4. Summary of significant accounting policies
a. Use of estimates
Preparation of these financial statements in accordance with Ind AS requires management to make judgements on the
basis of certain estimates and assumptions. In addition, the application of accounting policies requires management
judgement. Estimates are based on the managements view on past events and future development and strategies.
Management reviews the estimates and assumptions on a continuous basis, by reference to past experiences and
other factors that can reasonably be used to assess the book values of assets and liabilities.
h. Presentation of true and fair view
These financial Statements have been prepared by applying Ind AS principles and necessary disclosures have been
made which present a true and fair view of the financial position, financial performance and cash flows of the
Company.
c. Going concern
These financial statements have been prepared on a going concern basis and it is assumed that the company will
continue in operation in the foreseeable future and neither there is an intention nor need to materially curtail the sale
of operations.
d. Accrual hasis
These financial statements, except for cash flow information, have been prepared using the accrual basis of accounting
e. Materiality
Each material class of similar items has been presented separately in these financial Statements.
f. Basis of Measurement
These financial statements have been prepared on an accrual basis, except for certain properties and financial
instruments that have been measured at fair values or revalued amounts as required by the relevant Ind AS.
g. Offsetting
In preparation of these financial Statements, the Company has not offset assets and liabilities or income and expenses,
unless required or permitted by Ind AS.
h. Functional and Presentation Currency
Ind AS 21 requires that functional currency and presentation currency be determined. Functional currency is the
currency of the primary economic environment in which the entity operates. Presentation currency is the currency in
which the financial statements are presented.
These financial statements are presented in Indian Rupee, which is the functional currency and presentation currency
of the Company.
i. Tangible fixed assets (PPE)
Property, plant and equipment (PPE) is recognized when the cost of an asset can be reliably measured and it is
probable that the entity will obtain future economic benefits from the asset.
PPE is measured initially at cost. Cost includes the fair value of the consideration given to acquire the asset (net of
discounts and rebates) and any directly attributable cost of bringing the asset to working condition for its intended
use (inclusive of import duties and non-refundable purchase taxes).
The Company does not have any immovable properties.
j. Depreciation on tangible fixed assets
The depreciable amount of PPE (being the gross carrying value less the estimated residual value) is depreciated over
its useful life as prescribed in Schedule II to the companies Act, 2013 on Written Down value Method.
k. Borrowings costs: -
Interest & commitment charges on borrowings granted by the banks and interest on loans obtained from other
parties are recognized in the Statement of Profit & Loss.
No amounts of borrowing costs have been capitalized during the year.
l. Inventories: -
Inventories are valued in accordance with the method of valuation prescribed by The Institute of Chartered Accountants
of India, at lower of cost or net realizable value. However, there is no inventory as on the balance sheet date.
m. Revenue recognition
Revenue from following transactions is recognized to the extent it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured.
Revenue from export sales is recognized when company neither retain continuing managerial involvement nor effective
control over goods i.e. when delivery of goods is physically given to Customs authorities. Revenue from domestic
sales is recognized when significant risk and rewards associated with goods are transferred by way of delivery to the
customer. The Company collects Goods and Service Tax (GST) on behalf of the government, and, therefore, these are
not economic benefits flowing to the company. Hence, they are excluded from revenue.
n. Taxes on income
Current tax expense is based on the taxable and deductible amounts to be used for the computation of the taxable
income for the current year. A liability is recognized in the balance sheet in respect of current tax expense for the
current and prior periods to the extent unpaid. An asset is recognized if current tax has been overpaid.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be paid to
(recovered from) the taxation authorities, using the tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is provided in full for all temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset
is realized or the liability is settled based on tax rates (and tax laws) that have been enacted or substantively enacted
by the balance sheet date.
A deferred tax asset is recognized for deductible temporary differences to the extent that it is probable that taxable
profit will be available against which the deductible temporary difference can be utilised.
Current and deferred tax is recognized in profit or loss for the period, unless the tax arises from a business combination
or a transaction or event that is recognized outside profit or loss, either in other comprehensive income or directly in
equity in the same or different period.
o. Earnings per share
Basic EPS is calculated by dividing the profit or loss for the period attributable to the equity holders of the parent
company by the weighted average number of ordinary shares outstanding (including adjustments for bonus and
rights issues).
Diluted EPS is calculated by adjusting the profit or loss and the weighted average number of ordinary shares by
taking into account the conversion of any dilutive potential ordinary shares.
Basic and diluted EPS are presented in the statement of profit and loss for each class of ordinary shares in accordance
with Ind AS 33.
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