2 Significant Accounting Policies
i. Basis of Preparation of Financial Statements
The financial statements of the Company have been prepared and presented under the historical cost convention,on the
accrual basis of Accounting and comply with Generally Accepted Accounting Principles in India (Indian GAAP) including the
Accounting Standards notified under the relevant provisions of the Companies Act, 2013 to the extent applicable,as adopted
consistently by the company.
The Accounting policies adopted in the preparation of financial statements are consistent with those of the previous year
except stated specifically in the notes,if any.
ii. Revenue Recognition:
Revenue is recognized in accordance with the Guidance note on Accrual basis of Accounting issued by The Institute of
Chartered Accountants of India. Accordingly whereever there are uncertainties in the realisation of Income,the same is not
accounted for till such time the uncertainty is resolved.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can
be reliably measured. The following specific recognition criteria must also be met before the revenue be recognised.
(i) Sale of Goods / Services
Revenue from sale of goods / services is recognized when all the significant risks and rewards of ownership of the goods have
been passed to the buyer, usually on delivery of the goods. The company collects GST on behalf of the government and,
therefore, these are not economic benefits flowing to the Company. Hence they are excluded from revenue.
(ii) Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable
interest rate. Interest income is included under the head "other income" in the statement of profit and loss.
iii. Use of Estimates
The preparation of financial statements, in conformity with the Generally Accepted Accounting Principles [GAAP], requires
management to make estimates and assumptions that are considered in the reported amounts of assets and liabilities and
disclosures of contingent liabilities on the date of financial statements and reported amounts of revenues and expenses for the
year. The estimates and assumptions used in the Financial Statements are based upon Management's best evaluation of the
relevant facts and circumstances as of the date of the Financial Statements. The difference between the actual and estimate is
recognized in the period in which the result are known/materialized.
iv. Treatment of Expenses
All expenses are accounted for on accrual basis.
v. Property, Plant & Equipment and Intangible Assets
i. Property, Plant & Equipment :
Fixed Assets are stated at historical cost, less depreciation. Costs of fixed assets include taxes, duties, freight and other expense
incidental and related there to the construction, acquisition, and installation of respective assets.Fixed assets acquired and put
to use for the project purpose are capitalized and depreciation thereon is included in the project cost till commissioning of the
project.
Government Grants: Government grants are recognized at their fair value where there is a reasonable assurance that the grant
will be received and the Company will comply with all attached conditions.
Government grants are recognized in the Statement of Profit and Loss on a systematic basis over the periods in which the
Company recognizes the related costs for which the grants are intended to compensate. Government grants whose primary
condition is that the Company should purchase, construct or otherwise acquire non current are recognized as revenue in the
Profit and Loss Account
ii. Intangible Assets:
Intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion and
impairment losses, if any. The cost of intangible assets includes purchase price, borrowing cost, and any cost directly
attributable to bringing assets to its working condition for the intended use and other incidental expenses incurred up to that
date.
There are no Intangible Assets as on the Balance Sheet date.
iii. Capital work in progress:
Capital work in progress is stated at cost. Capital WIP includes the cost of fixed assets that are not yet ready for their intended
use, as on the balance sheet date.
vi. Inventories:
a. Finished Goods: Finished goods are value at cost of manufacturing or net realizable value, whichever is lower
b. Raw materials: Raw materials have been valued at lower of cost or net realisable value.
c. Work in Progress: Work in Progress is valued at total cost incurred upto the percentage completion of WIP or net
realizable value, whichever is lower.
vii. Classification of Assets & liabilities as Current and Non-Current:
All assets and liabilities are classified as current or non-current as per company's normal operating cycle and other criteria set
out in Schedule III to the Companies Act, 2013.
viii. Depreciation:
Depreciation is recognized in the statement of profit and loss on a WDV on pro-rata basis on each part of an item of property,
plant and equipment as prescribed in Schedule II of the Companies Act 2013 except Plant and Machinery installed during the
Previous Year
Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready
for its intended use.
ix. Investments:
Non current investments are stated at cost. Provision for diminution in value of Non current investment is made only if such a
decline is other than temporary.
There are no current and non current investments made by the company during relevant financial year.
x. Cash and cash equivalent:
Cash comprises cash in hand and demand deposits with banks and financial institutions at the year end. Cash equivalents
means short-term highly liquid investments that are readily convertible into known amounts of cash and which are subject to
an insignificant risk of changes in value.
xi. Taxes on Income:
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of
the Income Tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of
adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the company will pay
normal income tax. Accordingly, MAT is recognized as an asset in the Balance sheet when it is probable that future economic
benefit associated with it will flow to the Company.
The deferred tax for timing differences between the book profits and tax profits for the year is accounted for using the tax rates
and laws that have been enacted or substantially enacted as of the balance sheet date. Deferred tax assets arising from timing
differences are recognized to the extent there is a virtual certainty that these would be realized in future and are reviewed for
the appropriateness of their respective carrying values at each balance sheet date.
xii. Borrowing Cost:
Borrowing costs are interest and other costs that an entity incurs in connection with the borrowing of funds.
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized in the
cost of that asset. Qualifying assets are those assets which necessarily takes a substantial period of time to get ready for its
intended use. All other borrowing costs are recognised in the year in which they are incurred.
xiii. Foreign Currency Transactions:
Foreign Currency Transactions are recorded at the exchange rates prevailing on the date of transaction. Gains and Losses
arising out of subsequent fluctuations are accounted for on actual payment or realisation.
xiv. Earning Per Share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including) the post tax effect of extraordinary
items, if any by the weighted average number of equity shares outstanding during the year . Diluted earnings per share is
computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for
dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted
average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per
share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of
the period, unless they have been issued at a later date. The dilutive potential equity shares area adjusted for the proceeds
receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive
potential equity shares are determined independently for each period presented. The number of equity shares and potential
dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
xv. Employee Benefit Expenses:
Short-term employee benefits
All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee
benefits. Benefits such as salaries, wages, expected cost of bonus and short term compensated absences, leave travel allowance
etc. are recognised in the period in which the employee renders the related service.
Defined Benefit Plans
The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount
calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon
completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of
employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual
contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust
Fund.
Defined contribution plans
Company's contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement
benefit, medical reimbursement and leave payments to employees are recognise as employee benefit expense when they are
due.
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