2 Significant accounting policies and notes on accounts:
(a) Basis of Preparation of Financial Statements:
The financial statements of the Company have been prepared on accrual basis under the historical cost convention
& ongoing concern basis in accordance with Generally Accepted Accounting Principles in India ('Indian GAAP') to
comply with the Accounting Standards specified under Section 133 of U1e Companies Act, 2013 read with Rule 7
of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 20 I 3 ('the Act') / the
Companies Act, 1956, as applicable.
(b) Use of Estimates:
ThepreparationoffinancialstatementsisinconformitywithIndianGAAPrequiresthemanagementtomakeestimatesand
assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the
reported income and expenses during the period. The management believes that the estimates used in preparation
of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the
differences between the actual results and the estimates are recognized in the periods in which the results are known
/ materialize.
(c) Revenue Recognition:
All income and expenses to the extent considered recoverable/payable with reasonable certainty are
accounted for on accrual basis. Interest earned/accrued is recognized on a time proportion basis taking into account
the amount outstanding and applicable interest Rate. Interest Income is included under the head "other Income" in
the statement of Profit and Loss. Profit/Loss on sale of fixed assets is recorded on transfer of title from the company
and is computed on the basis of difference between net sale consideration and the written down value of the asset.
(d) Cash and Cash Equivalent:
Cash comprises cash in hand and demand deposits with banks. Cash equivalents are short-termbalances (with an original
maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into
known amounts of cash and which are subject to insignificant risk of changes in value.
(e) Property, Plant & Equipment and Intangible Assets:
Property, plant and equipment, capital work in progress are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if
capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent
expenditure related to an item of property, plant and equipment is added to its book value only if it
increases the future benefits from the existing asset beyond its previously assessed standard of performance.
All other expenses on existing plant, property and equipment, including day-to-day repair and maintenance
expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which
such expenses are incurred. Items of stores and spares that meet the definition of property, plant and equipment are
capitalized at cost and depreciated over their useful life.
(f) Depreciation/Impairment of Assets:
Depreciation on property, plant and equipment including stores and spares transferred from inventory is calculated on a
written down value basis using the rates arrived at, based on the useful lives estimated by the
management, which are equal to the useful lives prescribed under Schedule II to the Companies Act, 2013.
Depreciation on the amount of adjustment to property, plant and equipment on account of capitalization of insurance
spares and critical spares transferred from stores and spares is provided over the remaining useful lives of related assets.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate. To calculate depreciation on Fixed Assets, Tangible and
Intangible, in a manner that amortizes the cost of the assets is provided on the basis of written down value method at
the rates on the basis prescribed in Part C of the schedule II of the Companies Act, 2013.
(g) Impairment of Assets:
At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired.
If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset
exceeds its recoverable amount, an impairment loss is recognized in the statement of profit and loss to the extent the
carrying amount exceeds the recoverable amount.
(h) Inventory:
Company value its inventory on Cost or Net realizable Value, which ever is lower. Cost of inventories comprises of
purchase cost and other cost incurred in bringing inventories to their present location and condition
(i) Taxes on income:
Income taxes are accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Tax
expense comprises of both current and deferred tax. Deferred tax assets and liabilities are recognized, subject to
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 periods and are measured using
tax rates enacted or substantively enacted as at the Balance Sheet date. The carrying amount of deferred tax assets
and liabilities are reviewed at each Balance Sheet date. Deferred Tax Asset on carry forward losses and unabsorbed
depreciation, if any, are recognized when it is virtually certain that there will be future taxable profit.
(j) Employee Benefits:
(i) Short term employee benefits are recognized as an expense at the undiscounted amount in the Profit and loss account
of the period in which the related services is rendered.
(ii) Long Term Employee benefits are recognised as and expenses as per the valuation of Actuarial and other Professional
for the Period in which such expenses are related.
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