3 SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
a. Presentation and disclosure
The Company has prepared the Financial Statements
along with the relevant notes in accordance with the
requirements of Schedule III of the Act.
b. Use of estimates
The preparation of financial statements in conformity
with Indian GAAP requires the management to make
judgments, estimates and disclosure that affect the
reported amounts of revenues, expenses, assets and
liabilities and disclosure of contingent liabilities, at
the end of the reporting period. Although, these
estimates are based on the management's best
knowledge of current events and actions, uncertainty
about these assumptions and estimates could result
in the outcomes requiring a material adjustment to
the carrying amounts of assets or liabilities in current
and future periods.
c. Cash and Cash Equivalent
Cash and cash equivalents for the purposes of cash
flow statement comprise cash at bank and in hand
and short-term investments with an original maturity
of three months or less.
d. Statement of Cash Flow
Cash flows are reported using the indirect method,
whereby profit / (loss) before extraordinary items
and tax is adjusted for the effects of transactions of
non-cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash flows
from operating, investing and financing activities of
the Company are segregated based on the available
information.
e. Property, Plant and Equipment
Property, Plant and Equipment are stated at
cost of acquisition, installation or construction
including other direct expenses incurred to bring
the assets to its working condition for its intended
use less accumulated depreciation, amortization,
impairment, discardation and compensation.
Gains or losses arising from derecognition of
Property, plant and equipment are measured as the
difference between the net disposal proceeds and
the carrying amount of the asset and are recognized
in the statement of profit and loss when the asset is
derecognized.
f. Intangible assets
Intangible assets are stated at cost of acquisition
less accumulated amortisation and impairment
loss, if any. Intangible assets are recognized only
if it is probable that the expected future economic
benefits that are attributable to the assets will flow
to the enterprise and the cost of the assets can be
measured reliably.
Technology Development:
Expenditure incurred during research is charged to
revenue when no intangible asset arises from such
research.
Development expenditure is capitalised to the extent
that it is expected that such asset will generate future
economic benefits; adequate technical, financial
and other resources required to complete the
development and to use or sell the asset are available,
and the expenditure attributable to the asset during
its development can be measured reliably. The
Company filed patents for 'DRYAD' Technology and
'Integrated Process for Pre-treatment and Anaerobic
Digestion of Waste' (referred to as MARUT Drum and
allied equipment) in June 2014 and was granted
the patents on June 16, 2022, and July 10, 2023,
respectively.
g. Depreciation & Amortisation
Depreciation on Property, Plant & Equipment is
provided on the written down value method at
the calculated rates on the basis of the useful life
specified in Part C and in the manner prescribed
under Schedule II of the Companies Act, 2013, as
under:
the written down value of assets which have retired
from active use.
Intangible assets in the nature of software's are
amortised on a Straight Line Method over their
useful lives of 3 years.
Internally generated intangible assets recognised
during the year are amortised on a Straight Line
Method over their estimated useful life of 10 years, in
accordance with the requirements of the applicable
accounting standards.
However, in respect of two specific intangible assets,
based on technical evaluation and management's
assessment of the future economic benefits, the
useful life has been estimated to be 20 years, and
the amortisation is accordingly provided over such
period on a Straight Line Method.
The Company has amortized the Technology
Development cost over its estimated life over 10
years.
The estimated useful lives of intangible assets and
the amortisation period are reviewed at the end of
each financial period and the amortization method
is revised to reflect the changed pattern, if any.
h. Intangible Assets under Development
Intangible assets under development are stated
at cost, net of accumulated impairment losses, if
any. The cost comprises of salary cost incurred in
the development of Activated Carbon to Mesh
Membrane development for water /gas purification
application, Micro Algae application for waste water
treatment, Cashew apple to Vinegar/Bioethanol,
Emission control device for Emission control
application, Lithium Metal recovery from Industrial
waste water, Biogenic CO2 Methanation Technology,
MSW torrefaction, Biogenic CO2 To Mixed Alcohol
(C1-C4) conversion, RDF/Biomass to renewable
Dimethyl ether (r-DME), Paddy straw and other
Agri-residue pretreatment using Bio- enzymatic
Technologies, Bio methanation catalyst, Bio grinder,
and AI-based Digester Health Monitoring/Prediction
Software.
i. Revenue Recognition
Revenue is recognized based on the nature of
activity to the extent it is probable that the economic
benefits will flow to the Company and revenue can
be reliably measured.
Revenue from Construction Contract
a. For Engineering, Procurement and Construction
('EPC') and construction contracts, contract
prices are either fixed or subject to price
escalation clauses.
b. Revenues are recognised on a percentage of
completion method measured on the basis of
stage of completion which is as per joint surveys
and work certified by the customers.
c. Profit is recognised in proportion to the
value of work done (measured by the stage
of completion) when the outcome of the
contract can be estimated reliably. When the
total contract cost is estimated to exceed
total revenues from the contract, the loss is
recognized immediately.
d. Amounts due in respect of price escalation
claims and/ or variation in contract work are
recognised as revenue only if the contract
allows for such claims or variations and/or there
is evidence that the customer has accepted it
and are capable of being reliably measured.
Revenue from Supply Contracts-Sale of
goods
Revenue from supply contract is recognized when
the substantial risk and rewards of ownership is
transferred to the buyer.
Service income
Service income is recognised on the basis of
completion of service method.
Interest
Interest income is recognized on a time proportion
basis taking into account the amount outstanding
and the applicable interest rate. Interest income
is included under the head "other income" in the
statement of profit and loss.
j. Investments
Investments, which are readily realizable and
intended to be held for not more than one year from
the date on which such investments are made, are
classified as current investments. Current investments
are carried in the financial statements at lower of
cost and fair value determined on an individual
investment basis. All other investments are classified
as long term investments. Long term investments
are carried at cost. Provision for diminution in the
value of long-term investments is made only if such
a decline is other than temporary in the opinion of
the management. The cost comprises purchase price
and directly attributable acquisition charges such as
brokerage, fees and duties.
k. Inventories
Inventories comprising finished goods, are carried at
the lower of cost and net realisable value and work-
in-progress are valued at cost.
Raw materials are valued at cost using Weighted
average method. However, materials and other items
held for use in the production of inventories are not
written down below cost if the finished products in
which they will be incorporated are expected to be
sold at or above cost.
Cost of inventories comprise of all cost of purchase,
cost of conversion and other cost incurred in
bringing them to their respective present location
and condition.
Net realizable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and estimated costs necessary to
make the sale.
l. Retirement and other employee benefits
Short Term Employee Benefits:
Short term employee benefits expected to be paid
in exchange for the services rendered by employees
are recognised undiscounted during the period
employee renders services.
Post-Employment Benefits:
Company's contribution for the period paid/
payable to defined contribution retirement benefit
schemes are charged to statement of Profit and Loss.
Company's liability towards defined benefit plan
viz. gratuity is determined using the Projected Unit
Credit Method as per actuarial valuation carried out
at the balance sheet date. The benefit is unfunded.
Actuarial gains and losses for both defined benefit
plans are recognized in full in the period in which
they occur in the statement of profit and loss.
m. Borrowing Cost
Borrowing costs attributable to acquisition and
construction of qualifying assets are capitalized as a
part of the cost of such assets up to the date when
such assets are ready for its intended use. Other
borrowing costs are charged to the statement of
Profit and Loss in the year in which they are incurred.
n. Earnings Per Share
Basic earning per share is calculated by dividing the
net profit or loss for the year attributable to equity
shareholders by the weighted average number of
equity shares outstanding during the year. For the
purpose of calculating diluted earnings per share, the
net profit or loss for the year attributable to equity
shareholders and the weighted average number of
shares outstanding during the year is adjusted for
the effects of all dilutive potential equity shares.
o. Income taxes
Tax expense comprises current and deferred tax.
Current income-tax is measured at the amount
expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 enacted
in India and tax laws prevailing in the respective tax
jurisdictions where the Company operates. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at
the reporting date.
Deferred income taxes reflect the impact of timing
differences between taxable income and accounting
income originating during the current year and
reversal of timing differences for the earlier years.
Deferred tax is measured using the tax rates and
the tax laws enacted or substantively enacted at the
reporting date. Deferred income tax relating to items
recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable
timing differences. Deferred tax assets are recognized
for deductible timing differences 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 reporting date, the Company re-assesses
unrecognized deferred tax assets. It recognizes
unrecognized deferred tax asset 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.
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 taxes relate
to the same taxable entity and the same taxation
authority.
p. Impairment of Assets
At each Balance Sheet date, the company assesses
as to whether there is any indication that an asset is
impaired. If any such indication exists, the company
estimates the recoverable amount of the asset.
If such recoverable amount of the asset or the
recoverable amount of the cash generating unit
to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its
recoverable amount. The reduction is treated as an
impairment loss and is recognized in the Statement
of Profit and Loss. If at the balance sheet date
there is an indication that if a previously assessed
impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the
recoverable amount. However, as per the assessment
made by the company as on the balance sheet date,
there is no such indication of any impairment of any
asset during the year under report and therefore
there is no effect of impairment loss in the financial
statement for the year under report.
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