2 Summary of Significant Accounting Policies
The accounting policies set out below have been applied consistently to all periods presented in the financial statements unless
otherwise stated.
i Property, Plant and Equipment (PPE)
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation
and impairment loss, if any. Such cost include purchase price, borrowing cost and any cost directly attributable to bringing assets to its
location and working condition or its intended use. Depreciation on Tangible Assets, PPE is charged on WDV method as per the useful
life prescribed in Part C of Schedule: it of the Companies Act, 2013 and in the manner specified therein. The residual values, useful
lives and methods of depreciation of property plant and equipment are reviewed at each financial year end and adjusted prospectively,
if any. Depreciation on fixed assets added/ disposed off/ discarded during the year is provided on a pro-rata basis with reference to the
month of addition/disposal/discarding.
ii Inventories
Inventories are valued at lower of cost and net realisable value. Cost is determined on a First in First out (FIFO). Cost includes cost of
conversion and other costs incurred in bringing the inventories to their present location and condition. Obsolete, slow moving and
defective inventories are identified and provided for.
Net Realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated
costs necessary to make sale.
iii Finance Cost
Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such
assets. A Qualifying asset is one that necessarily takes a substantial periost of time to get ready for its intended use or sale.AII other
borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred._^_
iv Revenue Recognition
Revenue is recognised to the extent 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 of payment and excluding taxes or duties collected on behalf of the
government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all
the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
However, Goods and Service Tax (GST) is not received by the Company on its own account. Rather, it is tax collected on value added
to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.
Sale of products
Revenue from the sale of products is recognised when the significant risks and rewards of ownership of the products have passed to
the buyer, usually on delivery of the products. Revenue from the sale of products is measured at the fair value of the consideration
received or receivable, net of returns and allowances, trade discounts and volume rebates.
Interest Income
For all financial assets measured either at amortised cost or at fair value through other comprehensive income, interest income is
recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts
over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial
asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
v Employee Benefit
Expenses
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees
are recognised as an expense during the period when the employees render the services.
vi Foreign currencies
Company has not made any foreign transaction during the year.
vii Taxes on Income
Tax on Income comprises current tax. It is recognised in statement of profit and loss except to the extent that it relates to a business
combination, or items recognised directly in equity or in other comprehensive income.
Current tax
Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance
with the provisions of the relevant tax laws and based on the expected outcome of assessments / appeals. Current income tax assets
and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Management 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
Deferred tax is recognized for the future tax consequences of deductible temporary differences between the carrying values of assets
and liabilities and their respective tax bases at the reporting date, using the tax rates and laws that are enacted or substantively
enacted as on reporting date. Deferred tax liability are generally recorded for all temporary timing differences.
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