A. Basis of Preparation of Financial Statements
The financial statements have been prepared on the historical cost basis except for following assets and liabilities which have been
measured at fair value amount:
i) Certain Financial Assets and Liabilities i.e. Inventories and Investments.
ii) Defined benefit plans
B. Property, Plant & Equipment and Depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses if any. Depreciation on
property, plant and equipment is provided on straight line method based on useful life of assets as prescribed in Schedule II to the
Companies Act, 2013.
C. Leases
Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership
to the lessee. All other leases are classified as operating leases. Assets held under finance leases are initially recognised as assets of
the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The
corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Operating lease payments are
recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another
systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
D. Inventories (Securities)
Items of inventories (securities) are measured at lower of cost and net realisable value.
E. Impairment of Non-Financial Assets - Property, Plant and Equipment
Property, plant and equipment with finite life are evaluated for recoverability whenever there is any indication that their carrying
amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and
the value-in- use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent
of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset
belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the
asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Profit and Loss. The
impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
F. Foreign Currency Transactions
The functional currency is Indian rupee (Rs.) Transactions denominated in foreign currencies are recorded at the exchange rate
prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Statement of
Profit and Loss except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted
to the carrying cost of such assets.
G. Investments
The Company has accounted its investments in unquoted equities at cost or at fair market value.
H. Revenue Recognition
Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed. Interest
income from a financial asset is recognised using effective interest rate method. Dividend income is accounted for when the right to
receive it is established.
I. Employee Benefits
The Company's contribution to Provident fund is charged to the Statement of Profit and Loss. The Gratuity liability, which is a defined
benefit plan, there is an adequate provision for the same in the Books of Accounts as per the Management view as on balance sheet
date, hence no actuarial valuation has been carried out and no provision has been made accordingly. Re-measurement of defined
benefit plans in respect of post-employment if any are charged to the Other Comprehensive Income. Employees are entitled to avail
leave instead of leave encashment.
J. Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any)
by the weighted average number of equity shares outstanding during the year.
K. Accounting for Taxes on Income
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based
on tax rates and laws that are enacted or substantively enacted at the Balance sheet date. Deferred tax is recognised on temporary
differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each
reporting period.
|