underlying
transaction either in other comprehensive
income or directly in equity.
Minimum Alternative Tax (''MAT'') credit
entitlement under the provIsIons of the
Indian Income-tax Act, 1961 is recognised as a
deferred tax asset when it is probable that
future economic benefit associated with it in
the form of adjustment of future income tax
liability, will flow to the Company and the
asset can be measured reliably. MAT credit
entitlement is set off to the extent allowed in
the year in which the Company becomes
liable to pay income taxes at the enacted tax
rates. MAT credit entitlement is reviewed at
each reporting date and is recognised to the
extent that is probable that future taxable
profits will be available against which they
can be used. MAT credit entitlement has been
presented as deferred tax asset in Balance
Sheet. Significant management judgment is
required to determine the probability of
recognition of MAT credit entitlement.
Current tax assets and current tax liabilities
are offset when there is a legally enforceable
right to set off the recognised amounts and
there is an intention to settle the asset and
liability on a net basis. Deferred tax assets
and deferred tax liabilities are offset when
there is a legally enforceable right to set off
current tax assets against current tax
liabilities; and the deferred tax assets and
the deferred tax liabilities relate to income
taxes levied by the same taxation authority.
3.17 Dividend
The Company recognises a liability to pay
dividend to equity holders of the parent
when the distribution is authorized and the
distribution is no longer at the discretion of
the Company. As per the corporate laws in
India, a distribution is authorised when it is
a p p roved b y th e s h a re h ol d e rs. A
corresponding amount is recognised directly
in equity.
3.18 Employee benefits
Short-term employee benefits
All employee benefits payable wholly within
twelve months of receiving employee
services are classified as short-term
employee benefits. These benefits include
salaries and wages, bonus and ex-gratia. The
undiscounted amount of short-term
employee benefits to be paid in exchange for
employee services is recognised as an
expense as the related service is rendered by
employees.
Defined contribution plan
Provident fund benefit is a defined
contribution plan under which the Company
pays fixed contributions to Regional
Provident Fund Commissioner in accordance
with Employees Provident Fund and
Miscellaneous Provision Act, 1952. The
Company has no legal or constructive
obligations to pay further contributions after
payment of the fixed contribution. The
contributions recognised in respect of
defined contribution plans are expensed as
they accrue. Liabilities and assets may be
recognised if underpayment or prepayment
has occurred and are included in non
current/current liabilities or non-current/
current assets, respectively.
Defined benefit plan
The Company provides for gratuity, a defined
benefit retirement plan, which defines an
amount of benefit that an employee will
receive on separation from the Company,
usually dependent on one or more factors such
as age, years of service and remuneration. The
plan provides for a lump sum payment to
vested employees at retirement, death while
in employment or on termination of
employment of an amount based on the
respective employee''s salary and the tenure
of employment. Vesting occurs upon
completion of five years of service. The
liability recognised in the balance sheet for
defined benefit plans is the present value of
the defined benefit obligation [''DBO''] at the
balance sheet date, together with
adjustments for unrecognised actuarial
gains or losses and past service costs. The
discount rates used for determining the
present value of obligation under defined
benefit plans, is based on the market yields
on Government securities as at the Balance
Sheet date, having maturity periods
approximating to the terms of related
obligations. The present value of DBO is
calculated annually by an independent
actuary using the projected unit credit
method. Actuarial gains/losses resulting
from re-measurements of the liability due to
change in actuarial assumptions are included
in other comprehensive income.
Other long term employee benefits
The liability in respect of compensated
absences becoming due or expected to be
availed within one year from the balance
sheet date is recognised on the basis of
undiscounted value of estimated amount
required to be paid or estimated value of
benefit expected to be availed by the
employees. Lia bil ity in respect of
compensated absences becoming due or
expected to be availed more than one year
after time balance sheet date is estimated
on the basis of an actuarial valuation
performed by an independent actuary using
the projected unit credit method, actuarial
gains and losses arising from past
experience and changes in actuarial
assumptions are credited or charged to the
Statement of Profit and loss in the year in
which such gains or losses are determined.
Mar 31, 2024
Summary to the material accounting policies and other explanatory information for the year ended 31 March 20241. Company overview
Jash Engineering Limited (''the Company'') is a public limited company domiciled in India and is incorporated on 29 September 1973. Its shares are listed on National Stock Exchange of India limited. The registered office of the Company is situated at 31, Sector-C, Sanwer Road, Industrial Area, Indore - 452015, Madhya Pradesh.
The Company is engaged in the business of manufacturing and trading of varied engineering products for general engineering industry, water and wastewater industry and bulk solids handling industry.
2. General information and statement of compliance with Ind AS
These standalone financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by the Ministry of Corporate Affairs (âMCAâ) under section 133 of the Companies Act, 2013 (âActâ) read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, other relevant provisions of the Act and guidelines issued by the Securities and Exchange Board of India (SEBI). The Company has uniformly applied the accounting policies for the periods presented.
These standalone financial statements are separate financial statements of the Company. The Company has also prepared consolidated financial statements for the year ended 31 March 2024 in accordance with Ind AS 110 and the same were also approved for issue by the Board of Directors on 09 May 2024.
The standalone financial statements have been prepared on accrual and going concern basis. All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.
The standalone financial statements have been prepared under historical cost convention basis except-
⢠Certain financial assets which are measured at fair value;
⢠Defined benefit plans - plan assets measured at fair value
⢠Share based payments which are measured at fair value of the options
Functional and presentation currency
The standalone financial statements have been prepared and presented in Indian Rupees (INR), which is the Companyâs functional and presentation currency.
3. Summary of material accounting policies and information
The standalone financial statements have been prepared using the material accounting policies and measurement bases summarised below. These policies have been consistently applied to all the years presented, unless otherwise stated.
3.1 Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment are stated at cost, less accumulated depreciation and amortisation. The cost comprises purchase price and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent costs are included in the assetâs carrying amount or 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. All other repair and maintenance costs are recognised in statement of profit and loss as incurred.
Subsequent measurement (depreciation and useful lives)
Depreciation on property, plant and equipment is provided on a straight-line basis, computed on the basis of useful lives (as set out below) prescribed in Schedule II to the Act.
|
Asset class |
Useful life (years) |
|
Plant & Machinery |
15 |
|
Buildings (RCC structures) |
60 |
|
Factory building |
30 |
|
Computers |
3 |
|
Electrical installations |
10 |
|
Furniture and fixtures |
10 |
|
Office equipment |
5 |
|
Vehicles |
8-10 |
Freehold land is not depreciated.
De-recognition
An item of property, plant and equipment and any significant component initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset/significant component (calculated as the difference between the net disposal proceeds and the carrying amount of the asset/significant component) is recognised in statement of profit and loss, when the asset is derecognised.
Capital work-in-progress are carried at cost, comprising direct cost and related incidental expenses acquire property, plant and equipment. Assets which are not ready to be intended use are also shown under capital work-in-progress.
Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.
Subsequent measurement
Intangible assets consisting of technical know-how and computer software. These are amortised on a straight-line basis over the estimated useful lives from the date when the assets are available for use. The estimated useful life (amortisation period) of the intangible assets is arrived basis the expected pattern of consumption of economic benefits and is reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any.
|
Asset class |
Useful life (years) |
|
Technical know how |
10 |
|
Computer software |
3 to 6 |
The Company generates revenue from sale of varied engineering products for general engineering industry, water and waste, water industry, bulk solids handling industry and also from rendering installation services along with the sale of goods, if specified in the contract with customers.
To determine whether to recognise revenue, the Company follows a 5-step process in accordance with Ind AS 115-Revenue from contracts with customers:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is measured at fair value of consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales such as goods and services tax (GST). In case of multi-element revenue arrangements, which involve delivery or performance of multiple products, services, evaluation will be done of all deliverables in an arrangement to determine whether they represent separate units of accounting at the inception of arrangement. Total arrangement consideration related to the bundled contract is allocated among the different elements based on their relative fair values (i.e., ratio of the fair value of each element to the aggregated fair value of the bundled deliverables). In case the relative fair value of different components cannot be determined on a reasonable basis, the total consideration is allocated to the different components based on residual value method.
The Company determines when it has satisfied its performance obligation to transfer a product by evaluating when a customer obtains control of that product. For some contracts, control is transferred either when the product is delivered to the customer''s site or when the product is shipped, depending on the terms of the contract (including delivery and shipping terms). However, for some contracts, a customer may obtain control of a product even though that product remains in the Companyâs physical possession. In that case, the customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the product even though it has decided not to exercise its right to take physical possession of that product. Consequently, the entity does not control the product. Instead, the entity provides custodial services to the customer over the customerâs asset.
Revenue is recognised at a point in time, when (or as) the Company satisfies performance obligations by transferring the promised goods or services to its customers.
The Company recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the statement of financial position. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.
Revenue from sale of goods is recognised when the control of goods is transferred to the buyer as per the terms of the contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Control of goods refers to the ability to direct the use of and obtain substantially all of the remaining benefits from goods.
Revenue from sale of services in respect of installation services is recognised when the performance obligation is completed.
Income from export incentives are recognised on accrual basis.
Interest income is recognised on time proportion basis considering the amount outstanding and rate applicable. For all financial assets measured at amortised cost, interest income is recorded using the effective interest rate (EIR) i.e. the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial assets.
Dividend income is recognised at the time when right to receive the payment is established.
The Company assesses at contract inception whether a contract is, or contains, a lease in accordance with Ind AS 116 - Leases. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
a) Right-of-use assets (âROU assets'')
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset.
c) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Company as a lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight-line basis over the term of the relevant lease.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted moving average basis.
Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset i.e. by equal annual instalments.
When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current applicable market rate, the effect of this favourable interest is regarded as a government grant. The loan or assistance is initially recognised and measured at fair value and the government grant is measured as the difference between the initial carrying value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy applicable to financial liabilities.
3.8 Impairment of non-financial assets
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.
At each reporting date, the Company assesses whether there is any indication based on internal/external factors, that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the statement of profit and loss. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed which is the higher of fair value less costs of disposal and value-in-use and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. Impairment losses previously recognised are accordingly reversed in the statement of profit and loss.
To determine value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Companyâs latest approved budget, adjusted as necessary to exclude the effects of future re-organisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessment of the time value of money and asset-specific risk factors.
Initial recognition of Transactions
Foreign currency transactions are recorded in the functional currency, by applying to the exchange rate applicable as at the date of the transaction.
Subsequent recognition of balances
Foreign currency non-monetary items (item balances) which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Monetary items denominated in foreign currency are restated at the exchange rate prevailing on the balance sheet date.
Exchange differences
Exchange differences arising on the settlement/restatement of monetary items at the exchange rates different from those at which they were initially recorded during the year or reported in the previous standalone financial statements, are recognised as income or expense in the year in which they arise.
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs. Subsequent measurement of financial assets and financial liabilities is described below.
Non-derivative financial assets
Subsequent measurement
Financial assets carried at amortised cost - A âfinancial assetâ is measured at the amortised cost if both the following conditions are met:
⢠The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and;
⢠Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.
De-recognition of financial assets
A financial asset is de-recognised when the contractual rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised cost using the effective interest method.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
3.11 Equity investment in subsidiaries
Investments representing equity interest in subsidiaries are measured for at cost less impairment in accordance with Ind AS 27 Separate Financial Statements. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of these investments, the difference between net disposal proceeds and the carrying amounts are recognised in the statement of profit and loss.
3.12 Equity Investment In Joint Venture
Investments representing equity interest in joint ventures are initially measured at cost in accordance with Ind AS 111 "Joint Arrangementsâ and after initial recognition, the investment in the joint venture is accounted for using equity method as prescribed under IND AS 28 âInvestments in Associates and Joint Venturesâ. The carrying amount is adjusted for the investor''s share of the post-acquisition profits or losses of the joint venture. Any dividends received from the joint venture reduce the carrying amount of the investment. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of these investments, the difference between net disposal proceeds and the carrying amounts are recognised in the statement of profit and loss.
3.13 Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (''ECL'') model for measurement and recognition of impairment loss for financial assets. ECL is provided for when there has been a significant increase in credit risk and then, factors historical trends and forward looking information. An impairment loss is recognised either based on the 12 monthsâ probability of default or lifetime probability of default.
Trade receivables
In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of such receivables.
Other financial assets
In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses.
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.
Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Current tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax liabilities are generally recognised in full for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss, unused tax credits (Minimum alternate tax credit entitlement) or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Companyâs forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Minimum Alternative Tax (âMATâ) credit entitlement under the provisions of the Indian Income-tax Act, 1961 is recognised as a deferred tax asset when it is probable that future economic benefit associated with it in the form of adjustment of future income tax liability, will flow to the Company and the asset can be measured reliably. MAT credit entitlement is set off to the extent allowed in the year in which the Company becomes liable to pay income taxes at the enacted tax rates. MAT credit entitlement is reviewed at each reporting date and is recognised to the extent that is probable that future taxable profits will be available against which they can be used. MAT credit entitlement has been presented as deferred tax asset in Balance Sheet. Significant management judgment is required to determine the probability of recognition of MAT credit entitlement.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
The Company recognises a liability to pay dividend to equity holders of the parent when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Short-term employee benefits
All employee benefits payable wholly within twelve months of receiving employee services are classified as shortterm employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees.
Defined contribution plan
Provident fund benefit is a defined contribution plan under which the Company pays fixed contributions to Regional Provident Fund Commissioner in accordance with Employees Provident Fund and Miscellaneous Provision Act, 1952. The Company has no legal or constructive obligations to pay further contributions after payment of the fixed contribution. The contributions recognised in respect of defined contribution plans are expensed as they accrue. Liabilities and assets may be recognised if underpayment or prepayment has occurred and are included in non-current/current liabilities or non-current/current assets, respectively.
Defined benefit plan
The Company provides for gratuity, a defined benefit retirement plan, which defines an amount of benefit that an employee will receive on separation from the Company, usually dependent on one or more factors such as age, years of service and remuneration. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount based on the respective employeeâs salary and the tenure of employment. Vesting occurs upon completion of five years of service. The liability recognised in the balance sheet for defined benefit plans is the present value of the defined benefit obligation (âDBCT at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations. The present value of DBO is calculated annually by an independent actuary using the projected unit credit method. Actuarial gains/losses resulting from re-measurements of the liability due to change in actuarial assumptions are included in other comprehensive income.
Other long-term employee benefits
The liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after time balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method, actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the Statement of Profit and loss in the year in which such gains or losses are determined.
3.17 Provisions, contingent liabilities and contingent assets
Provisions are recognised only when there is a present obligation, as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When provisions are discounted, the increase in the provision due to the passage of time is recognised as a finance cost.
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Company has a contract under which unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
Provisions for warranty-related costs are recognised when the service provided. Provision is based on historical experience. The estimate of such warranty-related costs is revised annually.
Contingent liability is disclosed for:
⢠Possible obligations which will be confirmed only by future events not wholly within the control of the Company or
⢠Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are not recognised. However, when inflow of economic benefits is probable, related asset is disclosed.
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
The Company has equity-settled share-based remuneration plans for its employees. None of the Company''s plans are cash-settled.
Where employees are rewarded using share-based payments, the fair value of employeesâ services is determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example profitability and sales growth targets and performance conditions).
All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to equity. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest.
Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, are allocated to share capital up to the nominal (or par) value of the shares issued with any excess being recorded as share premium.
The ESOP trust has been treated as an extension of the Company and accordingly shares held by ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities, income and expenses of the trust are accounted for as assets and liabilities of the Company.
Cash and cash equivalents comprises of cash at banks and on hand, cheques on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
The Companyâs business activity primarily falls within a single segment which is manufacturing and trading of varied engineering products for general engineering industry, water and wastewater industry and bulk solids handling industry. The geographical segments considered are "within India" and "outside India" and are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker ("CODM") of the Company who monitors the operating results of its business units not separately for the purpose of making decisions about resource allocation and performance assessment. The CODM is considered to be the Board of Directors who make strategic decisions and is responsible for allocating resources and assessing the financial performance of the operating segments. The analysis of geographical segments is based on geographical location of the customers.
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Cash flows are reported using the indirect method, whereby profit before tax 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 items 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. Cash and cash equivalents for the purpose of the statement of cash flows comprise cash and deposit with banks and financial institutions. The Company considers all
highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalent.
3.24 Recent accounting pronouncement
Ministry of Corporate Affairs (âMCA") notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from 01 April 2024.
4. Significant management judgement in applying accounting policies and estimation uncertainty
The preparation of the Companyâs standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the related disclosures.
Significant management judgements
a) Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Companyâs future taxable income against which the deferred tax assets can be utilized.
b) Evaluation of indicators for impairment of assets - The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.
c) Contingent liabilities- At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.
d) Provisions - At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.
Significant estimates
a) Impairment of financial assets - At each balance sheet date, based on historical default rates observed over expected life, existing market conditions as well as forward looking estimates, the management assesses the expected credit losses on outstanding receivables and advances. Further, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with industry and country in which the customer operates.
b) Fair value measurements - Management applies valuation techniques to determine fair value of stock options. This involves developing estimates and assumptions around volatility, dividend yield which may affect the value of stock options. Some of the Companyâs assets and liabilities are measured at fair value for financial reporting purposes. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for assets or liabilities that are not based on observable market data (unobservable inputs)
The Company recognizes transfers between levels of fair value hierarchy at the end of reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in Note 44 - Financial Instruments.
c) Defined benefit obligation (DBO) - Management''s estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
d) Useful lives of depreciable/amortisable assets - Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilisation of assets.
e) Provision for non/ slow moving Inventory - Management creates adequate provisions on the non-moving or slow-moving inventory in accordance with suitable policy to determine net realizable value of the Inventory. Inventory includes Raw material, finished goods and stock in trade. Inventories are measured at the lower of cost and net realizable value. Provision is made for slow moving and obsolete inventory in accordance with the policy of the Company. The Company''s policy and provision for slow moving and obsolete inventory is reviewed periodically by the management.
Mar 31, 2023
Summary of significant accounting policies
The standalone financial statements have been prepared using the significant accounting policies and measurement bases
summarised below. These policies have been consistently applied to all the years presented, unless otherwise stated.
3.1 Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment are stated at cost, less accumulated depreciation and amortisation. The cost comprises
purchase price and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade
discount and rebates are deducted in arriving at the purchase price.
Subsequent costs are included in the asset''s carrying amount or 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. All other repair and maintenance
costs are recognised in statement of profit and loss as incurred.
Subsequent measurement (depreciation and useful lives)
Depreciation on property, plant and equipment is provided on a straight-line basis, computed on the basis of useful lives (as
set out below) prescribed in Schedule II to the Act.
De-recognition
An item of property, plant and equipment and any significant component initially recognised is derecognised 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/significant component (calculated as the difference between the net disposal proceeds and the carrying amount of the
asset/significant component) is recognised in statement of profit and loss, when the asset is derecognised.
Capital work-in-progress are carried at cost, comprising direct cost and related incidental expenses acquire property, plant
and equipment. Assets which are not ready to be intended use are also shown under capital work-in-progress.
Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization
criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.
Subsequent measurement
Intangible assets consisting of technical know-how and computer software. These are amortised on a straight-line basis over
the estimated useful lives from the date when the assets are available for use. The estimated useful life (amortisation period)
of the intangible assets is arrived basis the expected pattern of consumption of economic benefits and is reviewed at the end
of each financial year and the amortisation period is revised to reflect the changed pattern, if any.
3.4 Intangible assets under development
Intangible assets under development represents expenditure incurred in respect of intangible assets under development and
are carried at cost. Cost includes development cost, borrowing costs and other direct expenditure necessary to create,
produce and prepare the asset to be capable of operating in the manner intended by management. These are recognised as
assets when the Company can demonstrate following recognition requirements:
⢠The development costs can be measured reliably
⢠The project is technically and commercially feasible
⢠The Company intends to and has sufficient resources to complete the project
⢠The Company has the ability to use or sell such intangible asset
⢠The software will generate probable future economic benefits.
Amortisation of the asset begins when development is complete and the asset is available for use.
The Company generates revenue from sale of varied engineering products for general engineering industry, water and
waste, water industry, bulk solids handling industry and also from rendering installation services along with the sale of goods,
if specified in the contract with customers.
To determine whether to recognise revenue, the Company follows a 5-step process in accordance with Ind AS 115 -Revenue
from contracts with customers:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is measured at fair value of consideration received or receivable, after deduction of any trade discounts, volume
rebates and any taxes or duties collected on behalf of the government which are levied on sales such as goods and services
tax (GST). In case of multi-element revenue arrangements, which involve delivery or performance of multiple products,
services, evaluation will be done of all deliverables in an arrangement to determine whether they represent separate units of
accounting at the inception of arrangement. Total arrangement consideration related to the bundled contract is allocated
among the different elements based on their relative fair values (i.e., ratio of the fair value of each element to the aggregated
fair value of the bundled deliverables). In case the relative fair value of different components cannot be determined on a
reasonable basis, the total consideration is allocated to the different components based on residual value method.
The Company determines when it has satisfied its performance obligation to transfer a product by evaluating when a
customer obtains control of that product. For some contracts, control is transferred either when the product is delivered to the
customer''s site or when the product is shipped, depending on the terms of the contract (including delivery and shipping
terms). However, for some contracts, a customer may obtain control of a product even though that product remains in the
Company''s physical possession. In that case, the customer has the ability to direct the use of, and obtain substantially all of
the remaining benefits from, the product even though it has decided not to exercise its right to take physical possession of that
product. Consequently, the entity does not control the product. Instead, the entity provides custodial services to the customer
over the customer''s asset.
Revenue is recognised at a point in time, when (or as) the Company satisfies performance obligations by transferring the
promised goods or services to its customers.
The Company recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and
reports these amounts as other liabilities in the statement of financial position. Similarly, if the Company satisfies a
performance obligation before it receives the consideration, the Company recognises either a contract asset or a receivable
in its statement of financial position, depending on whether something other than the passage of time is required before the
consideration is due.
Revenue from sale of goods is recognised when the control of goods is transferred to the buyer as per the terms of the
contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods.
Control of goods refers to the ability to direct the use of and obtain substantially all of the remaining benefits from goods.
Revenue from sale of services in respect of installation services is recognised when the performance obligation is completed.
Export benefits
Income from export incentives are recognised on accrual basis.
Interest income is recognised on time proportion basis considering the amount outstanding and rate applicable. For all
financial assets measured at amortised cost, interest income is recorded using the effective interest rate (EIR) i.e. the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount
of the financial assets.
Dividend income is recognised at the time when right to receive the payment is established.
The Company assesses at contract inception whether a contract is, or contains, a lease in accordance with Ind AS 116 -
Leases. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases
of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing
the right to use the underlying assets.
a) Right-of-use assets (''ROU assets'')
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets.
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease
term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a
rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date,
the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change
in the lease payments or a change in the assessment of an option to purchase the underlying asset.
c) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease
term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-
value assets recognition exemption that are considered to be low value. Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a straight-line basis over the lease term.
Company as a lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other
leases are classified as operating leases.
For operating leases, rental income is recognized on a straight-line basis over the term of the relevant lease.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
- Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present
location and condition. Cost is determined on weighted average basis.
- Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing
overheads based on the normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
the estimated costs necessary to make the sale.
Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis
over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an
asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value amounts and
released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset i.e. by
equal annual instalments.
When loans or similar assistance are provided by governments or related institutions, with an interest rate below the current
applicable market rate, the effect of this favourable interest is regarded as a government grant. The loan or assistance is
initially recognised and measured at fair value and the government grant is measured as the difference between the initial
carrying value of the loan and the proceeds received. The loan is subsequently measured as per the accounting policy
applicable to financial liabilities.
3.9 Impairment of non-financial assets
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash
inflows (cash generating units). As a result, some assets are tested individually for impairment and some are tested at cash¬
generating unit level.
At each reporting date, the Company assesses whether there is any indication based on internal/external factors, that an
asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such
recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than
its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment
loss and is recognised in the statement of profit and loss. If, at the reporting date there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is reassessed which is the higher of fair value less costs
of disposal and value-in-use and the asset is reflected at the recoverable amount subject to a maximum of depreciated
historical cost. Impairment losses previously recognised are accordingly reversed in the statement of profit and loss.
To determine value-in-use, management estimates expected future cash flows from each cash-generating unit and
determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment
testing procedures are directly linked to the Company''s latest approved budget, adjusted as necessary to exclude the effects
of future re-organisations and asset enhancements. Discount factors are determined individually for each cash-generating
unit and reflect current market assessment of the time value of money and asset-specific risk factors.
Initial recognition of Transactions
Foreign currency transactions are recorded in the functional currency, by applying to the exchange rate applicable as at the
date of the transaction.
Subsequent recognition of balances
Foreign currency non-monetary items (item balances) which are carried in terms of historical cost denominated in a foreign
currency are reported using the exchange rate at the date of the transaction. Monetary items denominated in foreign currency
are restated at the exchange rate prevailing on the balance sheet date.
Exchange differences
Exchange differences arising on the settlement/restatement of monetary items at the exchange rates different from those at
which they were initially recorded during the year or reported in the previous standalone financial statements, are recognised
as income or expense in the year in which they arise.
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of
the financial instrument and are measured initially at fair value adjusted for transaction costs. Subsequent measurement of
financial assets and financial liabilities is described below.
Non-derivative financial assets
Subsequent measurement
Financial assets carried at amortised cost - A ''financial asset'' is measured at the amortised cost if both the following
conditions are met:
⢠The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
⢠Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest
(SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate
(EIR) method.
De-recognition of financial assets
A financial asset is de-recognised when the contractual rights to receive cash flows from the asset have expired or the
Company has transferred its rights to receive cash flows from the asset.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised cost using the effective
interest method.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit and loss.
Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re¬
measured to their fair value at the end of each reporting period.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets
and settle the liabilities simultaneously. The legally enforceable right must not be contingent on future events and must be
enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the
counterparty.
3.12 Equity investment in subsidiaries
Investments representing equity interest in subsidiaries are measured for at cost less impairment in accordance with Ind AS
27 Separate Financial Statements. Where an indication of impairment exists, the carrying amount of the investment is
assessed and written down immediately to its recoverable amount. On disposal of these investments, the difference between
net disposal proceeds and the carrying amounts are recognised in the statement of profit and loss.
3.13 Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (''ECL'') model for measurement and recognition of
impairment loss for financial assets. ECL is provided for when there has been a significant increase in credit risk and then,
factors historical trends and forward looking information. An impairment loss is recognised either based on the 12 months''
probability of default or lifetime probability of default.
Trade receivables
In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of
loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit
losses that result from all possible default events over the expected life of such receivables.
Other financial assets
In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has increased
significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company
measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime
expected credit losses.
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity.
Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax
Act, 1961. Current tax items are recognised in correlation to the underlying transaction either in other comprehensive income
or directly in equity.
Deferred tax liabilities are generally recognised in full for all taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that the underlying tax loss, unused tax credits (Minimum alternate tax credit
entitlement) or deductible temporary difference will be utilised against future taxable income. This is assessed based on the
Company''s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits
on the use of any unused tax loss or credit. 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 deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive
income or directly in equity.
Minimum Alternative Tax (''MAT'') credit entitlement under the provisions of the Indian Income-tax Act, 1961 is recognised as a
deferred tax asset when it is probable that future economic benefit associated with it in the form of adjustment of future income
tax liability, will flow to the Company and the asset can be measured reliably. MAT credit entitlement is set off to the extent
allowed in the year in which the Company becomes liable to pay income taxes at the enacted tax rates. MAT credit entitlement
is reviewed at each reporting date and is recognised to the extent that is probable that future taxable profits will be available
against which they can be used. MAT credit entitlement has been presented as deferred tax asset in Balance Sheet.
Significant management judgment is required to determine the probability of recognition of MAT credit entitlement.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised
amounts and there is an intention to settle the asset and liability on a net basis. Deferred tax assets and deferred tax liabilities
are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred
tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
The Company recognises a liability to pay dividend to equity holders of the parent when the distribution is authorized and the
distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it
is approved by the shareholders. A corresponding amount is recognised directly in equity.
Short-term employee benefits
All employee benefits payable wholly within twelve months of receiving employee services are classified as short-term
employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short-term
employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is
rendered by employees.
Defined contribution plan
Provident fund benefit is a defined contribution plan under which the Company pays fixed contributions to Regional Provident
Fund Commissioner in accordance with Employees Provident Fund and Miscellaneous Provision Act, 1952. The Company
has no legal or constructive obligations to pay further contributions after payment of the fixed contribution. The contributions
recognised in respect of defined contribution plans are expensed as they accrue. Liabilities and assets may be recognised if
underpayment or prepayment has occurred and are included in non-current/current liabilities or non-current/current assets,
respectively.
Defined benefit plan
The Company provides for gratuity, a defined benefit retirement plan, which defines an amount of benefit that an employee
will receive on separation from the Company, usually dependent on one or more factors such as age, years of service and
remuneration. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on
termination of employment of an amount based on the respective employee''s salary and the tenure of employment. Vesting
occurs upon completion of five years of service. The liability recognised in the balance sheet for defined benefit plans is the
present value of the defined benefit obligation (''DBO'') at the balance sheet date, together with adjustments for unrecognised
actuarial gains or losses and past service costs. The discount rates used for determining the present value of obligation under
defined benefit plans, is based on the market yields on Government securities as at the Balance Sheet date, having maturity
periods approximating to the terms of related obligations. The present value of DBO is calculated annually by an independent
actuary using the projected unit credit method. Actuarial gains/losses resulting from re-measurements of the liability due to
change in actuarial assumptions are included in other comprehensive income.
Other long-term employee benefits
The Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance
sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value of
benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to
be availed more than one year after time balance sheet date is estimated on the basis of an actuarial valuation performed by
an independent actuary using the projected unit credit method, actuarial gains and losses arising from past experience and
changes in actuarial assumptions are credited or charged to the Statement of Profit and loss in the year in which such gains or
losses are determined.
Mar 31, 2018
1. a. Background of the Company
Jash Engineering Limited (''the Company'') was incorporated on 29 September1973and is engaged in the business of manufacturing and trading of varied engineering products for general engineering industry, water and waste water industry and bulk solids handling industry. The Company is domiciled in India and its registered office is situated at 31, Sector-C, Sanwer Road, Industrial Area, Indore - 452015, Madhya Pradesh. During the current year ended 31 March 2018, the Company got listed in the Emerge Board of National Stock Exchange of India Limited.
b. Basis of preparation
The financial statements are prepared under historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India and including the Accounting Standards specified under section 133 of the Companies Act, 2013 (the ''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). These financial statements have been prepared on a going concern basis and the accounting policies have been consistently applied by the Company.
All assets and liabilities have been classified as current or non-current, when applicable based on the operating cycle of the Company as per the guidance as set out in the Schedule III to the Companies Act, 2013.
2. Summary of significant accounting policies
a. Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the results of operations during the reporting periods. Although these estimates are based upon management''s knowledge of current events and actions, actual results could differ from those estimates and revision, if any, are recognized in the current and future periods.
b. Property plant and equipment and depreciation
Property plant and equipment are stated at cost less accumulated depreciation.
Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Property plant and equipment under construction and cost of assets not ready for use before the year-end, are classified as capital work in progress.
Depreciation on property plant and equipment is provided using straight-line method, computed on the basis of useful life prescribed in Schedule II to the Companies Act, 2013, on a pro-rata basis from the date the asset is ready for use subject to adjustments arising out of transitional provisions of Schedule II.
Leasehold land is mortised over their respective lease period.
c. Intangible fixed assets and amortization
Intangible assets comprise of technical know-how and computer software
These are being amortized over their estimated useful lives on a straight line basis, commencing from the date the asset is available to the Company for its use.
The amortization rates are indicative of the expected useful lives of the assets.
The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.
d. Investments
Investments are classified as non-current or current, based on management''s intention at the time of purchase. Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current investments.
Trade investments are the investments made for or to enhance the Company''s business interests.
Current investments are stated at lower of cost and fair value determined on an individual investment basis. Non-current investments are stated at cost and provision for diminution in their value, other than temporary, is made in the financial statements.
Profit/loss on sale of investments is computed with reference to the average cost of the investment.
e. Inventories
- Inventories are valued as follows:
i. Raw materials including components, packing materials, stores and spares and goods in transit - At lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
ii. Work-in-progress - At cost up to estimated stage of completion.
iii. Finished goods and goods purchased for resale - At lower of cost and net realizable value.
- Cost of inventories is ascertained on the following basis:
i. Raw materials, stores and spare parts and packing materials - on First in First out method (FIFO).
ii. Finished goods purchased for resale - FIFO.
iii. Cost of manufactured finished goods and stock in process comprises of material, labour and other related production overheads including depreciation.
f. Revenue recognition
- Sale of goods:
Revenue from sale of goods is recognized when significant risks and rewards in respect of ownership of the goods are transferred to the customer and is stated inclusive of excise duty and net of trade discounts, sales return and sales tax wherever applicable.
- Sale of services:
Revenue from the sale of services is recognized when the services are rendered.
- Power generation:
Revenue from power generation is recognized on accrual basis, on the basis of actual power sold, as per the terms and conditions of the relevant power purchase agreement.
- Export benefits:
Income in respect of export benefits is recognized in the period, when there is no significant uncertainty about the measurability and ultimate realization of such benefits.
- Other income:
i) Interest income is recognized on a time proportion basis at the applicable rates.
ii) Dividend income is recognized when the right to receive dividend is established.
g. Borrowing costs
Borrowing costs that are attributable to the acquisition and / or construction of qualifying assets are capitalized as part of the cost of such assets, in accordance with notified Accounting Standard 16 âBorrowing Costsâ. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. Capitalization of borrowing costs is suspended in the period during which the active development is delayed due to other than temporary interruption. All other borrowing costs are charged to the statement of profit and loss as incurred.
h. Income taxes
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations, where the Company has unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
Minimum Alternate tax (''MAT'') credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.
I. Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of the transaction. All monetary items denominated in foreign currency are converted into Indian rupees at the year-end exchange rate.
The exchange differences arising on such conversion and on settlement of the transactions are recognized in the Statement of Profit and Loss.
j. Employee benefits
Expenses and liabilities in respect of employee benefits are recorded in accordance with the notified Accounting Standard 15 -Employee Benefits.
- Provident fund:
The Company makes contribution to statutory provident fund in accordance with the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. In terms of the Guidance on implementing the revised AS - 15, issued by the Accounting Standards Board of the ICAI, the provident fund trust set up by the Company is treated as a defined benefit plan since the Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any is recognized as an expense in the period in which services are rendered by the employee.
- Gratuity:
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of the defined benefit/ obligation at the balance sheet date, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the Statement of Profit and Loss in the year in which such gains or losses are determined.
- Compensated absences:
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the Statement ofProfit and Loss in the year in which such gains or losses are determined.
- Other short term benefits:
Expense in respect of other short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.
k. Leases
Operating leases:
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Lease payments under an operating lease are recognized as an expense in the Statement of Profit and Loss in accordance with the terms of lease deed.
l. Impairment of assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost and is accordingly reversed in the Statement of Profit and Loss.
m. Contingent liabilities and provisions
Depending upon the facts of each case and after due evaluation of legal aspects, claims against the Company not acknowledged as debts are treated as contingent liabilities. In respect of statutory dues disputed and contested by the Company, contingent liabilities are provided for and disclosed as per original demand without taking into account any interest or penalty that may accrue thereafter. The Company makes a provision when there is a present obligation as a result of a past event where the outflow of economic resources is probable and a reliable estimate of the amount of obligation can be made. Possible future or present obligations that may but will probably not require outflow of resources or where the same cannot be reliably estimated, has been disclosed as a contingent liability in the Financial Statements.
n. Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of dilutive potential equity shares.
o. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short term bank deposits with an original maturity of three months or less.
p. Dividend
The Company declares dividend to shareholders after the balance sheet date, the Company will not recognize those dividends as a liability at the balance sheet date unless a statute requires otherwise and such dividends has been disclosed in the notes to the financial statements. \
q. Share issue expenses
The share issue expenses are adjusted against the balance in securities premium account as permitted under Section 52 of the Companies Act, 2013.
c Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs, 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
d) Details of shares issued pursuant to contract without payment being received in cash, allotted as fully paid up by way of bonus issues and bought back during the last 5 years to be given for each class of shares
There are no shares issued pursuant to contract without payment being received in cash, allotted as fully paid up by way of bonus issues and bought back during the last 5 years.
Repayment terms and security for the outstanding long term borrowings (including current maturities):
I) Term loans from banks
The company availed term loan facility from State Bank of India amounting to Rs, 120,000,000 at rate of interest of State Bank of India''s base rate (10%) plus 3.4%. Base rate keeps on changing. Repayment of term loan is to be done in 16 quarterly installment commencing from July 2015 with last installment falling due in year 2019-20. During the year the Company has converted its rupee term loan into foreign currency loan amounting Rs, 69,922,408 (previous year Rs, 9,725,790). Outstanding book balance of term loan is Rs, 71,490,070 (previous year: Rs, 94,416,890).
Note - 5 (Cont''d)
The aforesaid term loan is secured by way of :
(a) First pari passu charge over Company''s entire stocks comprising raw materials, stock in process, finished goods, consumable stores and spares and receivables at Unit I and Unit II, SEZ
.b) Exclusive first charge by way of equitable mortgage over land and shed and hypothecation over Company''s entire present and future property, plant and equipment comprising land, building, plant and machinery and miscellaneous property, plant and equipment at Unit I and SEZ .Further secured by following collateral securities:
(a) Second charge by way of equitable mortgage of land and shed and hypothecation of plant and machinery situated at plot no. 18-C, 29 to 31,32 B Sector C, Industrial Area, Sanwer Road, indore and Plot No. M-11, Misc Zone Phase -II SEZ,Pithampur Distt. Dhar, survey no. 74/1, 74/2/1, 76/1/3, 76/1 Patwari Halka no. 19, Bardari tehsil, Sanwer district - Indore and survey no. 77, Patwari Halka no. 36, Bardari, Sanwer, district Indore.
(b) First pari passu charge by way of equitable mortgage of factory land and building situated at Bardari village, Sanwer district Indore Patwari Halka no. 19, Khasra no. 74/2/2 admeasuring 1.179 hectare and first charge on khasra no 76/1/3 admeasuing 0.183 hectare and 76/1/1 admeasuring 0.243 hectare in the name of Patamin Investments Private Limited which is an entity in which key management personnel has significant influence.
(c) Pledge of 30% shares of Shivpad Engineers Private Limited.
Further secured by personal guarantee of Directors, Mr. Pratik Patel and Mr. L. D. Amin and corporate guarantee of M/s Patamin Investments Private Limited which is an entity in which key management personnel has significant influence.
ii) Term loans from financial institutions
1) The company availed term loan facilities from Small Industries Development Bank of India amounting to Rs, 40,000,000 and Rs, 22.430.000 at rate of interest of 9.50 %. (previous year 11.45%). Repayment of term loan is to be done in 36 monthly installment commencing from March 2018 with last installment falling due in year 2020-2021. Outstanding book balance of term loan is Rs, 60.352.000 (previous year: Rs, 6,169,000).
The aforesaid term loan is secured by way of :
(a) First hypothecation charge over the company''s movable such as plant machinery, vehicle, machinery spares, tools, office equipment, computer, computer fixture acquired under the project.
(b) Extension of first charge by way of hypothecation of all movables including plant, machinery, vechicles, machinery spares , tools office equipment, computers acquired earlier financial assistance.
(c) Residual charge by way of mortgage of leasehold factory land and Building (Unit-1) situated at Survey No. 18B2, 18E2, 18 D2, 18C, 19, 29, 30, 31 & 32B industrial area Sector C, village Sukhliya Tehsil & Dist Indore.
(d) Residual charge by way of mortgage of leasehold factory land and Building situated at survey no. 74/1, 74/2/1, 76/1/2, 76/1/4, 77/1, 74/2/2 and 74/1/1 Patwari Halka no. 19, Bardari tehsil, Sanwer district, Indore and survey no. 77, Patwari Halka no. 36, Bardari tehsil, Sanwer district, Indore.
(e) Residual charge by way of mortgage of land and building situated at plot no. M-11 SEZ, Pithampur, Tehsil & district Dhar.
(f) Residual charge by way of mortgage of land and building situated at survey no. 74/2/2, 76/1/1 village Bardari, Sanwer , Dist. Indore owned by Patamin Investment Private Limited.
(g) Further secured by personal guarantee of Directors, Mr. Pratik Patel and Mr. L. D. Amin and corporate guarantee of M/s Patamin Investments Private Limited.
iv) Loan from related parties
(a)During the year ended 31 March 2018, unsecured loan of Rs, 20,161,745 taken from Mr. Partik Patel has been fully repaid and outstanding balance as on 31 March 2018 is Nil (previous year Rs, 17,634,644). The loan carried an annual rate of interest of 12% per annum and was repayable in monthly installment of Rs, 50,000 each commencing from August, 2014.The Company has obtained new unsecured loan repayable on demand from Mr. Partik Patel of Rs, 3,000,000 which has been classified under short term borrowings.
(b)During the year ended 31 March 2018, unsecured loan taken from L. D. Amin (HUF), Harsh Patel, Bhairavi Patel and Patamin Investments Private Limited has been repaid. Outstanding book balance of loan taken from L. D. Amin (HUF) as on 31 March 2018 is Rs, Nil (previous year Rs, 2,369,192 ), Harsh Patel is Rs, Nil (previous year Rs, 837,587), Bhairavi Patel of Rs, Nil (previous year Rs,418,793) and from Patamin Investments Private Limited as on 31 March 2018 is Rs, Nil (previous year Rs,6,286,803). These loans were taken at an annual rate of interest of 12% per annum and were repayable after 5 years from the date of such loan.
I) Fund based credit facility sanctioned to the Company from HDFC Bank during the year comprise of CC facility of Rs, 110,000,000 (previous year Rs,60,000,000) and short term loan facility of Rs, 50,000,000 (previous year Nil) an annual rate of interest of 2.60% above MCLR-1 year. Outstanding book balance for CC account from HDFC as on 31 March 2018 is Rs, 36,598,840 (previous year Rs, 24,249,086), short term loan Rs, 30,000,000 (previous year Nil).
The facilities from bank are secured by way of:Primary security: First pari passu charge on all current assets of the Company as on 31 March 2017.
Collateral:
(a) Pledge of 30% shares of Shivpad Engineers Private Limited.
(b)Second pari passu charge on property, plant and equipment ofUnit 1 and SEZ.
© Second pari passu charge on entire property, plant and equipment of Unit 2 and SEZ.
(d) Second pari passu charge on land owned by Patamin Investments Private Limited.
Also secured by way of guarantees from:
- Mr. L.D. Amin
- Mr. Pratik Patel
ii) Fund based credit facility from State Bank of India comprises of cash credit (CC) facility amounting to Rs, 290,000,000 (previous year Rs, 290,000,000) at an annual rate of interest of 1.50% above MCLR-1year, export packing credits (EPC) within CC limit amounting to Rs, 150,000,000 (previous year Rs, 90,000,000) at an annual rate of interest 0.55% above MCLR-1 year. Outstanding
book balance for CC account from SBI Rs, 184,781,186 (previous year Rs, 223,290,094), EPC account as on 31 March 2018 is for Rs, 74,348,936 (previous year Rs,47,090,475).
The facilities from bank are secured by way of:
Primary security: First hypothecation charge over Company''s entire stocks comprising raw materials, stock in process, finished goods, consumable stores and spares and receivables at Unit I and SEZ both or at such other places approved by the Bank including good in transit/shipment in the name of Company.Collateral:
(a) Second charge by way of equitable mortgage of land and shed and hypothecation of plant and machinery situated at survey no. 74/1, 74/2/1, 76/1,/3, 76/1 Patwari Halka no. 19, Bardari tehsil, Sanwer district, Indore and survey no. 77, Patwari Halka no. 36, Bardari tehsil, Sanwer district, Indore.
(b) Second charge by way of equitable mortgage of land and shed and hypothecation of plant and machinery situated at Unit I and SEZ both.
(c) First charge by way of equitable mortgage of diverted land situated at Bardari village, Sanwer district, Indore Patwari Halka no.
19, Khasra no. 74/2/2 admeasuring 1.179 hectare in the name of Patamin Investments Private Limited.
(d) Pledge of 30% shares of Shivpad Engineers Private Limited.
Also secured by way of guarantees from:
- Mr. L.D. Amin
- Mr. Pratik Patel
- Patamin Investments Private Limited
ii) Loan from related parties
Unsecured loan taken from Mr. Pratik Patel, amounting to Rs, 3,000,000 (previous year Rs, Nil) at annual rate of interest of 10% per annum is repayable on demand. Outstanding book balance of such loan is Rs, 2,139,164 (previous year Rs, Nil).
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The Company made annual contribution to the Life Insurance Corporation of India (''LIC'') of an amount advised by the LIC. The Company was not informed by LIC of the investment made or the breakdown of plan assets by investment type, accordingly related disclosures are not included in these financial statements.
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మరింత సమాచారం Jash Engineering Ltd.
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Jash Engineering Ltd. టూల్స్
- బల్క్ డీల్స్
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Jash Engineering Ltd. కంపెనీ వివరాలు
- కంపెనీ ప్రొఫైల్
- కంపెనీ చరిత్ర
- నిర్వహణ బృందం
- క్యాపిటల్ స్ట్రక్చర్
- ప్రొడక్ట్ మిక్స్
- బ్యాంకర్/ఆడిటర్/రిజిస్ట్రార్
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కంపెనీ చరిత్ర
- బిఎస్ఇ ధర చరిత్ర
- ఎన్ఎస్ఇ ధర చరిత్ర
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Jash Engineering Ltd. ముఖ్య ఆర్థిక నిష్పత్తులు
- నిష్పత్తులు
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Jash Engineering Ltd. ఫలితాలు
- క్వార్టర్లీ ఫలితాలు
- హాఫ్ ఇయర్లీ ఫలితాలు
- 9నెలల ఫలితాలు
- వార్షిక ఫలితాలు
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Jash Engineering Ltd. ఆర్థిక డేటా
- ఆడిట్ ఫలితాలు
- క్యాష్ ఫ్లో
- బ్యాలెన్స్ షీట్
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Jash Engineering Ltd. నివేదికలు
- అకౌంటింగ్ విధానాలు
- ఆడిటర్స్ నివేదిక
- డైరక్టర్స్ నివేదిక
- ఖాతాకు గమనికలు
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Jash Engineering Ltd. కార్పొరేట్ ప్రకటనలు
- బుక్ క్లోజర్
- డివిడెండ్
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