| Disclosure of employee benefits explanatory 19. Employees Benefits a.Short Term Employee Benefit Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short- term employee benefits and are expensed in the period in which the employee renders the related service. b.Post Employment Benefit Defined contribution plans: The Company's state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under such schemes is recognised in the statement of Profit and loss during the period in which the employee renders the related service. Further, the Company started to provide Gratuity benefits for the employees and Gratuity valuation is provided according to actuarial valuation taken according to the Accounting Standard - 15. The provision for Gratuity is recognised in the statement of Profit and Loss during the period. Disclosure of accounting policies, change in accounting policies and changes in estimates explanatorySignificant accounting Policiesand Notes on Accounts 1.Basis of Preparation of Financial Statements (i)The financial statements of the Company have been brpared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has brpared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (accounts) Rules, 2014. (ii)The financial statements have been brpared on an accrual basis and under the historical cost convention except for certain items which are measured at fair values. 2.Use of Estimates The brparation of financial statement 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 results and estimates are recognized in the period in which the results are known/ materialized. 3.Revenue Recognition (i)The Company recognizes revenue from sale of goods when the goods are delivered and titles have been passed at which time all the following conditions are satisfied:
a.The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
b.The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
c.The amount of revenue can be measured reliably;
d.It is probable that the economic benefits associated with the transaction will flow to the Company e.Thecosts incurred or tobe incurred in respect of the transaction can be measured reliably. (ii)Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists.
(iii)Expenses and Income considered payable and receivable respectively are accounting for on accrual basis.
(iv)Income on Turnkey Contract (including erection charges) is accounted for on the basis of billing made by the customer on mutually agreed billing schedule.4.Fixed Assets Fixed Assets are stated at cost net of eligible CENVAT/GST Input, less accumulated debrciation. Cost of acquisition is inclusive of inward freight, duties, taxes, and incidental expenses related to acquisition. Expenses capitalized also include applicable borrowing costs. Subsequent expenditure related to an item of Tangible assets are added to its book value only when if they increase the future benefits from the existing asset beyond its brviously assessed standard of performance. 5.Debrciation Debrciation on the assets has been provided on WDV Method as per the estimates of useful life brscribed under Schedule II to the Companies Act, 2013. 6.Impairment of Assets An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. 7. Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rate brvailing on the date of transaction or at the rates covered by the forward contracts. Monetary assets & liabilities denominated in foreign currency are translated into Indian Rupees at the rate of exchange brvailing at the balance sheet date. Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction. Exchange difference arising at the settlement of monetary items or on reporting the company's monetary items at the rate different from those at which they were initially recorded during the period or reported in brvious financial statement are recognized as income or as expenses in the period in which they arise. 8.Investments Long term Investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary in opinion of the management. 9.Inventories Cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their brsent location and condition. Raw materials, Stores & Spares are valued at cost, determined on the basis of the FIFO method. Finished goods are valued at the lower of cost and net realizable value, cost for this purpose has been calculated on the basis of sales price less margin. 10.Borrowing Costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as a 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 revenue. 11.Provision for Current Tax & Deferred Tax Provision for current tax is made, which is likely to arise on the results for the year at the current rate of tax in accordance with the provisions of the Income Tax Act, 1961, The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future. Deferred tax is computed in accordance with Accounting Standard 22- "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, 12.Derivative Instruments Risk associated with fluctuation in the price of raw material and currency is minimized by hedging on future market. The result of metal and currency hedging contracts, transactions are treated in profit & loss account as income or expenditure as the case may be. 13. Provision, Contingent Liabilities and Contingent Assets A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a brsent obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements 14. Cash and Cash equivalents Cash and Cash equivalents for the purpose of cash flow statements comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. 15. Earning Per Share The company reports basic and diluted earnings per share (EPS) in accordance with the Accounting Standard specified under Section 133 of the Companies Act read with Rule 7 of the Companies (Accounts) Rules, 2014. The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The diluted EPS has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the end of the year. 16. Government Grant The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with and the grants will be received. Government grants related to assets are treated as deferred income and are recognized in the Statement of Profit & Loss on as systematic and rational basis over the useful life of the assets. Government grants related to revenue are recognized on systematic basis in net profit in the statement of Profit & Loss over the periods necessary to match them with the related costs which they are intended to compensate. 17. Operating Cycle Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and no current. 18. Leases Operating leases: Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the lease item, are classified as operating lease. A. Lease rentals on assets taken under operating lease are charged to the Statement of Profit and Loss on a straight line basis over the term of the relevant lease.B. Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognised on a straight line basis over the term of the relevant lease. 19. Employees Benefits a.Short Term Employee Benefit Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short- term employee benefits and are expensed in the period in which the employee renders the related service. b.Post Employment Benefit Defined contribution plans: The Company's state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under such schemes is recognised in the statement of Profit and loss during the period in which the employee renders the related service. Further, the Company started to provide Gratuity benefits for the employees and Gratuity valuation is provided according to actuarial valuation taken according to the Accounting Standard - 15. The provision for Gratuity is recognised in the statement of Profit and Loss during the period. 20. EPC Contract (i) Revenue The Company, in its contract with customers, promises to transfer distinct services to its customers which may be rendered in the form of engineering, procurement and construction (EPC) services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could range from cost plus fee to agreed unit price to lump-sum arrangements. At each reporting date, revenue is accrued for costs incurred against work performed and work certified that have been invoiced.(ii) Expenses Expenses in relation to EPC contract is accounted for in books of account on the basis of bill raised by the sub-contractor and work certified. Changes in accounting estimate and accounting policy explanatorySignificant accounting Policiesand Notes on Accounts 1.Basis of Preparation of Financial Statements (i)The financial statements of the Company have been brpared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has brpared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (accounts) Rules, 2014. (ii)The financial statements have been brpared on an accrual basis and under the historical cost convention except for certain items which are measured at fair values. 2.Use of Estimates The brparation of financial statement 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 results and estimates are recognized in the period in which the results are known/ materialized. 3.Revenue Recognition (i)The Company recognizes revenue from sale of goods when the goods are delivered and titles have been passed at which time all the following conditions are satisfied:
a.The Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
b.The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
c.The amount of revenue can be measured reliably;
d.It is probable that the economic benefits associated with the transaction will flow to the Company e.Thecosts incurred or tobe incurred in respect of the transaction can be measured reliably. (ii)Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists.
(iii)Expenses and Income considered payable and receivable respectively are accounting for on accrual basis.
(iv)Income on Turnkey Contract (including erection charges) is accounted for on the basis of billing made by the customer on mutually agreed billing schedule.4.Fixed Assets Fixed Assets are stated at cost net of eligible CENVAT/GST Input, less accumulated debrciation. Cost of acquisition is inclusive of inward freight, duties, taxes, and incidental expenses related to acquisition. Expenses capitalized also include applicable borrowing costs. Subsequent expenditure related to an item of Tangible assets are added to its book value only when if they increase the future benefits from the existing asset beyond its brviously assessed standard of performance. 5.Debrciation Debrciation on the assets has been provided on WDV Method as per the estimates of useful life brscribed under Schedule II to the Companies Act, 2013. 6.Impairment of Assets An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. 7. Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rate brvailing on the date of transaction or at the rates covered by the forward contracts. Monetary assets & liabilities denominated in foreign currency are translated into Indian Rupees at the rate of exchange brvailing at the balance sheet date. Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction. Exchange difference arising at the settlement of monetary items or on reporting the company's monetary items at the rate different from those at which they were initially recorded during the period or reported in brvious financial statement are recognized as income or as expenses in the period in which they arise. 8.Investments Long term Investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary in opinion of the management. 9.Inventories Cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their brsent location and condition. Raw materials, Stores & Spares are valued at cost, determined on the basis of the FIFO method. Finished goods are valued at the lower of cost and net realizable value, cost for this purpose has been calculated on the basis of sales price less margin. 10.Borrowing Costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as a 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 revenue. 11.Provision for Current Tax & Deferred Tax Provision for current tax is made, which is likely to arise on the results for the year at the current rate of tax in accordance with the provisions of the Income Tax Act, 1961, The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable certainty that these would be realized in future. Deferred tax is computed in accordance with Accounting Standard 22- "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, 12.Derivative Instruments Risk associated with fluctuation in the price of raw material and currency is minimized by hedging on future market. The result of metal and currency hedging contracts, transactions are treated in profit & loss account as income or expenditure as the case may be. 13. Provision, Contingent Liabilities and Contingent Assets A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a brsent obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements 14. Cash and Cash equivalents Cash and Cash equivalents for the purpose of cash flow statements comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. 15. Earning Per Share The company reports basic and diluted earnings per share (EPS) in accordance with the Accounting Standard specified under Section 133 of the Companies Act read with Rule 7 of the Companies (Accounts) Rules, 2014. The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The diluted EPS has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the end of the year. 16. Government Grant The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them shall be complied with and the grants will be received. Government grants related to assets are treated as deferred income and are recognized in the Statement of Profit & Loss on as systematic and rational basis over the useful life of the assets. Government grants related to revenue are recognized on systematic basis in net profit in the statement of Profit & Loss over the periods necessary to match them with the related costs which they are intended to compensate. 17. Operating Cycle Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and no current. 18. Leases Operating leases: Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the lease item, are classified as operating lease. A. Lease rentals on assets taken under operating lease are charged to the Statement of Profit and Loss on a straight line basis over the term of the relevant lease.B. Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognised on a straight line basis over the term of the relevant lease. 19. Employees Benefits a.Short Term Employee Benefit Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short- term employee benefits and are expensed in the period in which the employee renders the related service. b.Post Employment Benefit Defined contribution plans: The Company's state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under such schemes is recognised in the statement of Profit and loss during the period in which the employee renders the related service. Further, the Company started to provide Gratuity benefits for the employees and Gratuity valuation is provided according to actuarial valuation taken according to the Accounting Standard - 15. The provision for Gratuity is recognised in the statement of Profit and Loss during the period. 20. EPC Contract (i) Revenue The Company, in its contract with customers, promises to transfer distinct services to its customers which may be rendered in the form of engineering, procurement and construction (EPC) services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could range from cost plus fee to agreed unit price to lump-sum arrangements. At each reporting date, revenue is accrued for costs incurred against work performed and work certified that have been invoiced.(ii) Expenses Expenses in relation to EPC contract is accounted for in books of account on the basis of bill raised by the sub-contractor and work certified. |