23) Significant accounting policies
(a) Statement of compliance
These financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as Ind AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules as amended time to time.
(b) Basis of preparation
The financial Statements have been prepared on historical cost basis, except for certain financial instruments which are measured at fair value at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
(C) Use of estimates and judgements
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates and judgements that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expense for the periods presented.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected.
Impairment of Investment
The company reviews its carrying value of the Investments carried at amortised cost annually, or more frequently when there is indication for impairment. Where the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Provisions and contingent liabilities
A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements.
(d) Revenue recognition
Sale of Goods:-
Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer , which generally coincides with the delivery of goods to customers.
Other Income:-
Interest income is accounted for accrual basis.
(e) Leases
Lease arrangement where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating lease. Operating Lease payments are recognised on a straight line basis over the lease term in the statement of profit & Loss, unless the lease agreement explicitly states that increase is on account inflation.
(f) Cost Recognition
Costs and expenses are recognised when incurred and have been classified according to their nature.
(g) Foreign currency
The functional currency of the Company is Indian rupee (s).
Income and expenses in foreign currencies are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses arising on settlement and restatement are recognised in the statement of profit and loss.
(h) Income taxes Deferred income taxes
Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount , except when the deferred income tax arises from initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
(i) Financial instruments
Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
(j) Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation (other than freehold land) and impairment loss, if any.
Depreciation is provided for property, plant and equipment so as to expense the cost less residual value over their estimated useful lives based on technical evaluation. The estimated useful lives and residual value are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
Depreciation is not recorded on capital work 3in-progress until construction and installation is complete and the asset is ready for its intended use.
(k) Intangible assets
Intangible assets purchased are measured at cost as of the date of acquisition, as applicable, less accumulated amortization and accumulated impairment, if any.
(l) Impairment
(i) Financial assets (other than at fair value)
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. In determining the allowances for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix. For all other financial assets, expected credit losses are measured at an amount equal tote 12-months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
(ii) Non —financial assets Tangible and intangible assets
Property, plant and equipment and intangible assets 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 is determined on an individual asset basis unless the asset does not generate cash flows that 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.
(m) Employee benefits
Salaries, wages, bonus, compensated absences and all other amount payable to employees in respect of services rendered as per their employment terms under contract of service / employment. 8Staff Welfare9 expenses include general expenses pertaining to the misc, benefit of the employees. Employee benefits include provident fund, E.S.I and compensated absences which were irregular in payment.
(n) Cash Flow Statement
Cash Flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transaction of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash flows from operating, investing and financing activities of the company are segregated based on the available information.
(o) Earning 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 . Diluted earnings per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares.
(P) Related party Disclosures:
List of Related parties in accordance with provisions of Ind AS 24 <Related Party Disclosures= and the Companies Act, 2013, Subsidiary company, Company’s Directors, Members of the Company’s Management and company secretary and considered as key Management Personnel. List of Key Management as follows:-
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