4. Significant Accounting Policies:
Overall Considerations: -
The financial information has been prepared using
significant accounting policies and measurement basis as
summarised below:
a) Cash Flow Statement: -
Cash Flows are reported using the indirect method,
whereby profit for the period is adjusted for the effects of
the transactions of non-cash nature, any deferrals or accruals
past or future operating cash receipts or payments and any
items of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing
and financing activities of the company are segregated
b) Property, Plant and Equipment and Intangible Assets: -
Property, plant and equipment ("PPE") are stated at cost, net
of depreciation. The cost of an asset comprises its purchase
price and any cost directly attributable for bringing the asset
to its working condition and location for its intended use.
Subsequent expenditures, if any, related to an item of PPE
are added to its book value only if they increase the future
benefits from existing asset beyond its previously assessed
standard of performance.
The cost of property, plant and equipment not ready for its
intended use at each reporting date are disclosed as capital
work in progress. At the point when asset is operating at
management intended use, the cost of construction is
transferred to appropriate category of property, plant and
equipment and deprecation commences.
Property, Plant and Equipment is derecognised on disposal or
when no future benefits are expected for its use. Any gain or loss
arising on derecognition of assets (calculated as the difference
between the net disposal proceeds and the carrying amount
of the assets) is recognised in other income/expenses in the
statement of profit and loss in the year the asset us derecognised.
Depreciation and amortisation
Depreciation on Property, Plant and Equipment is determined
using the Written Down Value on pro-rata basis based on the
useful life of the asset as prescribed under Schedule II of the
Companies Act, 2013. Improvements on leasehold improvements
are depreciated over the period of lease as per the lease agreement
of the applicable unit.
Intangible Assets under Development
Expenditure incurred which are eligible for capitalization
under intangible assets is carried as "Intangible assets under
development" till they are ready for their intended use.
c) Taxation: -
Tax expense recognised in the Statement of Profit or Loss
comprises the sum of the current tax and deferred tax.
i) Current Income Tax
Current tax is the amount of income tax determined to
be payable in respect of taxable income for a period
as per the provisions of the Income-tax Act, 1961 ("IT
Act"). The Company account for tax credit in respect of
Minimum Alternate Tax ("MAT") in situations where the
MAT payable is higher than tax payable under normal
provisions of the IT Act and where there is a reasonable
certainty of adjusting such credit in future years. The
credit so availed is adjusted in future years when the tax
under normal provisions is higher than MAT payable to
the extent of the said difference.
ii) Deferred Tax
Deferred tax is the effect of timing differences between
taxable income and accounting income that originate
in one period and are capable of reversal in one or
more subsequent periods. 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 are reviewed at each balance sheet
date and recognised/derecognised only to the extent
that there is reasonable/ virtual certainty, depending
on the nature of the timing differences, that sufficient
future taxable income will be available against which
such deferred tax assets can be realised.
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