IV. SIGNIFICANT ACCOUNTING POLICIES
A. System of Accounting:
i. The company follows mercantile system of accounting and recognizes Income and Expenditure on accrual basis.
ii. The Financial statements have been prepared in all material aspects with Indian Accounting Standards (Ind AS) prescribed under the provisions of the Companies Act, 2013.
iii. Financial statements are prepared on historical cost basis and as a going concern.
B. Revenue Recognition:
i. Sale of goods is recognized at the point of dispatch of goods to customers and Gross Sales are inclusive of duties and taxes. On commencement of GST, sales are net of GST.
ii. Income from Sale of Wind Power is recognized based on units measured and certified by the concerned State Authorities.
iii. Dividends are recognized as income of the year in which the same are received.
C. Property, Plant & Equipment and Depreciation
i. Property, Plant & Equipment acquired by the company are reported at acquisition value, with deductions for accumulated depreciation and impairment losses, if any.
ii. The acquisition cost includes the purchase price (excluding refundable taxes) and expenses directly attributable to the asset to bring it to the site and in the working condition for intended use.
iii. Depreciation is provided in accordance with Schedule II of the Companies Act, 2013 in respect of the remaining useful life of the asset as far as the existing assets are concerned. In respect of additions, depreciation is provided on the basis of the useful life of the assets as prescribed by Schedule II of Companies Act, 2013.
D. Investments
Non-current investments are stated at cost. Traded shares are stated at cost or market value whichever is lower. Mutual Fund investments are stated at lower of cost or fair value
E. Inventories
Stocks are valued at cost or realizable value whichever is lower. Cost of finished goods for this purpose is arrived at on absorption costing.
F. Staff Benefits
Provident Fund Contributions and other staff benefits are accounted on accrual basis. The company is in the process of ascertaining appropriate Group Gratuity Scheme for subscription and the premium / contributions towards the same will be charged to revenue as and when paid. Pending the finalization of the scheme gratuity payments if any, made to the employees is charged to revenue as and when paid.
G. Borrowing Costs:
Costs in respect of borrowings for acquiring / constructing fixed investments, relating to the period they are operational, are capitalized to such investments. Borrowing costs relating to period after the commencement of operations of the project are charged to revenue.
H. Current and Deferred Tax
Accounting treatment in respect of current and deferred tax is in accordance with Indian Accounting Standard 12 (Ind AS 12): “Income Taxes ".
I. Impairment of Assets:
The carrying amounts of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal / external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using the weighted average cost of capital. In carrying out such exercise, due effect is given to the requirements of Schedule II of the Companies Act, 2013.
J. Earnings Per Share (EPS):
This is calculated by dividing the net profit after tax (PAT) for the period attributable to equity shareholders, by number of shares outstanding at the end of the year. In case there are any changes in the equity during the year, EPS would be calculated on the weighted average number of shares outstanding during the period including adjustments of bonus issue, if any.
B. Dividends
Dividends on equity shares are subject to approval at the annual general meeting and are not recognized as a liability as at the year end. Dividends, as and when paid are deducted from accumulated free reserves.
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