1. Basis of Preparation and Presentation of Financial Statements -
The financial statements are prepared on accrual basis under the historical cost convention,
except for certain fixed assets which are carried at revalued amounts.
2. Use of Estimates -
The preparation of financial statement is in conformity with the generally accepted accounting
principles those requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosure of contingent liabilities at the date of
the financial statements and the reported amount of revenues and expenditures during the
reporting year. Difference between the actual result and estimates are recognized in the year in
which the results are known / materialized. The management believes that the estimates used
in preparation of financial statements are prudent and reasonable.
3. Fixed Assets -
3.01 Tangible Assets :
Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and
includes amount added on revaluation, less accumulated depreciation and impairment loss.
The cost of Tangible Assets comprises cost of acquisition and other incidental expenses
related to acquisition and installation. Insurance and Direct expenses during construction
period are capitalised, if appropriate, on pro-rata basis.
Subsequent expenditures related to an item of Tangible Assets are added to its book value
only if they increase the future benefits from the existing assets beyond its previously
assessed standard of performance.
Projects under which assets are not ready for their intended use are disclosed under Capital
Work in Progress.
3.02 Depreciation on Fixed Assets except freehold land is provided to the extent of depreciable
amount on the Written Down Value method. Depreciation is provided based on useful life
of the Assets as prescribed in Schedule II to the Companies Act, 2013 except in respect of
those Assets where useful life as estimated by the Board of Directors is different than those
prescribed in Schedule II to the Companies Act. 2013. In respect of those assets where useful
life has not been prescribed in Schedule II of the Companies Act, the useful life as estimated
by the Board of Directors is considered for the calculation of Depreciation.
4. Borrowings Costs -
Borrowing cost 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 is capitalized as part of
the cost of that assets. Other costs are charged to Profit and Loss Account.
5. Investments -
5.01 Non Current investment are stated at cost. Provision for diminution in the value of non current
investments is made only if such a decline is other than temporary.
5.02 Current investments are carried at the lower of cost and fair value determined by category of
the particular investment.
6. Revenue Recognition -
Revenue from sales effected directly, is recognised on issue of invoices (on delivery of goods)
except sales on consignment.
7. Employee Benefits -
a) The liability for the Gratuity and Superannuation Fund is not provided in the Accounts.
b) As informed by the management, the liability for the Gratuity and Superannuation Fund
are adhoc benefits and hence will be accounted for on pay-as-you-go basis as per
Accounting Standard 15.
8. Taxes on Income -
a) Current Income Tax is determined in respect of relative taxable amount for the period.
b) Deferred tax is recognised, subject to the consideration of prudence, on timing
differences, being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more subsequent period.
Deferred tax assets are not recognised on unabsorbed depreciation and carry forward of
losses, unless there is virtual certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realised.
c) Company’s normal tax liabilities are more than the liability calculated under the MAT
and hence no occasion for recognizing the credit of Mat liabilities.
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