Significant Accounting Policies
1. Basis of accounting:-
These financial statements have been prepared in accordance with the Generally Accepted Accounting
Principles in India (Indian GAAP) including the Accounting Standards notified under Section 133 of the
Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of
the Companies Act, 2013.
The financial statements have been prepared under the historical cost convention on accrual basis.
2. Use of Estimates
The preparation of financial statements in conformity with Indian GAAP requires the management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of the reporting period.
Although these estimates are based on the management's best knowledge of current events and actions,
uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment
to the carrying amounts of assets or liabilities in future periods.
3. Revenue Recognition: -
Expenses and Income considered payable and receivable respectively are accounted for on accrual basis.
As per AS 9, revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured.
4. Property, Plant & Equipment :-
Fixed assets are stated at cost, after reducing accumulated depreciation and impairment up to the date of the
Balance Sheet. Direct costs are capitalized until the assets are ready for use and include financing costs relating
to any borrowing attributable to acquisition of construction of those fixed assets which necessarily take a
substantial period of time to get ready for their intended use.
"Capital work in progress" includes the cost of fixed assets that are not yet ready for their intended use.
Intangible assets, if any, are recorded at the consideration paid for acquisition of such assets and are carried at
cost less accumulated amortization and impairment.
Gains or losses arising from derecognition of fixed assets are measured as the difference between the net
disposal proceeds and the carrying amount of the asset at the time of disposal and are recognized in the
statement of profit and loss when the asset is derecognized.
5. Depreciation :-
Depreciation on Fixed Assets is provided to the extent of depreciable amount on the Written down Value
(WDV) Method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the
Companies Act, 2013.
During the year, certain assets reached the end of their useful lives as specified under the Companies Act, 2013.
Consequently, no depreciation has been charged on these assets from the date they completed their useful life.
Depreciation on assets acquired/sold during the year is recognized on a pro-rata basis to the statement of
profit and loss till the date of acquisition/sale.
During the year, depreciation has been charged in compliance with the provisions of the Companies Act, 2013,
applying the useful life and residual value criteria prescribed therein. Pursuant to conversion of the firm into a
company, certain assets were brought in and depreciation was calculated on them using an effective rate based
on their remaining useful lives and 5% residual value at the time of conversion.
The carrying amount of assets is reviewed at each balance sheet date 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 amount. The recoverable amount is the greater of the assets, net selling price and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific
to the asset after impairment, depreciation is provided on the revised carrying amount of the asset over its
remaining useful life.
6. Foreign currency Transactions:
There are no foreign currency transactions.
7. Investments:
No investments are held by the company.
8. Inventories :-
There are no Inventories in the firm.
9. Borrowing cost:-
Borrowing costs that are attributable to the acquisition or construction of the qualifying assets are capitalized
as part of the cost of such assets. A qualifying assets is one that necessarily takes a substantial period of time
to get ready for its intended uses or sale. All other borrowing costs are charged to revenue in the year of
incurrence. The amount of borrowing cost capitalized during the year is NIL.
10. Retirement Benefits:-
The retirement benefits are accounted for as and when liability becomes due for payment.
11. Taxes on Income:-
Tax expenses comprise current and deferred tax. Current Income tax is measured at the amount expected
to be paid to the tax authorities in accordance with the Income Tax Act, 1961. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Deferred Income taxes reflect the impact of timing differences between taxable income and accounting income
originating during the current year and reversal of timing differences for the earlier years. Deferred tax is
measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred
tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible
timing differences 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. In situations where the company has
unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is
virtual certainty supported by convincing evidences that they can be realized against future taxable profits.
Deferred tax assets are reviewed at each reporting date. Minimum Alternate Tax paid in a year is charged to
the statement of profit and loss as current tax. The company recognizes MAT credit available as an asset only to
the extent that there is convincing evidence that the company will pay normal income tax during the specified
period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company
recognizes MAT credit as an asset in accordance with the guidance note on accounting for credit available in
respect of minimum alternate tax under the income tax act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as "MAT Credit Entitlement." The company reviews the "MAT credit
entitlement" at each reporting date.
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