2. SIGNIFICANT ACCOUNTING POLICIES
a. Property, Plant and Equipment:
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Cost comprises of purchase price inclusive of taxes,
commissioning expenses, etc., up to the date the asset is ready for its intended use. Fixed
assets which were revalued are carried at revalued values. Expenditure directly related to
expansion projects has been capitalized.
Cost includes non-refundable taxes, duties, freight, borrowing costs and other incidental
expenses related to the acquisition and installation of the respective assets.
Assets under installation or under construction as at the Balance Sheet date are shown in
Capital work-in-progress. Advances paid towards acquisition of assets are shown in Capital
Advances.
Fixed assets which are found to be not usable or retired from active use of when no further
benefits are expected from their use are removed from the books of account and the
difference if any, between the cost of such assets and the accumulated depreciation there on
is charged to Statement of Profit & Loss.
Depreciation on tangible assets is provided under Straight Line Method over the useful lives
of assets estimated by the Management. Depreciation on additions/ deletions during a period
is charged on pro rata basis from the date of addition or deletion, as the case may be.
b. Impairment of Assets:
In accordance with Ind AS 36, the Company assesses at each Balance Sheet date whether there is
any indication that an asset may be impaired. An asset is treated as impaired when the carrying
cost exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and
Loss in the year in which an asset is identified as impaired. The impairment loss recognized in a
prior accounting period is reversed if there has been a change in the estimate of recoverable
amount.
c. Employee Benefits:
Retirement benefits to employees comprise payments under Defined Contribution Plans like
Provident Fund and payments under Defined Benefit Schemes like Gratuity and Leave
encashment.
Payments under defined contribution plans are charged to revenue on accrual.
Short-term employee benefits such as wages, salaries and short-term compensated allowances
like bonus and other non-monetary benefits are provided for as per Company's Rules on best
estimate basis.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the net defined benefit liability and the return on
plan assets (excluding amounts include in net interest on the net defined benefit liability), are
recognized immediately in the Balance Sheet with a corresponding debit or credit to retained
earnings through OCI in the period in which they occur. Re-measurements are not reclassified to
profit or loss in subsequent periods.
d. Valuation of Inventories:
a) Stocks of consumables are valued at cost.
b) Project work in progress is valued with reference to the actual cost incurred for the
work performed up to the reporting date bear estimated total project cost of each
project.
e. Investments:
Investments intended to be held for more than one year are treated as long term and others as
short term. Short-term investments are carried at the lower of cost or quoted / fair value,
computed category wise and long-term investments are stated at cost. Provision for diminution
in the value of long-term investments is made only if such a decline is other than temporary.
f. Prior period expenses / Income:
The Company follows the practice of making adjustments through "expenses/income
under/over provided" in previous years in respect of material transactions pertaining to that
period prior to the current accounting year.
g. Government Grants:
Government grants available to the Company are recognized when there is a reasonable
assurance that the conditions attached to the grant will be complied with and reasonably certain
that grants will be received.
h. Tax Expenses:
Tax expense for the period comprises current tax and deferred tax. Tax is recognised in the
Statement of Profit and Loss except to the extent that it relates to items recognised in the
comprehensive income or in equity. In which case, the tax is also recognised in other
comprehensive income or equity.
> Current tax
Current tax assets and liabilities are measured at the amounts expected to be recovered
from or paid to the taxation authorities, based on the tax rates and laws that are enacted
or substantively enacted at the Balance sheet date.
> Deferred tax
Deferred tax is recognised on temporary differences between the carrying amount of
assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply
in the period in which the liability is settled or the asset realized, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the end of the reporting
period. The carrying amount of deferred tax liabilities and assets are reviewed at the end
of each reporting period.
i . Foreign Exchange Transactions:
Transactions denominated in foreign currency are accounted for initially at the exchange rate
prevailing on the date of transaction. Foreign Currency monetary Assets and Liabilities are
translated at year end exchange rates. Fluctuations, if any due to change in exchange rates
Between the dates of transactions and the dates of crystallization are debited / credited to
Statement of Profit & Loss.
j. Revenue Recognition:
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. The following specific recognition criteria
must also be met before revenue is recognized:
Revenue from sale of Goods
Sales are recognized net of returns and trade discounts, on transfer of significant risks and
rewards of ownership to the buyer, which generally coincides with the delivery of goods to
customers.
Revenue from sale of Services
Revenue from software-related services is accounted for on the basis of services rendered
as per the terms of contract.
Revenue from BPO services is based on the performance of specific criteria at contracted
rates.
Interest
Interest income is recognized on a time proportion basis taking into account the amount
outstanding and the applicable interest rate. Interest income is included under the head
"other income" in the statement of profit and loss.
Dividends
Dividend income is recognized when the Company's right to receive dividends is established
by the reporting date.
k. Borrowing Costs:
Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized
as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial
period of time to get ready for intended use. All other borrowing costs are charged to revenue.
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