B. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
1. BASIS OF PREPARATION OF FINANCIAL SATEMENTS
The financial statements are prepared and presented under the historical cost convention and evaluated on a going-concern basis
using the accrual system of accounting in accordance with the accounting principles generally accepted in India (Indian GAAP)
and the requirements of the Companies Act, including the Accounting Standards as prescribed by the Companies (Accounting
Standards) Rules, 2014 as per section 133 of the Companies Act, 2013.
All amount disclosed in Financials Statement and notes have been rounded off to the nearest lakhs (except earnings per share) as per
the requirement of Schedule III, unless otherwise stated.
The financial statement of the company has been prepared in accordance with the Generally Accepted Accounting Principles in
India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 the Companies Act, 2013, read with
Rule 7 of the Companies Accounting Rules, 2014 and the relevant provisions of the Companies Act (“the 2013Act”), 2013. The
financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in
the preparation of the financial statements are consistent with those followedinthe previous year.
2. USE OF ESTIMATES
The preparation of financial statement in conformity with the GAAP requires estimates and assumption to be made that affect
the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. The estimates and assumptions used in the accompanying financial statement are based upon
management’s evaluation of the relevant facts and circumstances as on the date of financial statements. Actual results may differ
from the estimates used in preparing the accompanying financial statements. Difference between the actual result and estimates are
recognized in the year in which the results are known or materialized.
3. PROPERTY, PLANT & EQUIPMENT
Property, plant and equipment (PPE) are stated at their cost of acquisition or construction less accumulated depreciation. The
Company capitalizes all costs relating to the acquisition and installation of Fixed Assets.
Subsequent expenditure is capitalized only if it is probable that future economic benefits associated with the expenditure will flow
to the company.
4. DEPRECIATION
The Company computes depreciation for all tangible fixed assets using the straight-line method based on estimated useful lives after
retaining a residual value of 5% for all the assets. Depreciation is charged on a pro-rata basis from the date of installation till the
date the assets are sold or disposed. In view of management, the useful life of the tangible fixed assets is as per the life specified in
Schedule II of the Companies Act, 2013.
5. BORROWING COSTS
Borrowing cost includes interest, amortization of ancillary cost incurred in connection with the arrangement of borrowings and
exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest
cost.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing
costs are expensed in the period they occur.
6. INVENTORIES
Inventories comprise of Raw materials, work in progress and consumables, finished goods etc are valued at cost or net realizable
value, whichever is lower. ‘Cost’ comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventory
to the present location and condition. The cost of manufactured finished goods comprises materials, direct labour, other direct costs
and related production overhead as applicable. Net realizable value is the estimated selling price in the ordinary course of business
less the estimated costs of completion and the estimated costs necessary to make the sale.
7. CASH & CASH EQUIVALENTS
Cash and Cash Equivalents in the balance sheet include cash at bank, cash, cheque, draft on hand and demand deposits with an
original maturity ofless than three months, which are subject to an insignificant risks of changes in value.
8. CURRENT/NON CURRENT CLASSIFICATIONS
The Schedule III to the Act requires assets and liabilities to be classified as either Current or Non-current. An asset is classified as
current when it satisfies any of the following criteria:
a) it is expected to be realized in, or is intended for sale or consumption in, the entity’s normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is expected to be realized within twelve months after the balance sheet date; or
d) It is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve
months after the balance sheet date.
Current assets include the current portion of non-current financial assets. All other assets are classified as non-current.
A liability is classified as current when it satisfies any ofthe following criteria:
e) it is expected to be settled in, the entity’s normal operating cycle;
f) it is held primarily for the purpose of being traded;
g) it is due to be settled within twelve months after the balance sheet date; or
h) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the
balance sheet date.
Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.
OPERATING CYCLE
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.
9. REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be
reliably measured.
Sale of Goods
Revenue from, sale of goods is recognized in the statement of profit and loss account when the significant risk and reward of
ownership have been transferred to the buyer. The Company collects GTS on behalf of the government and, therefore, these are not
economic benefits flowing to the Company. Hence, they are excluded from revenue.
Other Income
Other income if any is recognized on accrual basis.
10. EMPLOYEE BENEFITS
Short Term Employee Benefits
The short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized as an
expense during the period when the employees render the services.
Post-Employment Benefits
Defined Contribution Plans
The company has no policy of encashment and accumulation of leave. Therefore, no provision of leave Encashment is made.
Company’s contribution to Provident Fund and other Funds for the year is accounted on accrual basis and charged to the Statement
ofProfit & Loss for the year.
Defined Benefits Plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such 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, mortality rates and future pension increases.
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 company has recognized the gratuity payable to the employees as defined benefit plans. The liability in respect of these benefits
is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived
from employees’ services
11. TAXATION
Tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and
deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the
period).
Current tax
Provision for income tax is recognized based on estimated tax liability computed after adjusting for allowances, disallowances and
exemptions in accordance with the Income Tax Act, 1961.
Deferred taxation
The deferred tax charge or credit and the corresponding deferred tax liabilities and assets are recognized using the tax rates that
have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent there
is reasonable certainty that the asset can be realized in future; however, where there is unabsorbed depreciation or carried forward
loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of the assets. Deferred
tax assets are reviewed at each balance sheet date and written down or written-up to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realized.
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