II Significant Accounting Policies
1 Basis of Preparation:
The Financial Statements have been prepared in accordance with Indian Generally Accepted Accounting
Principles (IGAAP) under historical cost convention on the accrual basis. GAAP comprises mandatory
accounting standards prescribed by the Companies (Accounting Standards) Rules, 2021.
2 Revenue Recognition:
Revenue is measured at the fair value of consideration received or receivable and represents amounts
receivable for goods and services provided in the normal course of business, net of discounts and other
sales-related taxes. Revenue is recognised once the performance obligation has been met. This is deemed
to be when the goods and services have been collected by, or delivered to, the customer in accordance with
the agreed delivery terms.
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 in accordance with AS-9, Revenue Recognition. Sales are
recognized on accrual basis, and only after transfer of services to the customer.
Interest Income : Revenue is recognized on the time proportion basis after taking into account the amount
outstanding and the rate applicable.
Other Income : Other items of income and expenditure are recognized on accrual basis and as a going
concern basis, and the accounting policies are consistent with the generally accepted accounting policies.
3 Property Plant and Equipment Including Intangible Assets:
Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of
acquisition including material cost, freight, installation cost, duties and taxes, and other incidental expenses,
incurred up to the installation stage, related to such acquisition. Property Plant and Equipments purchased
in India in foreign currency are recorded in Rupees, converted at the exchange rate prevailed on the date
of purchase. Intangible assets that are acquired by the Company are measured initially at cost. After initial
recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated
impairment loss.
Capital work-in-progress comprises property, plant, and equipment that are in the process of being made
ready for their intended use as of the balance sheet date. It includes special tools, materials, and ground
handling equipment acquired for operations under the dry lease model. As the dry lease operations
commenced during the year, the relevant assets have been transferred from Capital Work-in-Progress to
Plant and Machinery.
Capital work-in-progress represents property, plant and equipment that are not yet ready for their intended
use as at the balance sheet date. The Capital WIP includes special tools,materials and ground handling
equipments purchased for Dry lease mode of operation which is yet to commence. The operation of Dry
Lease commenced during the year. Hence the same been added to Plant & Machinery.
4 Depreciation & Amortisation:
The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and
calculated the depreciation as per the Straight Line Method (SLM). Where a significant component (in terms
of cost) of an asset has an economic useful life shorter than that of its corresponding assets, the component
is depreciated over its shorter life. Depreciation on new assets acquired during the year is provided on pro
rata basis from the date of such additions. Depreciation on asset sold, discarded or demolished during the
year is being provided upto the date in which such assets are sold, discarded or demolished. Depreciation
in respect of property / plant and equipment costing less than ' 5000/- is provided at 100%.
Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule
II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in
the statement of profit and loss. In respect of the assets sold during the year, amortisation is provided from
the beginning of the year till the date of its disposal.
5 Impairment of Assets:
The Management periodically assesses using, external and internal sources, whether there is an indication
that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset
exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and value
in use, which means the present value of future cash flows expected to arise from the continuing use of
the asset and its eventual disposal. Reversal of impairment loss is recognised immediately as income in the
profit and loss account.
6 Use of Estimates:
The preparation of the financial statements in conformity with Generally Accepted Accounting Principles
requires the Management to make estimates and assumptions that affect the reported balances of assets
and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial
statements and the reported amounts of income and expenses during the year. Examples of such estimates
include provisions for doubtful debts, income taxes, post - sales customer support and the useful lives of
Property Plant and Equipments and intangible assets.
7 Inventories:
Inventory of consumables/spares and loose tools are valued at lower of cost and net realisable value.
The cost is calculated at purchase price and expenditure directly attributable to the acquisition of such
inventories for bringing them to their present location.
8 Trade Recivables
Trade receivables are recognised when the Company has an unconditional right to receive consideration
in the ordinary course of business. These are stated at their carrying value, net of allowances for doubtful
debts, if any.
9 Foreign Currency Transactions:
Domestic Operation:
I . Initial Recognition :
A foreign currency transactions are recorded, on initial recognition in the reporting currency, by
applying to the foreign currency amount the exchange rate between the reporting currency and the
foreign currency at the date of the transaction.
II . Measurement :
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost denominated in a foreign currency
are reported using the exchange rate at the date of the transaction
Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign
currency are reported using the exchange rates that existed when the values were determined.
III . Treatment of Foreign Exchange :
Items included in the financial statements of the Company are measured using the currency of the
primary economic environment in which the entity operates ('the functional currency').The financial
statements are presented in Indian Rupee (INR), which is the Company's functional and presentation
currency. Foreign currency transactions are translated into functional currency using the exchange
rates at the date of the transactions. Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are generally recognised in statement of profit and loss.
IV. Presentation Currency:
The financial statements are presented in Indian Rupees (INR), which is the Company's functional and
presentation currency.
10 Employee Benefits:
A. Short - Term Employee Benefits:
Short-term employee benefits such as salaries, wages, bonus, ex-gratia, and leave encashment are
recognized as an expense in the Profit and Loss Account in the period in which the employee renders
the related service.
Leave Encashment:
The leave encashment liability upon retirement would not arise as the accumulated leave is reimbursed
every year and accounted at actual.
B. Post-Employment Benefits:
Defined Benefit Plan:
Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for
future gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried
out as at the end of each financial year.
Defined Contribution Plan:
Provident Fund: Eligible employees receive benefit from provident fund covered under the Provident
Fund Act. Both the employee and the company make monthly contributions. The employer contribution
is charged off to Profit & Loss Account as an expense.
11 Taxes on Income:
Income Tax expense is accounted for in accordance with AS-22 Accounting for Taxes on Income for both
Current Tax and Deferred Tax stated below:
A. Current Tax:
Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.
B. Deferred Tax:
Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing
difference between the taxable income and accounting income computed for the current accounting
year using the tax rates and tax laws that have been enacted or substantially enacted by the balance
sheet date.
Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty,
except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable
income will be available against which such deferred tax assets can be realised.
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