Synergy Green Industries Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

NOTE 33. Material accounting policies
NOTE 33.1. Basis of preparation

The financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) as
issued under the Companies (Indian Accounting Standards) Rules, 2015 (as amended till date)

The financial statements were authorized for issue by the Board of Directors as on 9th May, 2025.

NOTE 33.2. Basis of measurement

The financial statements have been prepared under the historical cost convention with the exception of certain
assets and liabilities that are required to be carried at fair value by Ind AS.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.

NOTE 33.3. Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the company’s functional currency. All
financial information is presented in INR rounded to the nearest Lakhs except share and per share data, unless
otherwise stated.

Exchange differences are recognized in the Statement of Profit and Loss except to the extent, exchange
differences which are regarded as an adjustment to interest costs on foreign currency borrowings, are capitalized
as part of borrowing costs.

NOTE 33.4. Significant accounting judgments, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires the management to make judgments,
estimates and assumptions that affect the reported amounts of revenue, expenses, current assets, non-current
assets, current liabilities, noncurrent liabilities and disclosure of the contingent liabilities at the end of each
reporting period. Although these estimates are based on management’s best knowledge of current events and
actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material
adjustment to the carrying value of assets or liabilities in future periods.

This note provides an overview of the areas that involve a higher degree of judgment or complexity, and of items
which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than
those originally assessed.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and future periods affected.

Critical estimates and judgments

The areas involving critical estimates or judgments are:

1. Estimation of defined benefit obligation - Refer note 36

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from
actual developments in the future. These include the determination of the discount rate; future salary
increases and mortality rates, attrition rate etc. Due to the complexities involved in the valuation and its long¬
term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for
plans operated in India, the management considers the interest rates of government bonds in currencies
consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables which tend to change only at interval
in response to demographic changes. Future salary increases and gratuity increases are based on past
historical average and future expectation of inflation rates.

Further details about gratuity obligations are given in Note 36.

2. Impairment - Refer no. 33.16

The Company estimates the value in use of the cash generating unit (CGU) based on future cash flows after
considering current economic conditions and trends, estimated future operating results and growth rates
and anticipated future economic and regulatory conditions. The estimated cash flows are developed using
internal forecasts. The cash flows are discounted using a suitable discount rate in order to calculate the
present value.

The impairment provisions for financial assets disclosed are based on assumptions about risk of default and
expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs
to the impairment calculation, based on the Company’s past history, existing market conditions as well as
forward looking estimates at the end of each reporting period.

3. Deferred tax assets are recognized for all deductible temporary differences including the carry forward
of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax losses can be utilized.

4. Lease term - The company has applied provisions of Ind AS 116 effective 01st April, 2019. The said standard
provides for certain recognition exemptions for short term leases as well as provides for certain criteria when
the lease contracts are non-enforceable. The determination of lease term for the purpose of availing such
exemptions and evaluation of such criteria for non-enforceability of a contract involves significant judgment.

Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is current when it is:

• Expected to be realised or intended to sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period

AH other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

NOTE 33.5. Inventories

• Raw materials, components, stores and spares are valued at cost or net realizable value whichever is lower.
Cost includes all cost of purchase and incidental expenses incurred in bringing the inventories to their
present location and condition. Cost is ascertained using weighted average method.

• Work-in-process and finished goods are valued at cost or net realisable value whichever is lower. Cost
includes direct materials; labour costs and a proportion of manufacturing overheads i.e. cost of conversion.
Variable production overheads are allocated to each unit of production on the basis of the actual use of
the production facilities. Fixed overheads are allocated based on the normal operating capacity, or actual
capacity if actual capacity approximates normal capacity.

• Materials-in-transit are valued at actual cost incurred up to the date of balance sheet.

• Net realizable 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.

• Runners and Risers are valued at replacement cost or net realisable value whichever is lower.

• The inventory of patterns purchased and held for sale is valued at lower of cost and net realizable value.
The cost comprises of all the costs of purchases and other costs incurred in bringing the inventories to their
present location and condition

NOTE 33.6. Cash and short-term deposits

Cash and short-term deposits in the balance sheet comprise cash at banks and on hand and
highly liquid short-term deposits with an original maturity of three months or less, which are
subject to an insignificant risk of changes in value.

NOTE 33.7. Property, plant and equipment

• Recognition and measurement

The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable
that future economic benefits associated with the item will flow to the entity; and the cost of the item can
be measured reliably. This recognition principle is applied to costs incurred initially to acquire an item of
property, plant and equipment and also to costs incurred subsequently to add to, replace part of, or service it.
All other repair and maintenance costs, including regular servicing, are recognised in the statement of profit
and loss as incurred. When a replacement occurs, the carrying value of the replaced part is de-recognised.
Where an item of property, plant and equipment comprises major components having different useful lives,
these components are accounted for as separate items.

Items of property, plant and equipment are measured at cost of acquisition or deemed cost applied on
transition to Ind AS or cost of construction less accumulated depreciation and/or accumulated impairment
loss, if any. The cost of an item of property, plant and equipment comprises its purchase price, including
import duties and other non-refundable taxes or Levies and any directly attributable cost of bringing the
asset to its working condition for its intended use by the management; any trade discounts and rebates
are deducted in arriving at the purchase price. Borrowing costs directly attributable to the construction of a
qualifying asset are capitalised as part of the cost.

Property, plant and equipment under construction are disclosed as capital work-in-progress.

Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date
are disclosed under “Other non-current assets”

Assets value up to 5,000 are fully depreciated in the year of acquisition.

• Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will flow
to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is
derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognised
in the statement of profit and loss as incurred.

• Disposal

An item of property, plant and equipment is derecognized upon disposal or when no future benefits
are expected from its use or disposal. Gains and losses on disposal of an item of property, plant and
equipment are determined by comparing the proceeds from disposal with the carrying amount of
property, plant and equipment, and are recognised net within other income/expenses in the statement
of profit and loss.

• Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount
substituted for cost, less its residual value. Depreciation is provided on the “Written Down value” Method,
as per the useful life of assets prescribed in Part C of Schedule II of Companies Act, 2013 and as per
technical evaluation & management''s experience, except “Tools and Equipment” which is depreciated
using Straight Line Method (SLM).

Life of Dies and Moulds is taken as 8 years; Plant & Machinery and Solar plant is taken as 25 years & Tools &
Equipment is taken as 4 years based on technical evaluation.

Depreciation on addition to assets or sale/disposal of assets is calculated pro rata from the date of put to
use or up to the date of sale/disposal, as the case may be.

Depreciation is not calculated on capital work in progress until construction or installation is completed and
the asset is when it is in the location and condition necessary for it to be capable of operating in the manner
intended by management.

The useful lives of assets are reviewed by the management at each financial year end & revised, if appropriate.
In case of a revision, the unamortized depreciable amount is charged over the revised useful life of asset

NOTE 33.8. Intangible assets and amortization

• Recognition and measurement

Intangible assets are recognised when the it meets the definition of intangible asset and it is probable that
the future economic benefits that are attributable to the asset will flow to the Company and cost of the asset
can be reliably measured.

Intangible assets acquired by the Company that have finite useful lives are measured at cost less accumulated
amortisation and any accumulated impairment losses. Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually, either individually or at the cash-generating unit level.

• Subsequent measurement

Subsequent expenditure is capitalised only when its recognition only when such asset meets definition
of intangible asset and recognition criteria mentioned above.

• Amortization

Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less residual value
of Intangible assets, intangible assets consist of computer software is amortised over a period of three years,
and Rights are amortised over a period of 10 years, ATAS software is amortised over a period of 25 years.

NOTE 33.9. Revenue recognition

Revenue is recognized when (or as) a performance obligation is satisfied, at the transaction price. The company
uses 5 steps model given by Ind AS 115 i.e. identifying contract, identifying performance obligation, determination
of transaction price, allocation of transaction price over performance obligation and recognition of revenue when
performance obligation is satisfied. A company’s performance obligation is satisfied when it transfers control
over a good or service to a customer i.e. when goods/services are delivered/provided to the customer.

Revenue is measured at the transaction price i.e. Consideration to which a company expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of
third parties and after considering effect of variable consideration, significant financing component.

For contracts with multiple performance obligations, the transaction price is allocated to different obligations
based on their standalone selling price. In such case, revenue recognition criteria are applied for each separately
to different performance obligations, in order to reflect the substance of the transaction and revenue is recognised
separately for each obligation as and when the recognition criteria for the component is fulfilled.

For contracts that permit the customer to return an item, revenue is recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Amounts
included in revenue are net of returns, trade allowances, rebates, goods and service tax.

Trade receivables that do not contain a significant financing component (determined in accordance with Ind AS
115 Revenue from Contracts with Customers) are initially measured at their transaction price.

Other income

Other income comprises of interest income, dividend income, foreign currency gain on financial assets and
liabilities, profit on sale of non-financial assets export benefits and fair value changes on financial instruments.

Dividend income is recognised when the Company’s right to receive the payment is established, which is in the
year when shareholders approve the dividend.

Interest income is recognised as it accrues in the statement of profit and loss, using the effective interest method.
Export benefits in the form of Duty Draw Back claims are recognised in the statement of profit and loss on the
date that the Company’s right to receive payment is established. The company presents interest income on
financial assets at Fair Value through Profit & Loss separately from fair value changes on financials assets.

NOTE 33.10. Finance costs

Finance costs comprise of interest expense on borrowings, and foreign currency loss on financial assets and
liabilities, bank charges and commission. Interest expenditure is recognised as it accrues in the statement of
profit and loss, using the effective interest method. Other finance cost is recognized as it accrues.

NOTE 33.11. Foreign currencies transactions

The financial statements are presented in INR, which is also the company’s functional currency.

Transactions and balances

Transactions in foreign currencies are initially recorded at functional currency spot rates at the date the transaction
first qualifies for recognition.

Monetary assets and Liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are
recognised in statement of profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are recognized using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the
gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or
loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

NOTE 33.12. Employee Benefits

Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the services, cost of bonus and short¬
term compensated absences, leave travel allowance etc. are recognized in the period in which the employee
renders the related service.

Post-Employment Benefits

Defined Contribution Plans

The Company has state governed provident fund scheme and employee state insurance scheme as defined
contribution plans. The contribution paid/payable under the scheme is recognized during the period in which
the employee renders the related service.

Defined Benefit Plans

The employees'' gratuity fund scheme is the Company’s defined benefit plan. The present value of the obligation
under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit
Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement
and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used
for determining the present value of the 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.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet
with a corresponding debit or credit to retained earnings through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods.

Gains or losses on the curtailment or settlement of any defined benefit plan are recognized when the curtailment
or settlement occurs. Past service cost is recognized as expenses on a straight-line basis over the average period
until the benefits become vested.Net interest is calculated by applying the discount rate to the net defined
benefit liability or asset.

Long Term Employee Benefit

The obligation for long term employee benefits such as long-term compensated absences is recognized in the
same manner as in the case of defined benefit plans as mentioned above.

Accumulated leaves that are expected to be utilized within the next 12 months are treated as short term employee
benefits.

NOTE 33.13. Income Taxes
Current income tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of tax laws enacted or substantially enacted at the end
of reporting period. Management periodically evaluates positions taken in tax returns with respect to situation
in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax authorities.

The offset of current tax assets and current tax liabilities if the company has a legally enforceable right to set off
the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.

Deferred tax

Deferred tax is provided using the balance sheet method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except:

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax 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 relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax
items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.

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Mar 31, 2024

NOTE 31. Corporate Information

Synergy Green Industries Limited (“the Company”) is a public limited Company incorporated in 2010, had listed on BSE & NSE. Company has its corporate office situated at 392, E ward, Shahupuri, Kolhapur-416001 and the works is situated at Kagal -Hatkanangale Five Star Industrial Area, Kolhapur-416216.

The Company is engaged in the business of foundry i.e., manufacturing of wind turbine casting and other large precision castings. The Company started as a green filed foundry project during 2011 and entered in commercial operation in June 2012.

NOTE 32. Statement of Compliance

The financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as “Ind AS”) prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, as amended from time to time and other relevant provisions of the Act.

NOTE 33. Material accounting policies

NOTE 33.1. Basis of preparation

The financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) as issued under the Companies (Indian Accounting Standards) Rules, 2015 (as amended till date)

The financial statements were authorized for issue by the Board of Directors as on 22nd May, 2024.

NOTE 33.2. Basis of measurement

The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be carried at fair value by Ind AS.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

NOTE 33.3. Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the company’s functional currency. All financial information is presented in INR rounded to the nearest Lakhs except share and per share data, unless otherwise stated.

Exchange differences are recognized in the Statement of Profit and Loss except to the extent, exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings, are capitalized as part of borrowing costs.

NOTE 33.4. Significant accounting judgments, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, current assets, non-current assets, current liabilities, noncurrent liabilities and disclosure of the contingent liabilities at the end of each reporting period. Although these estimates are based on management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying value of assets or liabilities in future periods.

This note provides an overview of the areas that involve a higher degree of judgment or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.

Critical estimates and judgments

The areas involving critical estimates or judgments are:

1. Estimation of defined benefit obligation - Refer note 36

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate; future salary increases and mortality rates, attrition rate etc. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables which tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on past historical average and future expectation of inflation rates.

Further details about gratuity obligations are given in Note 36.

2. Impairment - Refer no. 33.16

The Company estimates the value in use of the cash generating unit (CGU) based on future cash flows after considering current economic conditions and trends, estimated future operating results and growth rates and anticipated future economic and regulatory conditions. The estimated cash flows are developed using internal forecasts. The cash flows are discounted using a suitable discount rate in order to calculate the present value.

The impairment provisions for financial assets disclosed are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

3. Deferred tax assets are recognized for all deductible temporary differences including the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

4. Lease term - The company has applied provisions of Ind AS 116 effective 01st April, 2019. The said standard provides for certain recognition exemptions for short term leases as well as provides for certain criteria when the lease contracts are non-enforceable. The determination of lease term for the purpose of availing such exemptions and evaluation of such criteria for non-enforceability of a contract involves significant judgment.

Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is current when it is:

• Expected to be realised or intended to sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

a liability is current wnen:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

NOTE 33.5. Inventories

• Raw materials, components, stores and spares are valued at cost or net realizable value whichever is lower. Cost includes all cost of purchase and incidental expenses incurred in bringing the inventories to their present location and condition. Cost is ascertained using weighted average method.

• Work-in-process and finished goods are valued at cost or net realisable value whichever is lower. Cost includes direct

materials, labour costs and a proportion of manufacturing overheads i.e. cost of conversion. Variable production overheads are allocated to each unit of production on the basis of the actual use of the production facilities. Fixed overheads are allocated based on the normal operating capacity, or actual capacity if actual capacity approximates normal capacity.

• Materials-in-transit are valued at actual cost incurred up to the date of balance sheet.

• Net realizable 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.

• Runners and Risers are valued at replacement cost or net realisable value whichever is lower.

• The inventory of patterns purchased and held for sale is valued at lower of cost and net realizable value. The cost comprises

of all the costs of purchases and other costs incurred in bringing the inventories to their present location and condition

NOTE 33.6. Cash and short-term deposits

Cash and short-term deposits in the balance sheet comprise cash at banks and on hand and highly liquid short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

NOTE 33.7. Property, plant and equipment

• Recognition and measurement

The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the entity; and the cost of the item can be measured reliably. This recognition principle is applied to costs incurred initially to acquire an item of property, plant and equipment and also to costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognised in the statement of profit and loss as incurred. When a replacement occurs, the carrying value of the replaced part is de-recognised. Where an item of property, plant and equipment comprises major components having different useful lives, these components are accounted for as separate items.

Items of property, plant and equipment are measured at cost of acquisition or deemed cost applied on transition to Ind AS or cost of construction less accumulated depreciation and/or accumulated impairment loss, if any. The cost of an item of property, plant and equipment comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use by the management; any trade discounts and rebates are deducted in arriving at the purchase price. Borrowing costs directly attributable to the construction of a qualifying asset are capitalised as part of the cost.

Property, plant and equipment under construction are disclosed as capital work-in-progress.

Advances paid towards the acquisition of property, plant and equipment outstanding at each reporting date are disclosed under “Other non-current assets”.

Assets value up to 5,000 are fully depreciated in the year of acquisition.

• Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognised in the statement of profit and loss as incurred.

• Disposal

An item of property, plant and equipment is derecognized upon disposal or when no future benefits are expected from its use or disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within other income/expenses in the statement of profit and loss.

• Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is provided on the “Written Down value” Method, as per the useful life of assets prescribed in Part C of Schedule II of Companies Act, 2013, except “Tools and Equipment” which is depreciated using Straight Line Method (SLM).

Life of Dies and Moulds is taken as 8 years, Plant & Machinery is taken as 25 years & Tools & Equipment is taken as 4 years based on technical evaluation.

Depreciation on addition to assets or sale/disposal of assets is calculated pro rata from the date of put to use or up to the date of sale/disposal, as the case may be.

Depreciation is not calculated on capital work in progress until construction or installation is completed and the asset is when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

The useful lives of assets are reviewed by the management at each financial year end & revised, if appropriate. In case of a revision, the unamortized depreciable amount is charged over the revised useful life of asset

NOTE 33.8. Intangible assets and amortization

• Recognition and measurement

Intangible assets are recognised when the it meets the definition of intangible asset and it is probable that the future economic benefits that are attributable to the asset will flow to the Company and cost of the asset can be reliably measured.

Intangible assets acquired by the Company that have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses. Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level.

• Subsequent measurement

Subsequent expenditure is capitalised only when it recognition only when such asset meets definition of intangible asset and recognition criteria mentioned above.

• Amortization

Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its Intangible assets which consist of computer software is amortised over a period of three years and ATAS software is amortised over a period of 25 years.

NOTE 33.9. Revenue recognition

Revenue is recognized when (or as) a performance obligation is satisfied, at the transaction price. The company uses 5 steps model given by Ind AS 115 i.e. identifying contract, identifying performance obligation, determination of transaction price, allocation of transaction price over performance obligation and recognition of revenue when performance obligation is satisfied. A company’s performance obligation is satisfied when it transfers control over a good or service to a customer i.e. when goods/ services are delivered/provided to the customer.

Revenue is measured at the transaction price i.e. Consideration to which a company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties and after considering effect of variable consideration, significant financing component.

For contracts with multiple performance obligations, the transaction price is allocated to different obligations based on their standalone selling price. In such case, revenue recognition criteria are applied for each separately to different performance obligations, in order to reflect the substance of the transaction and revenue is recognised separately for each obligation as and when the recognition criteria for the component is fulfilled.

For contracts that permit the customer to return an item, revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Amounts included in revenue are net of returns, trade allowances, rebates, goods and service tax.

Trade receivables that do not contain a significant financing component (determined in accordance with Ind AS 115 Revenue from Contracts with Customers) are initially measured at their transaction price.

Other income

Other income comprises of interest income, dividend income, foreign currency gain on financial assets and liabilities, profit on sale of non-financial assets export benefits and fair value changes on financial instruments.

Dividend income is recognised when the Company’s right to receive the payment is established, which is in the year when shareholders approve the dividend.

Interest income is recognised as it accrues in the statement of profit and loss, using the effective interest method. Export benefits in the form of Duty Draw Back claims are recognised in the statement of profit and loss on the date that the Company’s right to receive payment is established. The company presents interest income on financial assets at Fair Value through Profit & Loss separately from fair value changes on financials assets.

NOTE 33.10. Finance costs

Finance costs comprise of interest expense on borrowings, and foreign currency loss on financial assets and liabilities, bank charges and commission. Interest expenditure are recognised as it accrues in the statement of profit and loss, using the effective interest method. Other finance cost is recognized as it accrues.

NOTE 33.11. Foreign currencies transactions

The financial statements are presented in INR, which is also the company’s functional currency.

Transactions and balances

Transactions in foreign currencies are initially recorded at functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in statement of profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are recognized using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

NOTE 33.12. Employee Benefits

Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the services, cost of bonus and short-term compensated absences, leave travel allowance etc. are recognized in the period in which the employee renders the related service.

Post-Employment Benefits

Defined Contribution Plans

The Company has state governed provident fund scheme and employee state insurance scheme as defined contribution plans. The contribution paid/payable under the scheme is recognized during the period in which the employee renders the related service.

Defined Benefit Plans

The employees’ gratuity fund scheme is the Company’s defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the 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.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Gains or losses on the curtailment or settlement of any defined benefit plan are recognized when the curtailment or settlement occurs. Past service cost is recognized as expenses on a straight-line basis over the average period until the benefits become vested.Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.

Long Term Employee Benefit

The obligation for long term employee benefits such as long-term compensated absences is recognized in the same manner as in the case of defined benefit plans as mentioned above.

Accumulated leaves that are expected to be utilized within the next 12 months are treated as short term employee benefits. NOTE 33.13. Income Taxes Current income tax

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of tax laws enacted or substantially enacted at the end of reporting period. Management periodically evaluates positions taken in tax returns with respect to situation in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

The offset of current tax assets and current tax liabilities if the company has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Deferred tax

Deferred tax is provided using the balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised

deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax 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 relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

NOTE 33.14. Provisions

A Provision is recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources is expected to settle the obligation, in respect of which a reliable estimate can be made.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liability is disclosed in case of:

a) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation.

b) present obligation arising from past events, when no reliable estimate is possible

c) a possible obligation arising from past events where the probability of outflow of resources is remote.

Contingent assets are neither recognized, nor disclosed except when an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

NOTE 33.15. Leases

Lease is a contract that provides to the customer (lessee) the right to use an asset for a period of time in exchange for consideration. A lessee is required to recognize assets and liabilities for all leases with a term that is greater than 12 months, unless the underlying asset is of low value, and to recognize depreciation of leased assets separately from interest on lease liabilities in the statement of Profit and Loss.

As a Lessee

Initial Measurement

Right to use asset

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right of-use asset shall comprise:

• the amount of the initial measurement of the lease liability

• any lease payments made at or before the commencement date, less any lease incentives received;

• any initial direct costs incurred by the lessee; and

• an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset the lease, unless those costs are incurred to produce inventories.

The lessee incurs the obligation for those costs either at the commencement date or as a consequence of having used the underlying asset during a particular period.

Lease liability

At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise the following payments:

• fixed payments (including in substance fixed payments), less any lease incentives receivable;

• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• amounts expected to be payable by the Company under residual value guarantees;

• the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

Subsequent measurement Right to use asset

Subsequently the Company measures the right-of-use asset at cost less any accumulated depreciation and any Accumulated impairment losses.

Lease Liability

Subsequently the Company measures the lease liability by:

• increasing the carrying amount to reflect interest on the lease liability at the interest rate implicit in the lease, if that rate can be readily determined or the Company’s incremental borrowing rate.

• reducing the carrying amount to reflect the lease payments made; and

• re-measuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

NOTE 33.16. Impairment of non-financial assets

The company assesses at each balance sheet date whether there is any indication that an asset or cash generating unit (CGU) may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. The recoverable amount is the higher of an asset’s or CGU’s net selling price or its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount and the reduction is treated as impairment loss and recognized in profit and loss account. If at any subsequent 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 recoverable amount subject to a maximum of depreciated historical cost and is accordingly reversed in the statement of profit and loss.

NOTE 33.17. Fair value measurement

The Company measures financial instruments at fair value if they are to be measured at fair value are accordance with Ind AS, such as investment at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability OR

• In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company’s management determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value.

External valuation experts are involved for valuation of significant assets and liabilities. The involvement of external valuation experts is decided upon annually by the management.

NOTE 33.18. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are immediately recognised in the statement of profit and loss. Trade Receivables that do not contain a significant financing component are measured at transaction price.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period. Company amortizes all transactions cost over period of financial instrument on straight line basis.

Financial assets

Cash and bank balances

Cash and bank balances consist of:

(i) Cash and cash equivalents - which includes cash on hand, deposits held at call with banks and other short-term deposits which are readily convertible into known amounts of cash, are subject to an insignificant risk of change in value and have original maturities of less than three months. These balances with banks are unrestricted for withdrawal and usage.

(ii) Other bank balances - which includes balances and deposits with banks that are restricted for withdrawal and usage. Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The Company in respect of certain equity investments (other than in subsidiaries, associates and joint ventures) which are not held for trading has made an irrevocable election to present in other comprehensive income subsequent changes in the fair value of such equity instruments. Such an election is made by the Company on an instrument-by-instrument basis at the time of initial recognition of such equity investments. These investments are held for medium or long-term purposes. The Company has chosen to designate these investments in equity instruments as fair value through other comprehensive income as the management believes this provides a more meaningful presentation for medium or long-term investments, than reflecting changes in fair value immediately in the statement of profit and loss.

Financial assets not measured at amortised cost or at fair value through other comprehensive income are carried at fair value through profit and loss.

Impairment of financial assets

Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through other comprehensive income.

Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

a. financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits etc.

b. financial assets that are debt instruments and are measured as at FVTOCI

c. Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115

d. Loan commitments which are not measured as at FVTPL

The company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables or contract revenue receivables.

The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.

De-recognition of financial assets

The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the assets and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a borrowing for the proceeds received.

Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant.

Interest bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other gains/(losses).

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

De-recognition of financial liabilities

The Company de-recognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire.

Derivative financial instruments

In the ordinary course of business, the Company uses certain derivative financial instruments to reduce business risks which arise from its exposure to foreign exchange and interest rate fluctuations. The instruments are confined principally to cross currency swaps. The instruments are employed as hedges of transactions included in the financial statements.

Derivatives are initially accounted for and measured at fair value on the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period.

Note: 33.19. 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 equities shares outstanding during the period as reduced by number of shares bought back, if any. The weighted average number of equities shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equities shares outstanding, without a corresponding change in resources.

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.

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Mar 31, 2018

NOTE A-1: SIGNIFICANT ACCOUNTING POLICIES

1 Property, Plant and Equipments And Intangible Assets:-

A) Tangible Assets And Intangible Assets:-

i) Tangible Assets are Carried at cost of acquisition or construction(Inclusive of freight, duties, taxes and expenses related to acquisition and installation and commissioning) less accumulated depreciation and impairment losses

ii) Intangible Assets are recorded at the consideration paid for acquisition.

B) Depreciation and Amortisation-

Tangible Assets:- Depreciation on Tangible Assets is provided on the “Written Down value” Method, as per the useful life of assets prescribed in Part C of Schedule II of Companies Act, 2013, except “Tools and Equipments” ) which has depreciated using Strieght Line Method (SLM). Life of Dies and Moulds is taken as 8 years, and life of Tools & Equipments is taken as 4 years based on technical evaluation.

b) Depreciation on addition to assets or sale/disposal of assets is calculated pro rata from the date put to use or up to the date of sale/disposal, as the case may be.

c) Intangible assets which consist of computer software is amortized over a period of three years.

2 Borrowing Cost:-

Borrowing costs that are attributable to acquisition, construction or erection of qualifying assets incurred during the period of acquisition or construction, are capitalized as part of the cost of the asset. Other borrowing costs are recognised as expenditure in the period in which they are incurred.

3 Impairment of Assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If an indication exists, the company estimates the asset’s recoverable amount. The recoverable amount is determined for an individual assets, unless the assets does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an assets exceeds its recoverable amount the assets is considered impaired and is written down to it’s recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset’s recoverable amount. A previously recognised impairment loss is changed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised.

4 Inventories

Raw material, Stores & Spares are valued at lower of cost or net realisable value. Cost includes cost of purchases

i) and incidental expenses incurred in bringing the inventories to their present locations and conditions. Cost is arrived at mainly on the basis of Weighted Average Method.

Work in Progress and Finished goods are valued at lower of cost or net realisable value. Cost includes direct

ii) material, labour cost and proportion of manufacturing overheads based on the normal operating capacity. Finished goods lying in the factory premises are valued inclusive of Excise duty.

iii) Runners and Risers are valued at replacement cost or net realisable value whichever is lower.

The inventory of patterns purchased and held for sale is valued at lower of cost and net realizable value. The

iv) cost comprises of all the costs of purchases and other costs incurred in bringing the inventories to their present location and condition.

5 Revenue recognition

Revenue from sale of goods is recognised on dispatch to customer. Sales value is inclusive of excise duty and

i) export benefit, if any, and net of sales tax, GST, sales returns.

Revenue in respect of export Incentives is recognized only when it is reasonably certain that the ultimate

ii) collection will be made.

6 Retirement Benefits.

Retirement benefits have been recognised in accordance with AS-15(Revised 2005) and accordingly,

i) liability for balance of leave as on the last date of the year is fully provided on actuarial basis;

ii) liability on account of retirement benefits such as provident fund are administered through separate funds. Contribution to provident fund are accounted for at respective specified rates; and

iii) Gratuity is accounted on the basis of actuarial valuation, Method of valuation of Gratuity adopted by Actuary is ‘Projected Unit Credit Method’.

7 Foreign Currency Transactions:-

All foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. The short term and long term monetary items are restated at the rate of exchange prevailing on the date of Balance Sheet. The exchange differences on settlement / restatement are adjusted to Profit and Loss Account.

8 Taxation:-

Provision for taxation is made on the basis of the taxable profits, computed for the current accounting period in accordance with the provisions of the Income Tax Act 1961. Deferred Tax resulting from timing difference between book profits and tax profits is accounted for at the applicable rate of tax to the extent timing differences are expected to crystallize, in the case of deferred tax liabilities with reasonable certainty and in case of deferred tax assets with virtual certainty that there would be adequate future taxable income against which deferred tax assets can be realized, applying the tax rates that have been substantively enacted by the Balance Sheet date.

9 Provisions & Contingencies:-

Necessary provisions are made for the present obligations that arise out of past events entailing future outflow of economic resources. Such provisions reflect best estimates based on available information.

However a disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

(i) Principal terms, security and repayment schedule of long term secured loans

Term Loan - I from Bank of Baroda (BOB) is obtained for construction of new factory building and purchase of imported as well as indigenous machinery. Hypothecation of plant & machineries, shed materials & equitable mortgage of factory land, building at Kagal location; and collateral charge over the current assets; Entire amount has been personally guaranteed, jointly and severally, by Managing Director, Jt. Managing Director and Corporate Guarantee by S.B.Reshellers Pvt. a’ Ltd., the holding company. Bank of Baroda had reviewed the term loan account of the Company and issued sanction letter on 16.03.2016. Accordingly, the loan is repayable in 18 quarterly instalments commencing from 30th June, 2017 out of which 17 instalments of Rs.1.21 Crores & Last instalment of Rs. 1.09 Crores which is falling due on 30 September 2021 subject to annual review.

Term Loan - II from Bank of Baroda (BOB) is obtained for construction of Administrative building and purchase of indigenous machinery & movable fixed assets. Hypothecation of plant & machineries, shed materials & equitable mortgage of factory land, building at Kagal location; and collateral charge over the current assets; Entire amount has been personally guaranteed, jointly and severally, by Managing Director, Jt. Managing Director and Corporate Guarantee by S.B.Reshellers Pvt.

b. Ltd., the holding company. Bank of Baroda had reviewed the term loan account of the Company and issued sanction letter on 16.03.2016. Accordingly, the loan is repayable in 17 quarterly instalments of Rs. 12 Lacs commencing from 30th June, 2017 & last instalment is falling due on 18 August 2021 subject to annual review.

Vehicle Loan from ICICI Bank Ltd. is secured by hypothecation of Vehicles, which is repayable in 60 monthly instalments and last instalment is falling due on

c. 1st March 2019._

Vehicle Loan from HDFC Bank Ltd. is secured by hypothecation of Vehicles, which is repayable in 60 monthly instalments and last instalment is falling due on

d.

7th October 2021.

e. Deposits are accepted from Directors, relatives of Directors and Companies and are repayable on maturity @ 12% p.a.interest.

(a) Principal terms, security and repayment schedule of short term borrowings

Cash Credit from Bankof Baroda is secured against Hypothecation of stock, book debts, current and future, and collateral security in nature of equitable mortgage of factory land and building and extended charge on Plant and Machineries of the Company. Entire amount has been personally guaranteed, jointly and severally, by Managing Director, Jt. Managing Director and Corporate Guarantee by S.B.Reshellers Pvt. Ltd., the holding company. The cash credit is repayable on demand and carries rate of interest at BR 2.50% p.a.

(b) There is no continuing default, as at the balance sheet date, in repayment of any of the above loans & interest thereon.