A) Significant Accounting Policies:
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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