2. SIGNIFICANT ACCOUNTING POLICIES:
2.1 Basis of preparation of Standalone Financial
Statements and Method of Accounting:
These standalone financial statements have been
prepared in accordance with the Generally
Accepted Accounting Principles in India (‘Indian
GAAP’) under the historical cost convention on the
accrual basis to comply with the Accounting
Standards (“AS”) specified under Section 133 of the
Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant
provisions of the Companies Act, 2013 and
guidelines issued by the Securities and Exchange
Board of India. The accounting policies adopted in
the preparation of the standalone financial
statements are consistent with those followed in the
previous year.
2.2 Use of estimates:
The preparation of standalone financial statements,
in conformity with the AS, requires the management to
make estimates, judgements and assumptions.
These estimates, judgements and assumptions
affectthe reported amounts of assets and liabilities,
disclosure of contingent amount as at the date of
standalone financial statements and reported
amounts of revenues and expenses during the
reporting period. Actual results could differ from
these estimates. Appropriate changes in estimates
are made as the Management becomes aware of
changes in circumstances surrounding the
estimates. Changes in estimates are reflected in the
standalone financial statements in the period in
which changes are made and, if material, their
effects are disclosed in the notes to the Standalone
financial statements.
2.3 Accounting Assumptions:
(i) Going Concern:
The enterprise is normally viewed as a going
concern, that is, as continuing in operation for
the foreseeable future. It is assumed that the
enterprise has neither the intention nor the
necessity of liquidation or of curtailing materially
the scale of the operations.
(ii) Consistency:
It is assumed that accounting policies are
consistent from one period to another.
(iii) Accrual:
Revenues and costs are accrued, that is,
recognized as they are earned or incurred (and
not as money is received or paid) and recorded
in the standalone financial statements of the
periods to which they relate. (The considerations
affecting the process of matching costs with
revenues under the accrual assumption are not
dealt with in this Statement.)
2.4 Valuation of Inventories:
Inventories are valued at the lower of cost (on FIFO
basis) and the net realizable value after providing for
obsolescence and other losses, where considered
necessary. Cost includes all charges in bringing the
goods tothe point of sale, including octroi and other
levies, transit insurance and receiving charges.
2.5 Property, Plant and Equipment:
Property, plant and equipment are carried at cost
less accumulated depreciation and impairment
losses, if any. The cost includes interest on
borrowings attributable to acquisition of qualifying
assets up to the date the asset is ready for its
intended use and other incidental expenses
incurred up to that date. Depreciation on fixed
assets and intangible assets is provided on Written
Down Method on the basis of useful life of assets as
prescribed in Schedule II to the Companies Act,
2013 after considering estimated residual value.
2.6 Depreciation & Amortization:
Depreciation on Fixed Asset is provided on all
depreciable fixed assets based on remaining useful
life is provided to the extent of depreciable amount
on the Written Down Value (WDV) Method.
Depreciation is provided based on useful life of the
assets as prescribed in Schedule II to the Companies
Act, 2013.
2.7 Impairment:
In terms of As-28 “Impairment of assets” issued by
ICAI, the Company reviews the carrying amount of its
fixed assets on each Balance sheet date for the
purpose of ascertaining impairment in assets, if any.
On such review, there is no indication of impairment
of assets during the year.
2.8 Revenue Recognition:
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.
Sales exclude Sales tax and value added tax.
Sale of Services:
Revenues from contracts priced on a time and
material basis are recognized when services are
rendered and related costs are incurred. Revenues
from maintenance contracts are recognized on
raising of Invoice. Sales exclude GST.
Other Operating Incomes:
Net Sales Incentive are accounted for in the year of
the respective sales based on eligibility and when
there isno uncertainty in receiving the same.
Other Income:
All other income is accounted on accrual basis when
no significant uncertainty exists regarding the
amount that will be received.
2.9 Earnings per Share:
Basic earnings per share is computed by dividing the
profit / (loss) after tax (including the post-tax effect
of extraordinary items, if any) by the weighted
average number of equity shares outstanding during
the year. Forcomputing diluted earnings per share,
potential equity shares are added to the above
weighted average number of shares.
2.10 Taxes on Income:
Current tax is the amount of tax payable on the
taxable income for the year as determined in
accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (“MAT”) paid in accordance
with the tax laws, which gives future economic
benefits inthe form of adjustment to future income
tax liability, is considered as an asset if there is
convincing evidence that the Company will pay
normal income tax. Accordingly, MAT is recognized
as an asset in the Balance Sheetwhen it is probable
that future economic benefit associated with it will
flow to the Company.
Deferred tax Liability is recognized on timing
differences between the accounting income & the
taxable income for the year and quantified using the
tax rates and laws enacted or substantively enacted
as on the balance sheet date.
Deferred tax assets are recognized and carried
forward to the extent that there is reasonable
certainty that sufficient future taxable income will be
available against which such deferred tax assets can
be realized.
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