B Material accounting policies
This note provides a list of the material accounting policies adopted in the preparation of these Indian Accounting
Standards (Ind-AS) financial statements. These policies have been consistently applied to all the years.
1 Statement of compliance and basis of preparation
These financial statements of the Company have been prepared in accordance with Indian Accounting Standards
(Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time)
and presentation and disclosure requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS
compliant Schedule III) as amended. These standalone financial statements are presented in INR and all values
are rounded to the nearest hundreds (INR 00), except when otherwise indicated. The Company has prepared the
financial statements on the basis that it will continue to operate as a going concern.
The financial statements have been prepared on a historical cost basis unless otherwise indicated.
2 Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An
asset is treated as current when it is:
Expected to be realised or intended to be sold or consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after the reporting period, or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period
Current assets/liabilities include current portion of non-current financial assets/liabilities respectively. All other
assets/ liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets
and liabilities.
3 Use of Estimates and judgment
Preparation of Financial Statements in conformity with Ind-AS requires management to make judgment, estimation
and assumptions that affect application of accounting policy and reporting amount of assets, liabilities, disclosure
of contingent assets and liabilities at reporting date of financial statements and the reported amount of profit and
Loss account. Example of such estimates includes useful life of property, plant and equipment, intangible assets,
provision for doubtful debts, future obligation under employee's retirement benefit plans and contingent liabilities.
Actual results may differ with these estimates. Estimates and underlying assumptions are reviewed on periodic
basis. Future results could differ due to these estimates and the difference between actual results and estimates
are recognized in the period in which the results are known/materialized.
All Financial information furnished in Indian rupees and values are rounded to nearest in hundred with two decimal
points except where otherwise stated.
4 Revenue from Operation
a) the parties to the contract have approved the contract (in writing, orally or in accordance with other customary
business practices) and are committed to perform their respective obligations;
b) the company identifies each party's rights regarding the goods or services to be transferred;
c) the company identifies the payment terms for the goods or services to be transferred;
d) the contract has commercial substance (i.e., the risk, timing or amount of the company's future cash flows is
expected to change as a result of the contract); and
e) It is probable that the company will collect the consideration to which it will be entitled in exchange for the
goods or services that will be transferred to the customer. In evaluating whether collectability of an amount
of consideration is probable, a company shall consider only the customer's ability and intention to pay that
amount of consideration when it is due. The amount of consideration to which the company will be entitled
may be less than the price stated in the contract if the consideration is variable because the company may
offer the customer a price concession.
Interest Income
Interest Income is recognized using Effective Interest method as per IND-AS 109 when:
a) It is probable that economic benefits associated with the transaction will flow to the company; and
b) The amount of the revenue can be measured reliably;
Dividend Income
Dividend is recognized when the company's right to receive the payment has been established.
5 Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognized as transaction costs.
Borrowing Costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of
a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for
its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred.
Company capitalizes borrowing cost as part of the cost of a qualifying asset on the commencement date. The
commencement date for capitalization is the date when the company first meets all of the following condition
a) It incurs expenditure for the asset;
b) It incurs borrowing cost; and
c) It undertakes activities that are necessary to prepare the asset for its intended use or sale.
6 Income Tax
a) Provision for Taxation is made on the basis of the taxable profits computed for the current accounting year
(i.e., reporting year) in accordance with the Income Tax Act,1961.
b) Deferred Tax is recognized, subject to the consideration of prudence, on timing difference, being difference
between taxable income and accounting income/ expenditure that originate in one period and capable of
reversal in one or subsequent year(s). Deferred taxes are reviewed for their carrying value at each balance
sheet date.
Tax Rate: - Deferred Tax Rate is an enacted rate provided by the Income Tax Act 1961.
7 Employee Benefits
i) Short Term Employee Benefits: - Short Term Employee Benefits such as short-term compensated absences are
recognized as an expense on an undiscounted basis in the statement of Profit & Loss of the year in which the
related service is rendered.
(ii) Post-Employment Benefits & Other Long-Term Employee Benefits
Defined Contribution Plan
Provident Fund
Employees receive benefits from a provident fund, which is a defined contribution plan. Both the employee and
the company make monthly contribution to the regional Provident fund equal to specified percentage of eligible
employee's salary. The company has no further obligation under the plan beyond its monthly contributions.
Defined Benefits Plan
i) Gratuity
In accordance with the payment of Gratuity Act, 1972, the company provides for Gratuity a non-funded
defined retirement plan covering all employees. To Plan, Subject to provision of the Act, provides a lump
sum payment to vested employees at the retirement or termination of employment of an amount based on
respective employee's salary and the years of employment with the company. The company estimates its
liability on ad-hoc basis in the interim Financial Reports and on an actuarial valuation basis as at the end of the
year carried out an independent actuary, and it is charged to profit & loss account in accordance with IND-AS
109.
ii) Leave Benefit
Cost is a defined benefit, and is accrued on ad-hoc basis in the interim financial statement and on actuarial
valuation basis as at the end of the year carried out by an independent actuary, and is charged to Profit & Loss
account is accordance with IND AS-109.
8 Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical
cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the
acquisition of the fixed assets.
Cost of asset includes the following
(i) Cost directly attributable to the acquisition of the assets
(ii) Present value of the estimated costs of dismantling & removing the items & restoring the site on which it is
located if recognition criteria are met.
Subsequent costs are included in the asset's carrying amount only when it is probable that future economic
benefits associated with the item will flow to the company and the cost of the item can be measured reliably. All
other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value
Depreciation is provided for property, plant and equipment on Straight Line Method over their estimated useful
life of assets. The estimated useful lives, residual values and depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in estimates accounted for on a prospective basis.
The estimated useful lives are as mentioned below:
Category of Assets
Particulars Estimated Useful Life (years)
Freehold Building 30
Computer & Peripherals 3
Furniture & Fixtures 10
Office Equipment 5
Vehicles 8
Plant & Machinery 15
The residual values are not more than 5% of the original cost of the asset.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
profit or loss within other gains/(losses).
9 Intangible assets
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the
asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at
historical cost less accumulated amortization and impairment loss, if any. Amortization methods, useful life and
residual values are reviewed at each balance sheet date. Company has measured the useful life of intangible asset
is 3 years.
10 Inventories
(a) Raw Material are Valued according to weighted Average Cost method as prescribed for the valuation of inventory
at purchase cost or net realizable value whichever is lower. The quantity and valuation of Stock of Raw Material is
taken as Physical verified, valued and certified by management as at the end of the year.
(b) Finished Goods are valued at lower of the cost or Net realizable Value. Cost for the purpose is determined on
the basis of absorption costing method. The quality and valuation of finished goods is taken as physical verified,
valued and certified by management as at the end of the year.
(c) Stock of Work-In-Progress is valued at the cost of company. The quantity and valuation of inventory of work-in-
progress is taken as physical verified, valued and certified by management as at the end of the year.
11 Impairment of Non-Financial Assets
(i) The carrying amounts of the assets are reviewed at each balance sheet date to determine whether there is
any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For
assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date.
(ii) An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. Impairment losses are recognized in the Statement of profit & loss.
(iii) An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined net of depreciation or amortization, if no impairment
loss had been recognized.
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