Basis of preparation of financial statements
These financial statements are prepared in accordance with Indian Generally Accepted Accounting
Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory
accounting standards as prescribed under Section 133 of the Companies Act 2013 (' the Act') read with
rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the act. The accounting policies adopted
in the preparation of financial statements have been consistently applied. 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 to the Companies Act, 2013. Based on the nature of operation and time
difference between the provision of services and realization of cash and cash equivalents, the company
has ascertained its operating cycle as 12 months for the purpose of current and non-current classification
of assets and liabilities.
All amounts included in the financial statements are reported in Indian rupees (in rupees). Due to
rounding off, the numbers presented throughout the document may not add up precisely to the totals
and percentages may not precisely reflect the absolute figures. Previous year figures have been
regrouped/ re-arranged, wherever necessary.
Use of Estimates
The preparation of financial statements in conformity with Indian Accounting Standards requires
management to make estimates, judgments and assumptions. These estimates, judgments and
assumptions affect the application of accounting policies and reported amounts of assets and liabilities,
the disclosures of contingent assets and liabilities at the date of the financial statements and reported
amounts of revenue and expenses during the year. Accounting Estimates could change from period to
period. Actual results could differ from those estimates. Appropriate changes and estimates are made as
Management become aware of changes in circumstances surrounding the estimates. Changes in
estimates are reflected in the financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial statements.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be readily measured, regardless of when the payment is being made.
Revenue is measured at fair value of the consideration received or receivable, after deduction of any
trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are
levied on sales such as Goods and Services Tax. Revenue is recognized either in time or point of time,
when (or as) the Company satisfies performance obligations by transferring the goods or services to its
customers.
The company applies the revenue recognition criteria to each separately identifiable component of the
sales transaction as mentioned in Statement of Profit & Loss.
Dividend Income is recognized when the right to received payment is established.
Interest Income is recognized on a time proportion basis taking into account the amount outstanding and
the interest rate applicable.
Property, Plant and Equipment
i. Tangible assets are stated at cost net of accumulated depreciation and accumulated impairment losses,
if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working
condition of its intended use. The costs comprises of the purchase price, borrowings costs if capitalization
criteria are met and directly attributable costs of bringing the asset to its working condition for the
intended use. Any trade discounts and rebates are deducted in arriving at the cost of the tangible asset.
Any subsequent expenses related to a tangible asset is added to its book value only if it increases the
future benefits from the existing asset beyond its previously assessed standard of performance. All other
day to day repairs and maintenance expenditure and the cost of replacing parts, are charged to the
statement of profit and loss for the period during which such expenses are incurred.
ii. Cost of borrowing for assets taking substantial time to be ready for use is capitalized for the period up
to the time the asset is ready for use.
iii. Intangible assets are stated at cost of construction less accumulated amortized amount and
accumulated impairment losses, if any.
Depreciation and Amortization
Depreciation on Property, Plant and Equipment is provided on Straight Line Method (SLM). Depreciation
is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013
except in respect of the following assets, where useful life is different than those prescribed in Schedule II
are used. The residual value are not more than 5% of the original cost of the Asset. The Asset residual
value, useful lives and method of depreciation are reviewed at each financial year end and adjusted
prospectively, if appropriate.
In respect of addition or extensions forming an integral part of existing assets and insurance spares,
including incremental cost arising on account of translation of foreign currency liabilities for acquisition of
Fixed Assets, depreciation is provided as aforesaid over the residual life of the respective assets.
Employee Benefits
i. Short Term Employee Benefits : Benefits payable to employees within 12 months of rendering services
such as wages, salaries, bonus, paid annual leave, etc are classified as Short Term Employee Benefits and
are recognized in the period in which the employee renders related services.
ii. Long Term/Post Employment/Termination Benefits : Actuarial Valuation is kept in view for
determining the liabilities, if any. Leave Encashment, if any, is accounted for on accrual basis.
iii. Provident Fund : On the basis of payments/contributions made to the concerned Provident Fund
authorities.
Investments
Property that are held for long term rental yields or for Capital Appreciation or both is classified as
Investment Property. Investment Property is measured at its cost, including related transaction cost and
where applicable borrowing costs. Current investments are carried at lower of cost or quoted/fair value.
Provision for diminution in the value of long term investments is made only if such a decline is other than
temporary.
Cash and Cash Equivalents
'Cash' comprises of cash on hand and demand deposits with Bank. 'Cash Equivalents' are short term,
highly liquid investment, that are readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
Expenditure
Expenses are accounted on the accrual basis and provisions are made for all known losses and liabilities.
Taxes on income
Deferred Tax is recognized, subject to the consideration of prudence, in respect of deferred tax assets or
liabilities, on timing differences, being the difference between taxable income and accounting income
that originate in one period, and is reversible in one or more subsequent periods.
Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be
realized in the future; however where there is unabsorbed depreciation or carry forward of losses,
deferred tax assets are recognized only if there is a virtual certainty of realization of such assets and are
reviewed for the appropriateness of their respective carrying values at each reporting date.
Income Taxes are accrued in the same period the related revenue and expenses arise. A provision is made
for income tax annually, based on the tax liability computed, after considering tax allowances and
exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other
matters is probable. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives rise
to future economic benefits in the form of tax credit against future income tax liability, is recognized as an
asset in the Balance Sheet if there is convincing evidence that the company will pay normal tax in future
and the resultant asset can be measured reliably.
IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An
impairment loss is charged to the Statement of Profit & Loss of the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting periods is adjusted if there has been a
change in the estimate of the recoverable amount.
Borrowing Costs
Borrowing cost attributable to the acquisition or construction of a qualifying asset are capitalised as part
of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get
ready for intended use. All other borrowing costs are recognised as an expense in the period in which
they are incurred. Borrowing Cost consist of Interest, Other Cost that an entity incurs in connection with
the borrowing of funds. Investment income earned on the temporary investment of specific borrowing
pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for
capitalization.
FOREIGN CURRENCY TRANSACTION
There is no Foreign Currency Transaction during the year.
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