Note 1: Significant Accounting policies
1.1 Statement of Compliance
These financial statements are prepared in accordance with Indian Accounting
Standards (Ind AS) under the historical cost convention on the accrual basis except for
certain financial instruments which are measured at fair value, the provision of
Companies Act, 2013 (the Act) (to the extent notified) and the guidelines issued by
Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under
Section 133 of the Companies Act, 2013 (the Act) read with Rule 3 Companies (Indian
Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards)
Amendment Rules, 2016.
The accounting policies have been consistently applied except where a newly-issued
accounting standard is initially adopted or a revision to existing accounting standards
required a change in the accounting policies hitherto in use.
1.2 Inventories
The inventories are valued at lower of cost or market value.
1.3 Taxes on Income
Tax expense for the period, comprising current tax and deferred tax, are included in
the determination of the net profit or loss for the period. Current tax is measured at
the amount expected to be paid to the tax authorities in accordance with the Income
Tax Act, 1961.
Deferred tax is recognized on temporary differences between the carrying amounts of
assets and liabilities in the separate financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognized for all taxable temporary differences. Deferred tax assets are generally
recognized for all deductible temporary differences to the extent that it is probable
that taxable profits will be available against which those deductible temporary
differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting
period and reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be recovered. Deferred tax
liabilities and assets are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realized, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting
period.
Current and deferred tax are recognized in profit or loss, except when they relate to
items that are recognized in other comprehensive income or directly in equity, in
which case, the current and deferred tax are also recognized in other comprehensive
income or directly in equity respectively.
1.4 Property, plant & equipment:
All Property, Plant & Equipment's are stated at cost of acquisition, less accumulated
depreciation and accumulated impairment losses, if any. Direct costs are capitalized
until the assets are ready for use and include freight, duties, taxes and expenses
incidental to acquisition and installation.
Subsequent expenditures related to an item of Property, Plant & Equipment are added
to its carrying value only when it is probable that the future economic benefits from
the asset will flow to the Company and cost can be reliably measured.
Losses arising from the retirement of, and gains or losses arising from disposal of
Property, Plant and Equipment are recognized in the Statement of Profit and Loss.
Depreciation is provided on a pro-rata basis on the straight line method ('SLM') over
the estimated useful lives of the assets specified in Schedule II of the Companies Act,
2013.
On transition to Ind AS, the Company has elected to continue with the carrying value
of all of its property, plant and equipment recognized as at April 1, 2016 measured as
per the previous GAAP and use that carrying value as the deemed cost of the property,
plant and equipment.
1.5 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable and
recognized when it is probable that the economic benefits associated with the
transaction will flow to the entity.
1.6 Financial Instruments
Initial Recognition
The company recognizes financial assets & financial liabilities when it becomes a
party to the contractual provision of the instruments. All financial assets & liabilities
are recognized at fair value on initial recognition, except for trade receivables which
are initially measured at transaction price. Transaction cost that are directly
attributable to the acquisition or issue of financial assets & liabilities that are not at
fair value through profit or loss, are added to the fair value on initial recognition.
Regular way purchase and sale of financial assets are accounted for a trade date.
Subsequent measurement
Financial assets at amortized cost: Financial assets having contractual terms that
give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal outstanding and that are held within a business model whose
objective is to hold such assets in order to collect such contractual cash flows are
classified in this category. Subsequently, these are measured at amortized cost using
the effective interest method less any impairment losses
1.7 Employee Benefits
The Company follows the policy of accounting for the same only on crystallization of
the liability.
1.8 Earnings Per Share
Basic Earnings per share is computed by dividing the net profit attributable to equity
shareholders by the weighted average number of equity shares outstanding during
the period.
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