The accounting policies set out below have been applied consistently to the years presented in these financial statements.
2.1 Basis of preparation of financial statements
The financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under historical cost
convention on the accrual basis of accounting and comply with accounting standards. as prescribed under Section 133 of the Companies Act,
2013, as applicable and the relevant provisions of the Companies Act, 2013. The accounting policies adopted in preparation of the financial
statements are consistent with those followed in the previous year.
Current and non-current classification
All assets and liabilities are classified into current and non-current.
Current Assets
An asset is classified as current when it satisfies any of the following criteria:
a. it is expected to be realized in or is intended for sale or consumption in, the Company's normal
operating cycle;
b. it is held primarily for the purpose of being traded;
c. it is expected to be realized within 12 Months after the reporting date; or
d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting
date.
Current assets include the current portion of non-current financial assets.
All other assets are classified as non-current.
Current Liabilities
A liability is classified as current when it satisfies any of the following criteria:
a. it is expected to be settled in the company's normal operating cycle;
b. it is held primarily for the purpose of being traded;
c. it is due to be settled within 12 months after the reporting date; or the Company does not have an unconditional right to defer settlement of
the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities.
All other liabilities are classified as non-current.
Operating cycle
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Based on the
nature of operations and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle being a period of 12 months for the purpose of classification of assets and liabilities as current and
non-current.
2.2 Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make judgements, estimates and assumptions that
affect the reported balances of assets and liabilities, the disclosure of contingent liabilities as at the date of the financial 'Statements and
reported-amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and
future periods.
2.3 Revenue recognition
Sale of goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The company collects GST on behalf of the government and, therefore, these are not economic benefits flowing
to the company. Hence, they are excluded from revenue.
2.4 Fixed assets and depreciation
Property, plant and equipment ("PPE")
Property, plant and equipment, capital work in progress are stated at cost, net of accumulated depreciation and accumulated impairment losses,
if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its
working condition for the intended use and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts and rebates
are deducted in arriving at the purchase price. Such cost includes the cost of replacing part of the plant and equipment. When significant parts of
plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Gains or losses arising from derecognition of property, plant and equipment are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
Depreciation
For depreciation the Company adopts the useful life as prescribed under the Companies Act 2013 and depreciation is calculated as per the
written down value method by taking into consideration the useful life and residual value of the asset specified in Part 'C' of Schedule II to the
Act.
2.5 Borrowing costs
Borrowing costs are interest and other costs (including exchange differences arising from foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs) incurred by the Company in connection with the borrowing of funds. Borrowing costs directly
attributable to acquisition or construction of those PPE which necessarily take a substantial period of time to get ready for their intended use are
capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.
2.6 Impairment of assets
The carrying values of assets are reviewed at each reporting date to determine if there is indication of any impairment. If any indication exists,
the asset's recoverable amount is estimated. The recoverable amount of an asset or smallest group of assets (Cash Generating Units (CGU)) that
generates cash inflows from continuing use is the greater of its value in use and its net selling price. In assessing value in use, the estimated
future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the assets or Cash Generating Units (CGU). For assets that are not yet available for use, the recoverable
amount is estimated at each reporting date. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating
unit exceeds its recoverable amount. Impairment losses are recognized in the statement of profit and loss. An impairment loss is reversed if
there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortization, if no
impairment loss had been recognized.
2.7 Investment
Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current
investments. All other investments are classified as non-current. investments. However, that part of non-current investments which is expected
to be realized within 12 months after the reporting date is also presented under 'current assets' as "current portion of non-current investments"
in consonance with the current—non-current classification scheme. Non-current investments (including current portion thereof) are carried at
cost less any other-than-temporary diminution in value, determined separately for each individual investment. Current investments are carried
at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments. Any
reductions in the carrying amount and any reversals of such reductions are charged or credited to the statement of profit and loss.
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