Note 1 : Significant Accounting Policies
(a) Basis of accounting
The financial statements are prepared under historical cost convention, on accrual basis in accordance with generally accepted accounting principles in India, the applicable accounting standards notified by the Companies Act, 2013.
(b) Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and the results of operations during the reporting periods. Although these estimates are based upon management's knowledge of current events and actions, actual results could differ from those estimates. Revisions, if any, in the accounting estimates are recognized in the current and future periods.
(c) Inventories
Raw materials, stores, spares, loose tools, consumables (including form work) and safety items are valued at lower of cost or net realizable value. The cost includes cost of purchase and other expenditure incurred in bringing inventory to the respective present condition and location. The cost is determined on the basis of weighted average method.
(d) Fixed assets
Tangible assets are stated at cost. Cost is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to the working condition for intended use and installation and is net of recoveries. Intangible Assets are recognized only if it is probable that future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably.
(e) Depreciation
Depreciation has been provided based on WDV method over the useful life of the assets in accordance with Part C Schedule II of the Companies Act, 2013.
(f) Retirement Benefits
All other short-term benefits for employees are recognized as an expense at the undiscounted amount in the Statement of Profit & Loss for the year in which the related service is rendered.
As per Accounting Standard -15 ( Employee Benefits) of the Institute of Chartered Accountants of India, the Company is required to assess gratuity liability each tear and make provision for Gratuity liability. However the Company has not made the provision for gratuity liability on the basis that the company has not completed five years since incorporation.
(g) Provisions and contingent liabilities
A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may,but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation inrespect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
(h) Miscellaneous Expenses
Share Issue Expenses are written off over a period of five years.
(i) Investments
Investment represents fixed deposit with bank which is long term in nature and are stated at face value and accrued interest upto reporting date.
(j) Impairment of Assets
An Impairment loss is recognized whenever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the net selling price of an assets for which it can be sold in the ordinary course of business. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.
(k) Borrowing Cost
Borrowing costs, if any, include interest, ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and charged to statement of Profit & Loss.
(I) Provision For Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. _
Deferred tax resulting from "timing difference" between book and for using the tax rates and laws that have been enacted or substantively enacted as on the tax asset is recognized and carried forward only to the extent that there is a reasonable certainty assets realized in future. ,
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