(g ) Provisions and Contingent Liabilities:
A provision is recognised if, as a result of a past event, the Company has a present legal
or constructive obligation that can be estimated reliably, and it is probable that an out
flow of economic benefits will be required to settle the obligation. Provisions are
determined by discounting the expected future cash flows at a Pre-tax rate that reflects
current market assumptions of the time value of money and the risks specific to the
liability. The unwinding of discount is recognized as finance cost.
The amount recognized as a provision is the best estimate of the consideration required
to settle the present obligation at reporting date, taking into account the risks and
uncertainties surrounding the obligation.
When some or all of the economic benefits required to settle a provision are expected
to be recovered from a third party, the receivable is recognized as an asset if it is
virtually certain that reimbursement will be received and the amount of the receivable
can be measured reliably.
A provision for onerous contract is measured expected at the present value of the lower
of the expected cost of terminating the contract and at the present value of the lower of
the expected net cost of continuing with the contract.
Contingent liabilities are possible obligations that arise from past events and whose
existence will only be confirmed by the occurrence or non-occurrence of one or more
future events not wholly within the control of the Company. Where it is not probable
that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the
probability of outflow of economic benefits is remote.
(h) Leases: Not Applicable . . -
(i) Borrowing Costs :
Borrowing costs directly attributable to the acquisition or construction of those
property, plant and equipment which necessarily takes a substantial period of time
to get ready for their intended use are capitalised. All other borrowing costs are
capitalised in the period in which they are incurred in the statement of profit and
loss.
(j) Revenue:
Revenue from the sale of goods in the course of ordinary activities is measured at
the fair value of the consideration received or receivable, net of returns, trade
discounts and volume rebates. This inter-alia involves discounting of the
consideration due to the present value if payment extends beyond normal credit
terms. Revenue is recognised when the significant risks and rewards of ownership
have been transferred to the buyer, recovery of the consideration is probable, the
associated costs and possible return of goods can be estimated reliably, there is no
continuing effective control over, or managerial involvement with, the goods, and
the amount of revenue can be measured reliably.
Interest: Not Applicable
. . I: .
Dividend : There is dividend income earned by the company during the year.
(k) Government Grants:
Government grants are recognised where there is reasonable assurance that the
grant will be received and all attached conditions will be complied with. When the
grant relates to revenue, it is recognised in the statement of profit and loss on a
Systematic basis over the periods to which they relate. When the Grant relates to
an asset, it is treated as deferred income and recognised in the statement of profit
and loss on a systematic basis over the useful life of the asset.
(l) Income Tax:
Income tax comprises current and deferred tax. It is recognised in profit or loss
except to the extent that it relates to a business combination or to an item
recognised directly in equity or in other comprehensive income.
(m) Current Tax:
Since the company has posted net losses hence there is no provision for payment of
Income Tax in the Books of the Company during the year.
(n) Deferred Tax:
Deferred tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes. Deferred tax is also recognised
in respect of carried forward tax losses and tax credits. ,
Deferred tax assets are recognised to the extent that it is probable that future
taxable profits will be available against which they can be used.
Deferred tax assets recognised or unrecognised are reviewed at each reporting date
and are recognised / reduced to the extent that it is probable/ no longer probable
respectively, that the related tax benefit will be realised.
Deferred tax is measured at the tax rates currently prevailing for the period of
reporting.
The measurement of deferred tax reflects the tax consequences that would follow,
from the manner in which the Company expects, at the reporting date, to recover or
settle the carrying amount of its assets and liabilities. The Company offsets, the
current tax assets and liabilities (on a year on year basis) and deferred tax assets and
liabilities, where it has a legally enforceable right and where it intends to settle such
assets and liabilities on a net basis
(o) Earnings per share:
The Company presents basic and diluted earnings per share (EPS) data for its
ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to
ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the
profit or loss attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding after adjusting for the effects of all potential
dilutive ordinary shares.
(p) Cash flow statement:
Cash flows are reported using the indirect method, whereby profit for the period'is
adjusted for the effects of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or payments and item of income or
expenses associated with investing or financing cash flows. The cash flows from
operating, investing and financing activities of the Company are segregated. The
company considers all highly liquid investments that are readily convertible to
known amounts of cash to be cash equivalents.
Effective April 1, 2017, the Company adopted the amendment to Ind AS 7, which
require the entities to provide disclosures that enable users of financial statements
to evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes, suggesting inclusion of a
reconciliation between the opening and closing balances in the Balance Sheet for
liabilities arising from financing activities, to meet the disclosure requirement. The
adoption of amendment did not have any material impact on the financial
statements.
(q) Financial Instruments:
a. Recognition and initial measurement:
The Company initially recognises financial assets and financial liabilities when it
becomes a party to the contractual provisions of the instrument. All financial
assets and liabilities are measured at fair value on initial recognition. Transaction
costs that are directly attributable to the acquisition or issue of financial assets
and financial liabilities that are not at fair value through profit or loss are added
to the fair value on initial recognition. Regularly purchase and sale of financial
assets are accounted for at trade date.
b. Classification and subsequent measurement:
Financial Assets : Financial assets carried at amortised cost.
A financial asset is subsequently measured at amortised cost if it is held wiithin a
business model whose objective is to hold the asset in order to collect
contractual cash flows and the contractual terms of the financial asset give rise
on specified dates to cash flows that are solely Payments of principal and
interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income:
A financial asset is subsequently measured at fair value through other
comprehensive income if it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling financial assets
and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the Principal
amount outstanding.
Financial assets at fair value through profit or loss :
A financial asset which is not classified in any of the above categories are
subsequently fair valued through profit or loss.
Financial Liabilities:
Financial liabilities are subsequently carried at amortised cost using the effective
interest method. For trade and other payables maturing within one year from
the balance sheet date, the carrying amounts approximate fair value due to the
short maturity of these instruments.
Financial Assets:
The Company derecognises a financial asset when the contractual rights to the
cash flows from the financial asset expire, or it transfers the right to receive the
contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial assets are transferred or in which the
Company neither transfers nor retains substantially all of the risks and rewards
of ownership and does not retain control of the financial asset.
If the Company enters into transactions whereby it transfers assets recognized
on its balance sheet but retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred assets are not derecognised.
Impairment of financial assets
The company assesses impairment based on simplified expected credit losses
(ECL) model for Trade Receivables. Allowance for expected credit loss is provided
for by an amount equal to 15% of the trade receivables outstanding at the end of
the financial year.
Financial Liabilities:
The Company derecognises a financial liability when its contractual obligations
are discharged or cancelled or expire.
The Company also derecognises a financial liability when its terms are modified
and the cash flows under the modified terms are substantially different. In this
case, a new financial liability based on the modified terms is recognised at fair
value. The difference between the carrying amount of the financial liability
extinguished and a new financial liability with modified terms is recognised in
the statement of profit and loss.
d. Offsetting: .
Financial assets and financial liabilities are offset and the net amount presented in
the balance- sheet when, and only when, the Company currently has a legally
enforceable right to set off the amounts and it intends either to settle them on a net
basis or realize the asset and settle the liability simultaneously.
(r) Recent Accounting Pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the
existing standards. The applicable provisions pertaining to the current year have
been complied with.
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