1. (B) ACCOUNTING POLICIES
The significant accounting policies applied by the Company in the preparation of its financial statements are listed
below. Such accounting policies have been applied consistently to all the periods presented in these financial
statements.
(a) (i) Statement of compliance
The Financial Statements have been prepared as a going concern in accordance with Indian Accounting Standards
(Ind AS) notified under Section 133 of the Companies Act, 2013 ("the Act) including the rules notified under the
relevant provisions of the Companies Act, 2013 in the format prescribed by Schedule III (as amended) vide MCA
Notification GSR 207(E) dated 24.03.2021.
(b) (ii) Basis for preparation
The Financial Statements have been prepared under the historical cost convention with the exception of certain
assets and liabilities carried at fair values by Ind AS. The Assets and Liabilities have been classified as
Current/Non-Current as per the Companies normal operating cycle and other criteria set out in Schedule III to
the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for
processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as
12 months for the purpose of Current/Non-Current classification of assets and liabilities. The material accounting
policy information used in preparation of the audited standalone financial statements have been discussed in the
respective notes.
(c) Property, plant and equipment - Tangible Assets
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discounts and rebates less
accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and
any cost directly attributable to bringing the assets to its working condition for its intended use, net changes on
foreign exchange contacts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the entity and the cost
of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Depreciation
i. Depreciation is provided on the straight-line method over the estimated useful lives of the assets as per the
rates in the manner prescribed under the Schedule II to the Companies Act 2013.
ii. Gains and losses on disposals are determined by comparing proceeds with carrying amount and such gains
or losses are recognized as income or expense in the statement of profit and loss.
iii. Cost of items of Property, plant and equipment not ready for intended use as on the balance sheet date is
disclosed as capital work in progress. Advances given towards acquisition of Property, Plant and Equipment
outstanding at each balance sheet date are disclosed as Capital Advance under Other non-current assets.
(d) Impairment
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal
and value in use. Non-financial assets that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
(e) Leases
In accordance with Ind AS 116, as lessee for lease with a term of more than 12 months, the Company recognises
a 'right-of-use' asset at cost for the lease term at the commencement date and a lease liability representing its
obligation to make future lease payments. The 'Right-of-use' asset is depreciated using the straight-line method
from the commencement date over the shorter of lease term or useful life of 'right-of-use' asset. The lease payment
is discounted using the lessee's incremental borrowing rate as there is no interest rate implicit in the lease. Short
term lease and lease of low value is treated as expense on straight line basis or other systematic basis over the
lease term.
(f) Financial Instruments
Financial Assets and Financial Liabilities are recognized when the Company becomes a party to the contractual
provisions of the relevant instrument. Since the transaction price does not differ significantly from the fair value
of the financial asset or financial liability, the transaction price is assumed to be the fair value on initial recognition.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
are added to or deducted from the fair value on initial recognition of financial assets or financial liabilities.
Purchase and sale of financial assets are recognized using trade date accounting.
i. Financial Assets
Financial assets include Loans, Advances, Security Deposits, Cash and Cash Equivalents etc which are classified
for measurement at amortised cost.
Management determines the classification of an asset at initial recognition depending on the purpose for which
the assets were acquired. The subsequent measurement of financial assets depends on such classification.
Impairment:
The Company assesses at each reporting date whether a financial asset (or a group of financial assets) is tested
for impairment based on available evidence or information. Expected credit losses are assessed and loss
allowances recognized if the credit quality of the financial asset has deteriorated significantly since initial
recognition.
De-recognition:
Financial assets are derecognized when the right to receive cash flow from the assets has expired, or has been
transferred and the company has transferred substantially all of the risks and rewards of ownership.
Income recognition:
Interest income on loans is recognized in the Statement of profit and loss using the effective interest method on
time proportion basis.
ii. Financial Liabilities:
Borrowings, Trade Payables and other Financial Liabilities are initially recognized at the value of the respective
contractual obligations. They are subsequently measured at amortised cost using the effective interest method,
wherever applicable.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments (including all fees and points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability.
For trade and other payables maturing within one year from the balance sheet date, the carrying amounts
approximate fair value due to short maturity of these instruments.
De-recognition:
Financial liabilities are derecognized when the liability is extinguished, that is, when the contractual obligation is
discharged, cancelled and on expiry.
(g) Revenue
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured regardless of when the payment is being made. Revenue is measured at the
fair value of the consideration received or receivable taking into account contractually defined terms.
i. Interest Income
Interest income is accrued on time proportion basis, by reference to the principal outstanding and the effective
interest rate applicable.
(h) Cash and cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash in hand,
demand deposits with banks, short term balances (with an original maturity of three months or less from date of
acquisition).
(i) Taxes on income
Income tax expense represents the sum of the current tax and deferred tax.
Current tax charge is based on taxable profit for the year. Taxable profit differs from profit as reported in the
Statement of profit and loss because Some items of income or expense are taxable or deductible in different years
or may never be taxable or deductible. The company's liability for current tax is calculated using Indian tax rates
and laws that have been enacted by the reporting date.
Current 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.
The company periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences
between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used
in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary
differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilized. Deferred tax is calculated at the tax
rates that are expected to apply in the period when the liability is settled or the asset realized, based on tax rates
that have been enacted or substantively enacted by the reporting date.
Deferred income tax assets and liabilities are off set against each other and the resultant net amount is presented
in the balance sheet if and only when the company currently has a legally enforceable right to set off the current
income tax assets and liabilities.
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Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in
other comprehensive income or directly in equity. In this case the tax is also recognized in other comprehensive
income or directly in equity respectively.
(j) Employee Benefits
(i) Short term employee Benefits
Short term employee benefits are expensed as the related service is provided. A liability is recognized for the
amount expected to be paid if the company has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.
(ii) Post Employment Benefits
Defined Contribution Plans
The company's defined contribution plans are employees provident fund and employees' pension scheme (under
the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952) since the company
has no further obligation beyond making the contributions. The company's contributions to these plans are
charged to the Statement of Profit and loss as incurred.
Defined Benefits Plans
Liability for Defined Benefit plans is provided on the basis of actual valuation as at the balance sheet date.
Gratuity
The provision for Gratuity is made as at the balance sheet date on actual calculation.
(k) Earnings Per Share
Basic earnings per share is calculated by dividing the profit for the period attributable to the owners of company
by the weighted average number of equity shares outstanding during the period. The weighted average number
of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus
shares, other than the conversion of potential equity shares that have changed the number of equity shares
outstanding without a corresponding change in resources. For the purposes of calculating diluted earnings per
share the profit for the period attributable to the owners of the company and the weighted average number of
shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
(l) Exceptional items
When items of income or expense are of such nature, size and incidence that their disclosure is necessary to
explain the performance of the company for the year, the company makes a disclosure of the nature and amount
of such items separately under the head "exceptional items."
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