2 Significant accounting policies
2.1 Basis of accounting and preparation of financial statements
The financial statements of the company have been prepared in accordance with generally
accepted accounting principles in India (Indian GAAP). The company has prepared these financial
statements to comply in all material respects with the accounting standards notified under section
133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts)
Rules, 2014. The financial statements have been prepared on an accrual basis and under the
historical cost convention. The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year.
2.2 Depreciation and amortisation
Till the year ended March 31,2014, Schedule XIV to Companies Act, 1956 prescribed requirements
concerning depreciation of fixed assets. From Financial Year 2014-15 onwards, Schedule XIV has
been replaced with Schedule II to the Companies Act, 2013.
Depreciation is provided on written down value method in the manner and as per useful life
prescribed under Schedule II.
2.3 Revenue recognition
The Company follows accrual method of accounting for all significant items of expenses and
income.
2.4 Tangible fixed assets
Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The
cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed
assets up to the date the asset is ready for its intended use and other incidental expenses incurred
up to that date.
2.5 Foreign currency transactions and translations
Foreign currency translation in respect of revenue items are stated at actual rates transacted and in
respect of balance sheet items converted at relevant rates as at the end of the accounting year
followed.
2.6 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. Diluted earnings per share is computed by dividing the profit / (loss) after tax
(including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and
other charges to expense or income relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earnings per share.
2.7 Taxes on income
Tax expense comprises of current and deferred. Current income tax is measured at the amount
expected to be paid to the tax authorities in accordance with the Indian Income-tax Act, 1961
enacted in India. Deferred income taxes reflects the impact of current year timing differences
between taxable income and accounting income for the year and reversal of timing differences of
earlier years
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted
at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current tax liabilities and the deferred
tax assets and deferred tax liabilities relate to the taxes on income levied by same governing
taxation laws. Deferred tax assets are recognized only 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. In situations where the company has unabsorbed depreciation or carry
forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable profits.
At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It
recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or
virtually certain, as the case may be that sufficient future taxable income will be available against
which such deferred tax assets can be realized.
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