| a. Basis of preparation of Financial Statements
The accompanying financial statements are prepared in accordance with
Indian Generally Accepted Accounting Principles (GAAP) under the
historical cost convention, on the basis of a going concern basis,
while revenue, expenses, assets and Liabilities accounted/recognized on
accrual basis. GAAP comprises mandatory accounting as prescribed under
Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of
the Companies (Accounts) Rules, 2014, the provisions of the Act (to the
extent notified) and guidelines issued by the Securities and Exchange
Board of India (SEBI) Accounting policies are consistently applied
except where a newly issued accounting standard is initially adopted or
a revision to an existing accounting standard requires a change in the
accounting policy hitherto in use. Management evaluates all recently
issued or revised accounting standards on an ongoing basis.
b. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the required amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates.
c. Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and revenue can be reliably
measured.
d. Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price, freight, duties, taxes and any
attributable cost of bringing the asset to its working condition for
its intended use.
e. Depreciation
Depreciation on fixed assets has been provided on straight-line method
based on useful life of asset specified in Schedule II of the Companies
Act, 2013 on pro-rata basis.
f. Investments
Long term Investments are stated at cost. The short term investments of
the parent company are valued and carried at cost or fair value
whichever is lower. In case of sale of investments, the gain / loss
brought into the books of account.
g. Borrowing costs:
Borrowing costs that are directly attributable to the acquisition or
the construction of a qualifying asset is capitalized for the period
until the asset is ready for its intended use. A qualifying asset is
one that necessarily takes substantial period of time i.e more than 12
months to get ready for intended use. All other borrowing costs are
charged to revenues
h. Income Tax
i. Current tax :
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act, 1961.
ii. Deferred tax :
Deferred income taxes is recognized, subject to the consideration of
prudence on timing differences, being the difference between taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date.
Deferred tax assets are recognized only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such deferred tax assets can be realized. Where
the Company has carry forward of unabsorbed depreciation or tax losses
deferred tax assets are recognized only if it is virtually certain
backed by convincing evidence that such deferred tax assets can be
realized against future taxable profits.
i. Earnings per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
j. Provisions
A Provision is recognized when the Company has a present obligation as
a result of past event i.e 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. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
k. Cash Flow Statement:
Cash Flow Statement has been prepared under indirect method as per the
Accounting Standard-3 "Cash Flow Statement"
l. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The Company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
|