2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The accompanying financial statement are prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention, on the accrual basis of accounting, unless otherwise stated. This financial statement has been prepared as going concern and comply, in all material respects, with the Accounting Standards as prescribed under section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014.
2.2 Use of Estimates
The presentation of financial statements requires certain estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.
2.3 Property, Plant & Equipment and Depreciation
All Property, Plant & Equipment are accounted for at cost less depreciation.
Depreciation on Property, Plant & Equipment is provided on straight line basis over the useful lives of assets specified in Part C of Schedule II to the Companies Act 2013 read with the relevant notifications issued by the Department of Company affairs.
Depreciation on assets acquired / disposed off during the year is provided on pro-rata basis with reference to the date of addition / disposal.
In accordance with the provisions contained in Schedule II to the Companies Act, 2013 components of an asset, which have significant cost to total cost of assets and its own useful life, are required to be depreciated separately over its useful life. Any such component, if identified by the management based on technical evaluation, is depreciated separately over its own useful life.
2.4 Intangible Assets and Amortisation
Intangible assets purchased are initially measured at cost. The cost of an intangible asset comprises its purchase price including any costs directly attributable to making the asset ready for their intended use.
Intangible assets are amortised over management estimate of its useful life of 3 years on straight line basis.
2.5 Impairment of Assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
2.6 Investments
Long term investments are carried at cost less provision, if any, for permanent diminution in value of such investments.
Current investments are carried at lower of cost or market value. Diminution in value is charged in the statement of profit and loss account.
2.7 Revenue Recognition
Revenue on sales of product is recognised when risk and reward are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products.
Revenue from contracts priced on time basis are recognised when services are rendered. Revenue from fixed fee contracts is recognised when milestones are achieved and no reasonable uncertainty as to its realization exists.
Interest income is recognised on time proportionate basis.
Dividend income is accounted for as and when the right to receive is established.
2.8 Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.
Monetary items denominated in foreign currencies outstanding at the year-end are translated at the exchange rate prevailing on that date, and exchange gain or losses arising have been transferred to Statement of Profit & Loss.
Non-monetary items denominated in foreign currencies are valued at the exchange rates prevailing on the date of transaction. Any gains or losses arising due to exchange difference on long term foreign currency monetary items are accounted for in the Statement of Profit and Loss.
Any gains or losses arising due to exchange differences at the time of settlement of payables are accounted for in the Statement of Profit & Loss.
2.9 Employee Benefits
• Post-Employment Benefit:
Employee benefits include Provident Fund, Employee State Insurance and Labour Welfare Fund as applicable to the company and are accounted for on accrual basis.
• Defined Benefit Plans:
Liability towards gratuity is accrued based on actuarial valuation using the projected Unit Credit Method at the balance sheet date. Actuarial Gains and Losses are recognized immediately in the Statement of Profit and Loss in the period in which they occur.
2.10 Taxation
Provision for income-tax is based on the taxable income computed in accordance with the provision of the Income-tax Act, 1961.
Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period.
Deferred tax assets are recognized on unabsorbed depreciation and carry forward of losses based on virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
2.11 Earnings Per Share
The Company reports basic and diluted earnings per share in accordance with Accounting Standard 20 - Earnings Per Share prescribed by the Companies (Accounting Standards) Rules, 2006. Basic earnings per share is computed by dividing the net profit after tax attributable to the equity shareholders by the weighted average number of equity shares outstanding for the year.
|