I (b) Significant Accounting Policies
1 Basis of Preparation
The Financial Statements have been
prepared in accordance with Indian
Generally Accepted Accounting
Principles (IGAAP) under historical
cost convention on the accrual
basis. GAAP comprises mandatory
accounting standards prescribed
by the Companies (Accounting
Standards) Rules, 2021.
2 Revenue Recognition
Revenue is recognized only when risks
and rewards incidental to ownership
are transferred to the customer,
it can be reliably measured and it
is reasonable to expect ultimate
collection. Revenue from operations
includes sale of goods, services, service
tax, excise duty, and sales during trail
run period, adjusted for discounts
(net), and gain/loss on corresponding
hedge contracts.
The following other revenues are
recognized and accounted on their
accrual with necessary provisions for
all known liabilities and losses as per
AS 9.
Interest Income : Revenue is
recognized on the time proportion
basis after taking into account the
amount outstanding and the rate
applicable.
Other Income : Other items of income
and expenditure are recognized on
accrual basis and as a going concern
basis, and the accounting policies
are consistent with the generally
accepted accounting policies.
Export benefits are recognised on
post shipment basis under prevalent
schemes under exim/foreign trade
policies
3 Property Plant and Equipment
Including Intangible Assets
Property Plant and Equipment's
are stated at cost, less accumulated
depreciation. Cost includes cost of
acquisition including material cost,
freight, installation cost, duties and
taxes, and other incidental expenses,
incurred up to the installation stage,
related to such acquisition. Property
Plant and Equipment's purchased in
India in foreign currency are recorded
in Rupees, converted at the exchange
rate prevailed on the date of purchase.
Intangible assets that are acquired by
the Company are measured initially
at cost. After initial recognition, an
intangible asset is carried at its cost
less any accumulated amortisation
and any accumulated impairment
loss. Subsequent expenditure if any,
is capitalized if it increases the future
economic benefits.
4 Depreciation & Amortisation
The Company has applied the
estimated useful lives as specified
in Schedule II of the Companies Act
2013 and calculated the depreciation
as per the Straight Line Value (SLV)
method. Depreciation on new assets
acquired during the year is provided
at the rates applicable from the
date of acquisition to the end of the
financial year. In respect of the assets
sold during the year, depreciation
is provided from the beginning of
the year till the date of its disposal.
Leasehold land is amortized over the
Lease period of the asset.
5 Impairment of Assets
The Management periodically
assesses using, external and internal
sources, whether there is an indication
that an asset may be impaired.
An impairment loss is recognised
wherever the carrying value of an
asset exceeds its recoverable amount.
The recoverable amount is higher of
the asset's net selling price and value
in use, which means the present value
of future cash flows expected to arise
from the continuing use of the asset
and its eventual disposal. Reversal
of impairment loss is recognised
immediately as income in the profit
and loss account.
6 Use of Estimates
The preparation of the financial
statements in conformity with
Generally Accepted Accounting
Principles requires the Management
to make estimates and assumptions
that affect the reported balances of
assets and liabilities and disclosures
relating to contingent assets and
liabilities as at the date of the financial
statements and the reported amounts
of income and expenses during the
year. Examples of such estimates
include provisions for doubtful debts,
income taxes, post - sales customer
support and the useful lives of
Property Plant and Equipments and
intangible assets.
7 Foreign Currency Transactions:
Domestic Operation
I . Initial Recognition
A foreign currency transactions are
recorded, on initial recognition in
the reporting currency, by applying
to the foreign currency amount the
exchange rate between the reporting
currency and the foreign currency at
the date of the transaction.
II . Measurement
Foreign currency monetary items are
reported using the closing rate.
Non-monetary items which are
carried in terms of historical cost
denominated in a foreign currency
are reported using the exchange rate
at the date of the transaction
Non-monetary items which are
carried at fair value or other similar
valuation denominated in a foreign
currency are reported using the
exchange rates that existed when the
values were determined.
III . Treatment of Foreign Exchange
Exchange differences arising
on settlement / restatement of
foreign currency monetary assets
and liabilities of the Company are
recognised as income or expenses in
the Statement of Profit and Loss.
8 Employee Benefits
Defined Contribution Plan
The Company provides for ESI, PF
and Super annuation Plan for eligible
employees for which the company
makes contribution on monthly basis
and the same is charged to profit and
loss Account.
Defined Benefit Plan
The Company provides for Gratuity,
a Defined benefit plan (The Grauity
Plan) covering eligible employees
in accordance with payment of
Gratuity Act, 1972. Gratuity liability
is a defined benefit obligation and
is funded through LIC of India. The
Company accounts for liability for
future gratuity benefits based on the
actuarial valuation using Projected
Unit Credit Method carried out as at
the end of each financial year. The
expenditure is passed to Profit and
Loss account
9 Taxes on Income
Income Tax expense is accounted for
in accordance with AS-22 “Accounting
for Taxes on Income" for both Current
Tax and Deferred Tax stated below:
A. Current Tax
Provision for current tax is made in
accordance with the provisions of
the Income Tax Act, 1961. As per the
provisions applicable, MAT Assets are
not recognised.
B. Deferred Tax
Deferred tax is recognised, subject
to the consideration of prudence, as
the tax effect of timing difference
between the taxable income and
accounting income computed for
the current accounting year using the
tax rates and tax laws that have been
enacted or substantially enacted by
the balance sheet date.
Deferred tax assets are recognised
and carried forward to the extent that
there is a reasonable certainty, except
arising from unabsorbed depreciation
and carried forward losses, that
sufficient future taxable income
will be available against which such
deferred tax assets can be realised.
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