1. Significant Accounting Policies & Notes annexed to and forming part of the Financial Statements
1.1. Basis for preparation of financial statements:
a) Compliance with Indian Accounting Standards (Ind AS)
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as
per the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of the Companies
Act, 2013.
The same accounting policies have been applied for all the periods presented except when the company
has made use of certain exceptions.
The financial statements have been prepared on the historical cost basis except for certain instruments that
are measured at fair values at the end of each reporting period, as explained in the accounting policies
below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and
services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of whether that price
is directly observable or estimated using another valuation technique.
All assets and liabilities have been classified as current or non-current as per the Company's normal
operating cycle and other criteria set out in the schedule III of the Act. The Company has determined its
operating cycle as twelve months for the purpose of current-noncurrent classification of assets and
liabilities.
The financial statements are presented in Indian Rupees which is also its functional currency. All amounts
have been rounded - off to the nearest rupees, unless otherwise indicated.
b) Use of estimates and judgment
In preparing these financial statements, management has made judgments, estimates and assumptions
that affect the application of accounting policies and the reported amounts of certain assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized prospectively.
1.2. Property, Plant and Equipment & Depreciation
Items of Property, Plant and Equipment are stated at cost less accumulated depreciation.
Cost of an item of property, plant and equipment comprises its purchase price, including import duties and
non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost
of bringing the item to its working condition for its intended use and estimated costs of dismantling and
removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and
direct labor, any other costs directly attributable to bringing the item to working condition for its intended use,
and estimated costs of dismantling and removing the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair
value less cost of disposal and value in use. For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable cash inflows which are largely independent of
the cash inflows from other assets or groups of assets (cash-generating units).
Depreciation on the fixed assets has been provided based on useful lives as prescribed under part C of the
schedule II of the companies' act, 2013.
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted
if appropriate.
Depreciation on additions (disposals) is provided on a pro-rata basis i.e., from (up to) the date on which
asset is ready for use (disposed of).
1.3 Impairment of non-financial assets
The Company's non-financial assets, other than deferred tax assets are reviewed at each reporting date to
determine whether there is any indication of impairment. If any such indication exists, then the asset's
recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into
cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash
inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value
less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss
recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to
the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a
pro rata basis.
1.4 Intangible assets
Intangible assets are amortized over the estimated useful lives and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortization period and the
amortization method are reviewed at least at each financial year end. Changes in the expected useful life or
the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by
changing the amortization period or method, as appropriate, and are treated as change in accounting
estimates. The amortization expense on intangible assets with finite useful lives is recognized in profit or
loss.
1.5 Inventory
Cost of inventories have been computed to include all costs of purchases (including materials), cost of
conversion and other costs incurred, as the case may be, in bringing the inventories to their present location
and condition.
Stores and consumables are valued at cost arrived at on FIFO basis or net realisable value, whichever is
lower.
1.6 Foreign currencies transactions and translations
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
closing rates of exchange at the reporting date.
The gain or loss on decrease/increase in reporting currency due to fluctuations in foreign exchange rates, in
case of monetary current assets and liabilities in foreign currency, are recognised in the Statement of Profit
and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using
the exchange rates at the date of the transaction.
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