(b) Significant accounting policies
1. Basis of Preparation
The financial statements of the Company have been
prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) to
comply with the Accounting Standards prescribed
under Section 133 of the Companies Act, 2013, read
with Rule 7 of the Companies (Accounts) Rules, 2014.
The financial statements have been prepared on
accrual basis under the historical cost convention.
Accounting policies are consistently applied except
where a newly issued accounting standard is initially
adopted or a revision to an existing accounting
standard requires a change in accounting policy
hitherto in use. Where a change in accounting policy is
necessit-ated due to changed circumstances, detailed
disclosures to that effect along with the impact of such
change is duly disclosed in the financial statements.
The Accounting policies adopted in the preparation
of the financial statements are consistent with those
followed in the previous year.
2. Use of Estimate
The preparation of the financial statements in
conformity with Indian GAAP requires the Management
to make estimates and assumptions considered in
the reported amounts of assets and liabilities and
disclosures relating to contingent liabilities as at the
date of the financial statements and the reported
amounts of income and expenditure during the
year. Examples include provisions for doubtful
debts, provision for employee benefits, provision for
taxation, useful lives of depreciable assets, provision
for impairment, provision for contingencies, provision
for warranties / discounts etc. The management
believes that the estimates used in preparation of
the financial statements are prudent and reasonable.
Future results could differ from those estimates. The
effect of changes in accounting estimates are reflected
in the financial stateme-nts in the period in which
results are known and, if material, are disclosed in the
financial statements.
3. Revenue recognition
Collection and transportation of waste, sweeping of
roads & drainage cleaning
Revenue from collection and transportation is
recognised when the services have been performed.
Revenue is product of quantity of solid waste
tonnage collected and transported to the specified
in the agreement with the customer. Performance
obligation in case of collection and transportation of
waste is satisfied at a point in time when the actual
service is performed i.e on the basis of solid waste
tonnage collected. Transaction price is the amount
of consideration to which the company expects to be
entitled in exchange for transferring good or service to
a customer excluding amounts collected on behalf of
a third party. Revenue is recognised in the Statement
of Profit and Loss to the extent that it is probable that
the economic benefits will flow to the company and
the revenue and costs, if applicable, can be measured
reliably. The Group recognised the revenue where
the performance obligations are satisfied at a time.
Accrued revenue are classified as Unbilled receivables
(only act of invoicing is pending) when there is
unconditional right to receive cash, and only passage
of time is required, as per contractual terms.
Costs to obtain a contract which are incurred regardless
of whether the contract was obtained are charged-off
in Statement of Profit and Loss immediately in the
period in which such costs are incurred.
Income from sale of goods and scraps
Income from sale of goods and scraps are recognised
at a time on which the performance obligation is
satisfied The period over which revenue is recognised
is based on entity's right to payment for performance
completed. In determining whether an entity has
right to payment, the entity shall consider whether it
would have an enforceable right to demand or retain
payment for performance completed to date.
4. Other Income
Income from interest is recognised on a time
proportion basis taking into account the amount
outstanding and rate applicable in the transaction.
Dividend income is recognised when the Company's
right to receive dividend is established.
5. Property, plant and equipment (including
depreciation, capital work in progress)
a) Fixed Assets are stated at cost after reducing
accumulated depreciation until date of the
Balances sheet. Direct Cost are Capitalized until
assets are ready to use and include financing
costs relating to any borrowing attributable to
acquisition.
b) Depreciation on fixed assets has been provided
on Written Down Value method on pro-rata
basis at the rates and in the manner laid down in
Schedule II to the Companies Act, 2013.
6. Investment
Investments are either classified as current or long¬
term, based on Management's intent at the time
of making the investment. Current investments are
carried individually, at the lower of cost and fair value.
Long-term investments are carried individually at cost
less provision made to recognise any diminution,
other than temporary, in the value of such investment.
Cost of investments includes acquisition charges such
as brokerage, fees and duties. Provision is made to
recognise any reduction in the carrying value of long¬
term investments and any reversal of such reduction
is credited to the Statement of Profit and Loss.
7. Employee Benefits
Employee benefits include provided fund,
superannuation fund, employee's state insurance
scheme, gratuity fund and compensated absences.
Defined contribution plans
Contributions in respect of Employees Provident
Fund and Pension Fund which are defined
contribution schemes, are made to a fund
administered and managed by the Government
of India and are charged as an expense based on
the amount of contribution required to be made
and when service are rendered by the employees.
Defined benefit plans
The Company also provides for other retirement
benefits in the form of gratuity. The Company
accounts for its liability towards Gratuity based on
actuarial valuation made by an independent actuary
as at the balance sheet date based on projected
unit credit method. Actuarial gains and losses are
recognised in the Statement of Profit and Loss in the
period in which they occur.
Other short-term employee benefits
Other short-term employee benefits, performance
incentives expected to be paid in exchange for the
services rendered by employees are recognised
during the period when the employee renders service
8. Taxes on Income
A provision is made for income tax annually, based
on tax liability computed, after considering tax
allowances and exemptions. Tax expense for a year
comprises of current tax and deferred tax.
Deferred tax is recognised on timing difference, being
the difference between the taxable income and the
accounting income that originate in one period and
are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates
and the tax laws enacted or substantively enacted
as at the reporting date. Deferred tax liabilities
are recognised for all timing differences. Deferred
tax assets are recognised for timing differences of
items other than unabsorbed depreciation and carry
forward losses only to the extent that reasonable
certainty exists that sufficient future taxable income
will be available to realise the assets. Deferred tax
assets and liabilities are offset if such items relate
to taxes on income levied by the same governing tax
laws and the Company has a legally enforceable right
for such set off. Deferred tax assets are reviewed at
each balance sheet date for their realisability.
MAT credit
Minimum Alternate Tax (MAT) credit is recognised as
an asset only when and to the extent there is convincing
evidence that the Company will pay normal income
tax during the specified period. In the year in which
the MAT credit becomes eligible to be recognised as
an asset, in accordance with the provisions contained
in the Guidance Note on Accounting for Credit
Available under Minimum Alternate Tax, issued by
the ICAI, the said asset is created by way of a credit
to the Statement of Profit and Loss and shown as
'MAT Credit Entitlement'. The Company reviews the
same at each Balance Sheet date and writes down
the carrying amount of MAT Credit Entitlement to the
extent there is no longer convincing evidence to the
effect that the Company will pay normal income tax
during the specified period.
Advance taxes and provisions for current income taxes
are presented in the balance sheet after off-setting
advance tax paid and income tax provision arising in
the same tax jurisdiction and the intention is to settle
the asset and liability on net basis.
Basic earnings per share are calculated by dividing
the net profit or loss (excluding other comprehensive
income) for the period attributable to equity
shareholders by the weighted average number
of equity shares outstanding during the period.
The weighted average number of equity shares
outstanding during the period is adjusted for events
such as bonus issue, bonus element in a right issue,
share split and reserve share splits (consolidation
of shares) that have changed the number of equity
shares outstanding, without a corresponding change
in resources. For the purpose of calculating diluted
earnings per share, the net profit or loss (excluding
other comprehensive income) for the period
attributable to equity shareholders and the weighted
average number of shares outstanding during the
period are adjusted for the effects of all dilutive
potential equity shares.
When items of income and expense within profit or
loss from ordinary activities are of such size, nature or
incidence that their disclosure is relevant to explain
the performance of the enterprise for the period,
the nature and amount of such material items are
disclosed separately as exceptional items.
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