NOTE : II SIGNIFICANT ACCOUNTING POLICIES
2.1) Basis of preparation of Financial Statements
i) Statement of Compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind-AS)
under historical cost convention on the accrual basis, the provisions of the Companies Act 2013 (the Act)
(to the extent notified) and guidelines issued by Securities and Exchange Board of India (SEBI). The Ind
As prescribed under Section 133 of the Act 2013 read with rule 3 of the Companies (Indian Accounting
Standards) Rules 2015 and relevant amendment rules issued thereafter.
ii) Basis of Preparation
Effective from 1 April 2017, the Company has adopted all the Ind AS standards and the adoption was carried out
in accordance with Ind-AS 101, “First Time Adoption of Indian Accounting Standards, with 1 April 2016 as the
transition date. The transition was carried out from Indian Accounting principles generally accepted in India as
prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP),
which was the previous GAAP.
Accounting policies have been consistently applied except where a newly accounting standard is initially adopted
or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
iii) Classification of Assets and liabilities as Current and Non-Current.
All assets and liabilities have been classified as current or non-current as per the Company's normal
operating cycle and other criteria set out in the Revised Schedule III to the Companies Act, 2013. Based
on the nature of services and the time between the acquisition of assets for processing and their realization
in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the
purpose of current/ non-current classification of its assets and liabilities.
2.2) Use of Estimates
The preparation of financial statements, in conformity with Ind-AS require estimates and assumptions to be
made by management, that may affect the reported amount of assets and liabilities as on the date of the financial
statements and the reported amount of revenues and expenses during the reporting period. Changes in the
estimates are reflected in the financial statements in the period changes are made, and if material their effects
are disclosed in the notes to the financial statements.
2.3) Property, Plant and Equipment and Depreciation
Under the Indian GAAP, Property, plant and equipment were carried in the balance sheet on historical cost. The
company has elected to regard those values as deemed cost under Ind-AS as on transition date i.e.1st April 2016.
All tangible fixed assets are stated at cost less accumulated depreciation. Cost includes freight, duties, taxes and
other expenses directly incidental to acquisition, bringing the asset to the location and installation including site
restoration up to the time when the asset is ready for intended use. Such Costs also include Borrowing Cost if the
recognition criteria are met. When a major inspection/repair occurs, its cost is recognized in the carrying amount
of the plant and equipment as a replacement if the recognition criteria are satisfied.
As per the provision of IND AS-16, major spare parts, stand-by equipment and servicing equipment qualify as
property, plant and equipment when an entity expects to use them during more than one period and the company
has elected to do the same.
In view of the fact that the financial statements have not been prepared on a going concern basis, no depreciation
has been charged on tangible fixed assets.
2.4) Inventories
There are no inventories during the current financial year.
2.5) Foreign Exchange Transaction
There are no foreign exchange transactions during the financial year.
2.6) Investments
(a) Classification
The company classifies its financial assets in the following measurement categories:
• Those to be measured subsequently at fair value (either through other comprehensive income, or through
profit & loss) and
• Those measured at amortized cost
The classification depends upon the entity's business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses arising from fair valuation will either be recorded in profit
and loss or other comprehensive income. For investments in equity instruments, this will depend on whether
the company has made any irrevocable election at the time of initial recognition to account for the equity
investment for fair value through other comprehensive income.
(b) Measurement
The company measures a financial asset at its fair value and in the case of financial assets not at fair value
through profit and loss, at fair value including transaction cost that is directly attributable to the acquisition
of the financial asset. Transaction cost of financial assets carried at fair value through profit and loss is
expensed in profit or loss.
2.7) Employees Benefits
(a) Short Term Obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly with
in 12 months after the end of the period in which the employees render the related service are recognized
in respect of employees' services up to the end of the financial reporting period and are measured at the
amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
(b) Post Employment obligations
The company operates the following post-employment schemes benefit plan such as gratuity.
2.8) Borrowing Costs
To capitalize the borrowing costs that is directly attributable to the acquisition or Construction of that Capital
asset. Other borrowing costs are recognized as an expense in the year in which they are incurred.
2.9) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are inclusive of Excise duty. Revenue is recognized net of returns, trade allowances, rebates, and value added
taxes and net of amount collected on behalf of the third parties.
Revenue from Goods
There is no revenue from goods during the current financial year.
Revenue from Services
Revenue from services is recognized in proportion to the stage of completion of transaction at the end of
reporting period, and cost incurred in the transaction including same to complete the transaction and revenue
(representing economic benefit associated with the transaction) can be measured reliably.
Interest
Interest income is recognized on a time proportion basis (accrual basis) taking into account the amount
outstanding and the rate applicable.
Bad Debts Recovered
Bad debts amounting to Rs. 3.98 Crores, earlier written off, have been recovered during the current financial year.
A provision against doubtful debtors for Rs. 34.88 Lakhs has been written back considering the recoverability of
such debtors.
2.10) Taxes on Income
Provision for taxation has been made on the basis of taxable profits computed in accordance with the
provisions of the Income Tax Act, 1961. Deferred tax arising due to timing differences between accounting
income and taxable income is computed at the applicable tax rates. However, Deferred Tax Liabilities and
Deferred Tax Assets have not been recognized, in the absence of reasonable certainty and virtual certainty
respectively, supported by convincing evidence, that sufficient future taxable income will be available against
which such timing differences can be realized.
2.11) Impairment of Assets
As at 31st March 2025 the company has reviewed the future earning of its cash generating unit in accordance
with Ind AS 109. As per the Company's said review the carrying amount of the assets does not exceed the future
recoverable amount consequently, no adjustment is considered necessary by the management.
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