2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Statement of compliance
The financial statements are prepared in accordance with and are in compliance, in all material aspects with Indian
Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read along with
Companies (Indian Accounting Standards) Rules, as amended and other relevant provisions of the Act. The
presentation of the Financial Statements is based on Ind AS Schedule III of the Companies Act, 2013.
2.2 Basis of preparation:
The financial statements have been prepared & presented under the historical cost convention, on the accrual basis of
accounting and comply with the Accounting Standards notified under the relevant provisions of the Companies Act,
2013 and generally accepted accounting principles in India, to the extent applicable.
Accounting policies have been consistently applied except where otherwise stated or where a newly issued
accounting standard is initially adopted or a revision in the accounting standard requires change in accounting policy
hitherto in use. The financial statements are presented in Indian rupees rounded off to lacs rupee.
2.3 Use of estimates and judgment's:
The preparation of financial statements in conformity with Generally accepted accounting principles requires
management to make judgements, estimates and assumptions that affect the reported amount of assets, liabilities,
revenues and expenses and disclosures relating to contingent liabilities and assets as at the balance sheet date and
the reported amounts of income and expenses during the year. Difference between the actual amounts and the
estimates are recognized in the year in which the events become known / are materialized.
2.4 Current / non-current classification
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle
and other criteria set out in the Schedule III of Companies Act, 2013.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash
equivalents. Based on the above definition and the nature of business, the Company has ascertained its operating
cycle as 12 months for the purpose of current - non- current classification of assets and liabilities.
2.5 Fixed Assets:
Tangible Assets
Tangible Assets are stated at acquisition cost net of recoverable taxes, trade discounts and rebates, less accumulated
depreciation and accumulated impairment losses, if any.
Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future
benefits from the existing asset beyond its previously assessed standard of performance.
A fixed asset is eliminated from the financial statements on disposal or when no further benefit is expected from its
use and disposal.
Losses arising from retirement and gains or losses arising from disposal of fixed assets which are carried at cost are
recognised in the Statement of profit and loss.
Tangible fixed assets under construction and / or not ready for its intended use are disclosed as capital work-in¬
progress. Capital Work-in-progress includes estimates of work completed, as certified by management
Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/depletion
and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to
bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and
adjustments arising from exchange rate variations attributable to the intangible assets.
2.6 Depreciation
Depreciation on tangible fixed assets is provided based on useful life of the assets as prescribed in Schedule II to the
Companies Act, 2013 using the Written down Value method, which, in management's opinion, reflect the estimated
useful economic lives of these fixed assets.
The useful lives are reviewed by the management at each financial year-end and revised, if appropriate. In case of a
revision, the unamortised depreciable amount is charged over the revised remaining useful life.
As per opinion of the management during the year company have not been charged any depreciation on
Research and Development in current year.
2.7 Impairment of Assets
The carrying amounts of assets are reviewed to see if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable value. An
impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of
recoverable amount
2.8 Revenue Recognition
Revenue is recognized to the extent that it is probable that economic benefit will flow to the Company and the
revenue can be reliably measured.
Revenue from operations includes sale of goods, services including GST and net of goods return.
Revenue is recognised only when risks and rewards incidental to ownership are transferred to the customer, it can be
reliably measured and it is reasonable to expect ultimate collection.
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the interest
rate applicable. Fixed Deposit Interest is accounted as per statements / documents issued by banks.
Dividend income is accounted for on receipt basis.
2.9 Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current
investments. All other investments are classified as non-current investments.
Long-term investments (including current portion thereof) are carried at cost, less provision for diminution in value
other than temporary determined separately for each individual investment.
Current investments are carried at lower of cost and fair value determined on an individual investment basis.
Any reductions in the carrying amount and any reversals of such reductions are charged or credited to the Statement
of profit and loss.
2.10 Foreign Currency Transactions
Foreign Currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Exchange
difference arising on foreign currency transactions, between the actual rate of settlement and the rate on the date of
the transactions, is charged or credited to the statement of profit and loss.
At the year-end, all monetary assets and liabilities denominated in foreign currency are reinstated at the year-end
exchange rates. Any income or expense on account of exchange difference either on settlement or on translation is
recognised in the Profit and Loss Statement.
2.11 Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of
cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its
intended use or sale. All other borrowing costs are charged to the Profit and Loss A/c in the year in which they are
incurred.
2.12 Taxation
Tax expense comprising current tax and deferred tax are included in the determination of the net profit or loss for the
period.
Provision for current tax is recognised in accordance with the provisions of the Income tax Act, 1961 and is made
based on the tax liability using the applicable tax rates and tax laws after taking credit for tax allowances and
exemptions.
Deferred tax liability or asset for timing differences between taxable income and accounting income i.e. differences
that originate in one period and are capable of reversal in one or more subsequent periods is recognised using the tax
rates and tax laws enacted or subsequently enacted as on the balance sheet date.
Deferred tax assets arising on account of unabsorbed depreciation or carry forward of tax losses are recognized only
to the extent that there is a virtual certainty supported by convincing evidence that sufficient future taxable income
will be available against which such deferred tax assets can be realized. Other deferred tax assets are recognized only
when there is a reasonable certainty of their realization.
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