B: SIGNIFICANT ACCOUNTING POLICIES
1. Basis for Preparation of Financial Statements
The Financial statements have been prepared under the historical cost convention on the accrual basis in accordance with
Generally Accepted Accounting Principles in India, and materially comply with the mandatory accounting standards issued by
the Institute of Chartered Accountants of India (ICAI) and the provisions of the Companies Act, 2013. Accounting standards
have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy hitherto in use. Management evaluates all recently
issued or revised accounting standards on an ongoing basis.
2. Use of Estimates
The preparation of Financial Statements in conformity with GAAP requires that the management of the Company makes
estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of
assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples
of such estimates include the useful lives of fixed assets and intangible assets, provision for doubtful debts / advances, future
obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates. Difference between
the actual results and estimates are recognized in the period in which the results are known/ materialized. Management
believes that the estimates used in preparation of financial statements are prudent and reasonable.
3. Fixed Assets and Depreciation
i. Fixed Assets are shown at historical cost net of recoverable taxes inclusive of incidental expenses less accumulated
depreciation.
ii. Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated depreciation.
iii. Depreciation on fixed assets is provided on Straight Line Method at the rates prescribed under Companies Act, 2013.
iv. Depreciation on fixed assets sold during the year, is provided on pro-rata basis with reference to the date of addition/
deletion.
4. Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.
Revenue from operations includes sale of services,
Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis
taking into account the amount outstanding and rate applicable.
5. Investments
Investments are stated at cost, Provision for diminution in the value of investments is made only if such a decline is other
than temporary.
6. Impairment of Assets
As on Balance Sheet date, the Company reviews the carrying amount of Fixed Assets to determine whether there are any
indications that those assets have suffered “Impairment Loss”. Impairment loss, if any, is provided to the extent, the carryi ng
amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset's net selling price and its
value in use. Value in use is the present value of estimated future cash flows expected to arise from continuing use of an
asset and from its disposal at the end of its useful life.
7. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All
other borrowing costs are charged to revenue.
8. Taxation
Tax expenses for the year comprise of current tax and deferred tax. Current tax is measured after taking into consideration
the deductions and exemptions admissible under the provision of Income Tax Act, 1961 and in accordance with Accounting
Standard 22 on “Accounting for Taxes on Income”, issued by ICAI.
Deferred Tax assets or liabilities are recognized for further tax consequence attributable to timing difference between taxable
income and accounting income that are measured at relevant enacted tax rates. At each Balance Sheet date the company
reassesses unrecognized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization,
as the case may be.
9. Leases
Finance Lease
Leases which effectively transfer to the company all the risks and benefits incidental to ownership of the leased item, are
classified as Finance Lease. Lease rentals are capitalized at the lower of the fair value and present value of the minimum
lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between
the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged
directly against income life of the assets at the following rates.
Operating Lease
Lease where the lesser effectively retains substantially all risks and benefits of the asset are classified as Operating lease.
Operating lease payments are recognized as an expense in the Profit & Loss account on a Straight Line Basis over the Lease
term.
10. Preliminary Expenses
Preliminary expenses are amortized as per applicable income tax rules.
11. Earnings per Share
In determining the Earnings Per share, the company considers the net profit after tax includes any post tax effect of any
extraordinary / exceptional item. The number of shares used in computing basic earnings per share is the weighted average
number of shares outstanding during the period.
The number of shares used in computing Diluted earnings per share comprises the weighted average number of shares
considered for computing Basic Earnings per share and also the weighted number of equity shares that would have been
issued on conversion of all potentially dilutive shares.
In the event of issue of bonus shares, or share split the number of equity shares outstanding is increased without an increase
in the resources. The number of Equity shares outstanding before the event is adjusted for the proportionate change in the
number of equity shares outstanding as if the event had occurred at the beginning of the earliest period reported.
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