a) Basis of preparation of financial statements
These financial statements have been prepared to comply with the Generally Accepted Accounting Principles (Indian GAAP), including
Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on
accrual basis under the historical cost convention. The accounting policies not specifically referred, are consistently applied from the past
accounting periods.
b) Use of estimates
The preparation of financial statements in conformity with the Generally Accepted Accounting Policies requires the management to make
estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosures of contingent assets and
liabilities. The estimates and assumptions used in the accompanying financial statements are based upon managements’ evaluation of the
relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates and assumptions used
in preparing the accompanying financial statements. Any differences of actual results to such estimates are recognized in the period in which
the results are known/ materialized.
c) Revenue recognition
Having regard to size, nature and complexity of business and practices followed by others in the same line and level of business, the
management is of opinion that Company is applying accrual basis of accounting for recognition of income and expenditure earned or incurred
respectively, in the normal course of business.
d) Inventories
Inventory consists of Raw material, store and spares and Finished goods is valued at cost. Cost of inventories comprises of all cost of
purchases and other costs incurred in bringing the inventory to their present location and condition. Cost is assigned on First-In-First-Out
(FIFO) basis. Obsolete, defective and unserviceable stocks are provided for, wherever required.
e) Taxes on income
Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using
the applicable tax rates. Deferred tax is provided on timing differences between taxable income and accounting income subject to
consideration of prudence. Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or
substantively enacted by the balance sheet date.
f) Provisions
A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resource
embodying economic benefits will be require to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at the end of each reporting date and adjusted to reflect the current best estimates.
g) Earnings per Share
Basic Earnings per Share is computed by dividing the net profit after tax by weighted average number of equity shares outstanding during the
year. Diluted Earnings per Share is computed by dividing net profit after tax by the weighted average number of equity shares considered for
deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all
dilutive potential equity shares.
h) Depreciation and Amortisation
Depreciation is provided on ‘Written Down Value Method’ in accordance with the rates and other conditions laid down in Schedule- II of the
Companies Act, 2013. The calculation of deprecation is made on annual basis including in case of additions or sale of property, plant &
equipment during the year.
i) Property, plant and equipment
Property, plant and equipment are carried at the cost of acquisition or construction less accumulated depreciation. The cost of property, plant
and equipment includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the
respective assets.
j) Employee benefits
Short term benefits such as salary, bonus, leave salary and other benefits are accounted on accrual basis.
Defined contribution plans includes company’s contributions towards state plans for the employees, such as EPF, ESI etc. where
contributions made towards such plans are charged to revenue as and when they become due to the company.
Defined benefit plans includes gratuity, liability of which is provided in the books of account on the basis of actuarial valuation made at the
end of year.
k) Cash and cash equivalents
Cash equivalents represent highly liquid investments with remaining maturities, at the date of purchase/investment, of three months or less.
As of the balance sheet date, the Company had no such investment. Cash and cash equivalents comprise of cash in hand and balance in bank
accounts.
l) Other operational revenue
Other operational revenue represent income earned from the activities incidental to the business and is recognized when the right to
receive the income is established as per the terms of the contract.
m) Foreign Currency Transaction
Transaction denominated in foreign currency are recorded at the exchange rates prevailing on date of transactions Rbi reference rate is used
for recording closing balance gain or loss. All exchange differences are dealt with in the statement of profit & loss.
n) Borrowing cost
As per AS 16, borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as
the assets are substantially ready for their intended use or sale.
o) Income taxes
Tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961), deferred tax
charge or benefit (reflecting the tax effect of timing differences between accounting income and taxable income for the period) and minimum
alternate tax.
Current tax
Provision for income tax is recognized based on estimated tax liability computed after adjusting for allowances, disallowances and
exemptions in accordance with the Income Tax Act, 1961.
Deferred tax
The deferred tax charge or benefit and the corresponding deferred tax liabilities and assets are recognized using the tax rates that have been
enacted or substantially enacted as at the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty
that the asset can be realized in future, however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred
tax assets are recognized only if there is a virtual certainty of realization of the assets. Deferred tax assets are reviewed as at each balance
sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized.
Minimum Alternate Tax (MAT)
MAT credit asset is recognized where there is convincing evidence that the asset can be realized in future. MAT credit assets are reviewed at
each balance sheet date and written down or written up to reflect the amount that is reasonably certain to be realized.
p) Segment Reporting
The Company operates in a single primary business segment . Hence, there are no reportable segment as per AS 17 Segment Reporting.
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