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 Company 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 certain items that are measured at fair
values, 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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