(a) Statement of compliance:
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (“Ind AS")
notified under the Companies (Indian Accounting Standards) Rules, 2015, notified under Sec 133 of The Companies Act,
2013. The Accounting policies have been consistently applied except where a newly issued accounting standard is initially
adopted or a revision to an existing standard requires a change in the accounting policies hitherto in use.
(b) Basis of preparation and presentation:
These financial statements have been prepared on a historical cost basis, except for certain financial instruments and net
defined benefit liability that are measured at fair value at the end of each reporting period, as explained in the accounting
policies below.
(c) Critical accounting estimates and judgments
The preparation of financial statements in conformity with IndAS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, disclosures
of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses for the
years presented. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimates are revised and in any future periods affected.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amounts recognized in the financial statements pertain to:
• Useful lives of property, plant and equipment and intangible assets: The Company has estimated useful life of each
class of assets based on the nature of assets, the estimated usage of the asset, the operating condition of the asset, past
history of replacement, anticipated technological changes, etc. The Company reviews the carrying amount of property,
plant and equipment and Intangible assets at the Balance Sheet date. This reassessment may result in change in
depreciation expense in future periods.
• Impairment testing: Property, plant and equipment and Intangible assets are tested for impairment when events occur
or changes in circumstances indicate that the recoverable amount of the cash generating unit is less than its carrying
value. The recoverable amount of cash generating units is higher of value-in-use and fair value less cost to sell. The
calculation involves use of significant estimates and assumptions which includes turnover and earnings multiples,
growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic
and market conditions.
• Fair value measurement financial instruments: The fair value of financial instruments that are not traded in an
active market is determined by using valuation techniques. This involves significant judgments to select a variety of
methods and make assumptions that arc mainly based on market conditions existing at the Balance Sheet date. Fair
value of financial instruments that are traded in active market is determined from market prices as reduced by
estimated cost of trading.
• Litigation: From time to time, the Company is subject to legal proceedings, the ultimate outcome of each being always
subject to many uncertainties inherent in litigation. A provision for litigation is made when it is considered probable
that a payment will be made and the amount of the loss can be reasonably estimated. Significant judgment is made
when evaluating, among other factors, the probability of unfavorable outcome and the ability to make a reasonable
estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions
made for the changes in facts and circumstances.
(d) Functional currency :
These financial statements are presented in Indian Rupees (INR) which is also the Company’s functional currencies.
(e) Revenue recognition :
Sale of Goods
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which
the Company expects to receive in exchange for those goods. Revenue from the sale of goods is recognised at the point in time when
control is transferred to the customer which is usually on dispatch / delivery ol'goods. based on contracts w ith the customers.
Revenue towards satisfaction of performance obligation is measured based on the transaction price, which is the consideration,
adjusted for volume discounts, price concessions, incentives, and returns, if any. as specilied in the contracts with the customers, Revenue
excludes taxes collected from customers on behalf of the government Accruals for diseounts/incentives and returns are estimated (using
the most likely method) based on accumulated experience and underlying schemes and agreements with customers. Due to the short
nature of credit period given to customers, there is no financing component in the contract.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the
customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the time
value of money. '
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable including net of returns and
allowances, trade discounts, volume rebates and GST
Interest
Interest income is accrued on a time proportion basis using the effective interest rate method.
Dividend
Dividend income is recognized on cash basis.
(f) Employee Benefits (other than for persons engaged through contractors): .
i. Provident Fund: The eligible employees of the Company are entitled to receive benefits under the provident fund, a
defined contribution plan, in which both employees and the Company make monthly contributions at a specified
percentage of the covered employees’ salary (currently 12% of employees' salary), which is recognised as an expense in
the Statement of Profit and Loss during the year. Amounts collected under the provident fund plan are deposited with
Government administered provident fund. The Company has no further obligation to the plan beyond its monthly
contributions. ^
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C ompensated Absences
Entitlement to annual leave is recognised when it accrues to employees. The Company determines the liability for such
accumulated lease at each Balance Sheet date and the same is charged to revenue accordingly
ii. Other Employee Benefits
Other benefits, comprising of discretionary Long Service Awards and Leave Travel Allowances, are determined on an
undiscounted basis and recognised based on the entitlement thereof.
Contribution to defined contribution scheme towards retirement benefit in the form of Superannuation fund is recognized
as expenses in the statement of Profit and loss during the period in which employee renders the related service
(g) Property, Plant and Equipment:
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if
any.
All property, plant and equipment are initially recorded at cost. Cost includes the acquisition cost or the cost of
construction, including duties and taxes (other than those refundable), expenses directly related to the location of assets
and making them operational for their intended use and, in the case of qualifying assets, the attributable borrowing costs
(refer note no. 2(p) below). Initial estimate shall also include costs of dismantling and removing the item and restoring
the site on which it is located.
Subsequent expenditure relating to property, plant and equipment is capitalised only when it is probable that future
economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably.
An assets’ carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater that its estimated recoverable amount.
Depreciation is charged to profit or loss so as to write off the cost of assets (other than freehold land and properties
under construction) less their residual values over their useful lives, using the straight-line method except for asset
situated at Registered Office, which are depreciated by written down value method .The estimated useful lives, residual
values and depreciation method are reviewed at the Balance Sheet date, with the effect of any changes in estimate
accounted for on a prospective basis. The estimated useful lives of the depreciable assets is in accordance with rules
prescribed under part “ C “of Schedule II to the Companies Act. 2013.
Derecognition
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of
property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the
asset and is recognized in the Statement of Profit and Loss.
Capital work in progress represents projects under which the property, plant and equipment’s are not yet ready for their
intended use and are carried at cost determined as aforesaid.
Depreciation
Depreciation on property, plant and equipment is provided so as to write off the cost of assets less residual values over
their useful lives of the assets, using the straight line method as prescribed under PartC of Schedule II to the Companies
• Act 2013 ' ' '
When parts of an item of property, plant and equipment have different useful life, they are accounted for as separate
items (Major Components) and are depreciated over their useful life or over the remaining useful life of the principal
assets whichever is less.
Depreciation for assets purchased/sold during a period is proportionately charged for the period of use, irrespective of
actual operation and uses of the assets in question •;
(h) Intangible Assets: ' y.
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Intangible assets include cost of acquired software and designs, and cost incurred lor development of the Company's
website and certain contract acquisition costs. Intangible assets are initially measured at acquisition cost including any
directly attributable costs of preparing the asset lor its intended use. Internally developed intangibles are capitalised it.
and only if. all the following criteria can be demonstrated: .
i) the technical feasibility and Company's intention and ability of completing the project;
ii) the probability that the project will generate future economic benefits; Ý
iii) the availability of adequate technical financial and other resources to complete the project; and
iv) the ability to measure the development expenditure reliably.
Expenditure on projects which are not yet ready for intended use are carried as intangible assets under development.
Intangible assets with finite lives are amortized over their estimated useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation periods are reviewed and
impairment evaluations are carried out at least once a year. The estimated useful life used for amortising intangible
assets are as under:
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use of disposal.
Gains or losses arising from derecognition of an intangible asset, 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.
(i) Impairment of assets:
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that
are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have
not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized
immediately in the Statement of Profit and Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in
prior years. A reversal of an impairment loss is recognized immediately in Statement of Profit and Loss.
(j) Foreign Currency Transactions :
The Company’s financial statements are presented in INR, which is also the Company’s functional and presentation
currency. Transactions in Foreign currency are recorded at the rate of exchange in force at the time transactions are
effected and exchange difference, if any, on settlement of transaction is recognized in Profit & Loss Account. Monetary
transaction balance other than FCDL as on date of Balance Sheet have been reported at exchange rate on Balance Sheet
date and difference charged to profit & loss account. Forward contract premium paid on forward contracts are amortized to
Profit & loss account over life of such contract
(k) Assets taken on lease:
Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risk and rewards ot
ownership to the lessee. All the other leases are classified as operating leases. ^>T\\ C- * «
Operating lease payments are recognized as expenditure in the Statement of Profit and Loss on a straight-line basis, unless
another basis is more representativ e of the time pattern of benefits received from the use of the assets taken on lease or the
payments of lease rentals are in line with the expected general inflation compensating the lessor for expected inflationary
cost. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are
incurred.
Assets held under finance lease are capitalised at the.inception of the lease, with corresponding liability being recognised
for the fair v alue of the leased assets or, if lower, the present value of the minimum lease payments. Lease payments are
apportioned between the reduction of the lease liability and finance charges in the statement of Profit or Loss so as to
achieve a constant rate of interest on the remaining balance of the liability. Assets held under finance leases are depreciated
over the shorter of the estimated useful life of the asset and the lease term.
(l) Inventories:
Inventories of Raw material, Work-in-progress, finished goods and Stock-in-trade are valued at the lower of cost and net
realizable value. However, Raw material and other items held for use in the production of inventories are not written down
below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Costs incurred in bringing each product to its present location and conditions are accounted for as follows:
• Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location
and condition. Cost is determined on first in, first out basis.
• Finished goods and work in progress: cost includes cost of direct materials and Labours and a proportion of
manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on
first in, first out basis
• Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location
and condition. Cost is determined on weighted average basis.
All other inventories of stores, consumables, project material at site are valued at cost or NRV whichever is low. The stock
of waste is valued at net realisable value.
Net realisable value is the estimated selling price in the ordinary' course of business, less estimated costs of completion and
the estimated costs necessary to make the sale.
(m) Government Grants
Government grants are recognised in the period to which they relate when there is reasonable assurance that the grant will
be received and that the Company will comply with the attached conditions
Government grants are recognised in the Statement of Profit and Loss on a systematic basis over the periods in which the
Company recognises as expenses the related costs for which the grants are intended to compensate.
The company did not receive any government grant during the financial year and previous year.
(n) Income Taxes:
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year.
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity, respectively.
fi) Current tax:
Current 'fax expenses are accounted in the same period to which the revenue and expenses, relate. Provision for
current income tax is made for the tax liability payable on taxable income alter considering tax alloHances.
deductions and exemptions determined in accordance with the applicable tux rates and the prevailing tax taws. •
Current tax assets and current lax liabilities arc offset when there is u legally enforceable right to set oil the
recognised amounts and there is an intention to settle the asset and the liability on a net basis.
(ii) Deferred tax :
Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are
recognised lor deductible and taxable temporary differences arising between the tax base of assets and liabilities and
their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition
ol goodwill, an asset or liability in a transaction that is not a business combination and affects neither accounting nor
taxable profits or loss at the time of the transaction.
Deferred income tax assets are recognised to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be
utilised.
Deferred lax liabilities are generally recognized for all taxable temporary differences except in respect of taxable
temporary differences associated with investments in subsidiaries, associates and interests in joint ventures where the
timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
1 he carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be available to allow all or part of the deferred income tax asset
to be utilised.
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 realized, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the Balance Sheet date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Company intends to settle its current tax assets and liabilities on a net basis.
Minimum Alternative Tax ("MAT") credit is recognized as an asset only when and to the extent there is reasonable
certainty that the Company will pay normal income tax during the specified period. Such asset is reviewed at each
Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a
reasonable certainty to the effect that the Company will pay normal income tax during the specified period.
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