Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of the financial statements. These
policies have been consistently applied to all the years presented unless otherwise stated.
Basis of preparation of financial statements
(a) Statement of compliance
These Financial Statements have been prepared to comply with the Generally Accepted Accounting Principles in India
(Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.
The financial statements are prepared on accrual basis under the historical cost convention. The financial statements
are presented in Indian Rupees rounded off to the nearest rupee. All income and expenditure having a material
bearing on the Financial Statements are recognized on accrual basis.
(b) Use of Estimates
The preparation of financial statements in conformity with Indian GAAP requires the Management to make estimates
and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the
reported income and expenses during the year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results could differ due to these estimates and the
differences between the accrual results and the estimates are recognized in the periods in which the results are known
/ materialize.
(c) Operating Cycle
Based on the nature of activities of the Company and the normal time between acquisition of assets and their
realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose
of classification of its assets and liabilities as current and non-current.
(d) Functional and Presentation currency
The Financial statements are presented in Indian Rupees, which is the functional currency of company and the
currency of the primary economic environment in which the company operates.
(e) Revenue Recognition
Revenue from Services
Timing of recognition: Revenue from Services is recognised in the accounting period in which the services are
rendered. For fixed price contracts, revenue is recognised based on the actual service provided to the end of the
reporting period as a proportion of the total services to be provided (percentage of completion method).
Measurement of revenue: Estimates of revenues, cost or extent of progress towards completion are revised if
circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or
loss in the period in which the circumstances that give rise to the revision become known to the management.
Dividend and Interest Income
a) Dividend income from investments is recognised when the shareholder’s right to receive payment has been
established (provided that it is probable that the economic benefits will flow to the company and the amount of
income can be measured reliably).
b) Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to
the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net
carrying amount on initial recognition.
(f) Taxation:
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax:
Income tax expense comprises of current tax and deferred tax charge or credit. Current Tax is determined based on
the taxable income computed in accordance with the provisions of Income Tax Act, 1961.
Deferred tax:
Deferred Tax Assets and Liabilities are recognised for the future tax consequences of timing differences between the
book profit and tax profit. While deferred tax liabilities are recognised immediately, deferred tax assets are recognised
only if there is virtual certainty of taxable profits in the future.
(g) Impairment of assets
The Company assesses at each Balance sheet date whether there is any indication that an asset may be impaired. If
any such indication exists, the Company estimates the recoverable amount of the asset. An asset’s recoverable amount
is the higher of an asset’s or cash generating unit’s net selling price and its value in use. Recoverable amount is
determined for an individual asset, unless the asset does not generate cash inflows from continuing use that are largely
independent of those from other assets or group of assets. 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 and 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 a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject
to a maximum of depreciated historical cost and is accordingly reversed in the Statement of Profit and Loss.
(h) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value, and bank overdrafts (if any).
(i) Investments
Investments that are readily realizable and are intended to be held for not more than one year from the date on which
the investments are made, are classified as Current Investments. All other Investments are classified as Long Term
Investments.
Current Investments are stated at lower of cost and fair value. Long Term Investments are carried at cost, after
providing for any diminution in value, if such diminution is other than temporary in nature.
(j) Property Plant and Equipment
(i) Fixed assets are stated at cost less accumulated depreciation. Cost includes non-refundable taxes, duties
and other incidental expenses related to acquisition and installation.
(ii) The carrying value of fixed assets, both tangible and intangible, is reviewed at each Balance Sheet date and
impairment is provided for, if the carrying value of an asset exceeds its recoverable amount.
(iii) Fixed Assets are physically verified every year.
(k) Depreciation and Amortization methods, estimated useful lives and residual value
The Company has aligned the useful life of its fixed assets with those specified in Part C of Schedule II to the Companies
Act, 2013 wherever the useful lives of assets are determined.
The useful lives of the asset are detailed as under:
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