SIGNIFICANT ACCOUNTING POLICIES
1) Basis of Preparation of Financial Statements
The financial statements are prepared in accordance with Indian Accounting Standard ( Ind AS) notified under the Companies( Indian Accounting Standards) Rules 2015 and as prescribed under section 133 of the Companies Act ,2013. The Accounting policies are consistent form one period to another. The Company has followed The Income Computation and Disclosure Standard as notified by the Central Board of Direct Taxes.
2) Use of Estimates
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.
3) Fixed Assets
a. ) Tangible Fixed Assets:
Fixed Assets are stated at cost net of recoverable taxes and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.
b. ) Intangible Assets:
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalized.
4) Depreciation
Depreciation on fixed assets is provided to the extent of depreciable amount on Straight Line method (SLM) at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013. The useful life has been reworked so as to arrive at the revised rates of depreciation for due compliance of the new provisions of depreciation.
In respect to assets sold / discarded / scrapped during the year depreciation is calculated on a pro -rata basis considering the number of days for which the Fixed Assets is used during the current financial year. Thereafter the sales proceeds is reduced from the cost of the assets to determine the gain or loss on a particular fixed asset.
Depreciation on idle assets is charged until the assets are fully depreciated or the assets are classified as Non-Current Assets Held for Sale.
5. Non-Current Assets held for sale and discontinued operations.
The assets are classified as held for sale or discontinued operations only when the management intends to sell it in a distant future. For the sale to be highly probable
i. The appropriate level of management must be committed to a plan to sell the assets, to locate the buyer and the said plan must have been initiated.
ii. The assets must be actively marketed for sale at a price that is reasonable in relation to its current fair value.
iii. The sale should be expected to qualify for recognition as a completed sale within one year from the date of classification.
6. Investments
Investments are valued and presented as per Ind AS 109 read with Ind AS 113. The profit or loss determined as per Ind AS has been considered as Other Comprehensive Income and has been reflected in the Profit and Loss account and the same have been also reflected in the Balance Sheet by creating a reserve in Other Equity.
7. Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection and the same is in accordance with the Income Computation and Disclosure Standards (ICDS -IV) and Ind AS 115 as below._
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Disclosure Requirements
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Remarks
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In a transaction involving sales of goods, total amount not recognized as revenue during previous year due to lack of reasonably certainty of its ultimate collection along with nature of uncertainty.
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NA.
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The amount of revenue from service transactions recognized as revenue during the previous year.
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NIL
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The method used to determine stage of completion of service transaction in progress.
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Not applicable-Company recognizes revenue from service contracts with duration of less than 90 days when the rendering of services under than contract is completed.
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For service transaction in progress at the end of the previous year. a) Amount of cost incurred and recognized profit less recognized losses up to end of the previous year. b) Amount of advances received.3) Amount of retentions
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Not Applicable.
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8. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss account.
9. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.
10. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. The above disclosures if any are made in accordance with Income Computation and Disclosure Standards and Ind AS.
11. Event Occurring after the date of Balance Sheet
There is no important events occurred after the date of the balance sheet which has a material effect on the profitability or the position of the company. The said impact on inventories, valuation of financial instruments, recognition of revenue, provision, contingent liabilities & Assets, going concern assessment, borrowing cost, Provision of taxes, lease accounting have been duly assessed and wherever required has been disclosed appropriately.
12. Going Concern
The financial statement has been prepared assuming that the concern will continue as going concern.
13. Earnings Per Share.
Earnings per share is calculated on distributable profits to equity shareholders after providing for the preference share dividend and any other any item of income or expense which is otherwise required to be recognized in profit or loss in accordance with Indian Accounting Standards is debited or credited to securities premium account/other reserves, if any. This is in accordance with the Ind AS
33.
14. Preliminary Expenses & Pre-operative expenses.
Preliminary expenses are capitalized and is written off over a period of 5 years from the date company commences its business activities as per section 35D of the Income Tax Act 1961. Other expenses which are not termed as preliminary expenses are capitalized to the relevant fixed assets as this are the expenses which are incurred to bring the assets in operating conditions.
15. Employee Benefits
The statutory obligations of the company such as EPF, Gratuity, ESIC have been duly recognized on accrual basis and has been charged to Profit & Loss Account.
16. General
a) In the opinion of the Board of Directors, the value on realization of current Assets, Loans and Advances and Receivables if realized in the ordinary course of business, shall not be less than the amount at which they are stated in the Balance Sheet and Receivables and Loans and Advances including Capital Advances are considered goods and recoverable on an ongoing basis.
b) The balances of Sundry Creditors, Deposits Given, Loans and Advances and Receivables are subject to confirmation.
c) Figures have been regrouped and rearranged wherever found necessary.
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