1. Material Accounting Policies
This note provides a list of the material accounting
policies adopted in preparation of these financial
statement. These policies have been consistently
applied to all the years presented, unless otherwise
stated.
1.1. Basis of Preparation of Financial Statements
These financial statements have been prepared in
accordance with Indian Accounting Standards
(Ind AS) notified under Section 133 of the
Companies Act, 2013 ("the Act") read with Rule 3
of the Companies (Indian Accounting Standards)
Rules, 2015 as amended. The Financial Statements
have also been prepared in accordance with the
relevant presentation requirements of the
Companies Act, 2013.
Accounting policies have been consistently
applied except where a newly issued accounting
standard is initially adopted or a revision to an
existing accounting standard requires a change in
the accounting policy hitherto in use.
These Financial Statements are prepared in Indian
Rupees (INR) which is also the Company's
functional currency and all the values are rounded
off to the nearest thousands/ lakhs (upto two
decimals) except when otherwise stated.
The Company has prepared the financial
statements on the basis that it will continue to
operate as a going concern.
1.2. Use of Estimates
The preparation of Financial Statements in
conformity with Ind AS requires management to
make judgements, estimates and assumptions that
affect the application of the accounting policies and
the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported
amounts of revenues and expenses during the
year. Actual results could differ from those
estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the
revision affects only that period; they are
recognised in the period of the revision and future
periods if the revision affects both current and
future periods.
1.3. Classification of Current and Non-Current
The Company presents assets and liabilities in the
balance sheet based on current/ non-current
classification specified in Schedule III to the
Companies Act, 2013. An asset is treated as current
when it is:
♦ Expected to be realised or intended to be sold or
consumed in normal operating cycle
♦ Held primarily for the purpose of trading
♦ Expected to be realised within twelve months after
the reporting period, or
♦ Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period
♦ All other assets are classified as non-current.
♦ A liability is current when:
♦ It is expected to be settled in normal operating
cycle
♦ It is held primarily for the purpose of trading
♦ It is due to be settled within twelve months after
the reporting period or there is no unconditional
right to defer the settlement of the liability for at
least twelve months after the reporting period
The Co mp any classifies all other liabilities as non¬
current.
The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. The
company has identified twelve months as its -
operating cycle.
1.4. Historical Cost Convention
The Financial Statements are prepared in
accordance with the historical cost convention,
except for investments that are measured at fair
value, as explained in the accounting policies.
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. In estimating the fair
value of an asset or a liability, the Company takes
into account the characteristics of the asset or
liability if market participants would take those
characteristics into account when pricing the asset
or liability at the measurement date.
1.5. Property, Plant and Equipment
Property, Plant and Equipment are stated at cost,
less accumulated depreciation and impairment, if
any. Costs directly attributable to acquisition are
capitalized until the Property, Plant and
Equipment are ready for use as intended by
management.
Depreciation methods, estimated useful lives
and residual value
Depreciation is provided on written down value
basis to allocate the cost of assets, net of their
residual values, over their estimated useful lives.
Depreciation is calculated on a pro-rata basis from
the date of acquisition/installation till the date the
assets are sold or disposed of:
The residual values are not more than 5% of the
original cost of the asset. The residual values,
useful lives and method of depreciation of
property, plant and equipment are reviewed at
each financial year end and adjusted
prospectively, if appropriate. The carrying amount
of an asset is written down immediately to its
recoverable amount if the carrying amount of the
asset is greater than its estimated recoverable
amount. Asset costing Rs. 5,000/- or less are
depreciated fully in the year of acquisition.
1.6. Impairment of Assets
The carrying amount of assets are reviewed at each
Balance Sheet date to assess if there is any
indication of impairment based on internal/
external factors. An impairment loss on such
assessment will be recognised whenever the
carrying amount of an asset exceeds its recoverable
amount. The recoverable amount of the assets is
net selling price or value in use, whichever is
higher. While assessing value in use, the estimated
future cash flows are discounted to the present
value by using weighted average cost of capital. A
previously recognised impairment loss is further
provided or reversed depending on changes in the
circumstances and to the extent that carrying
amount of the assets does not exceed the carrying
amount that will be determined if no impairment
loss had previously been recognised.
1.7. Cash and cash Equivalents
Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand and short¬
term deposits with an original maturity of three
months or less, which are subject to an insignificant
risk of changes in value.
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