2) Significant Accounting Policies :
A) Revenue Recognition :
Revenue / income and cost / expenditure are generally accounted on accrual as they are earned or
incurred. Other Income is Comprised primarily of interest income, dividend income and gain/loss on
investments. Interest income is recognised using the effective interest method. Dividend income is
recognised when the right to receive payment is established.
B) Employees Benefits :
1) Company's Contribution to Provident Fund are charged to Profit & Loss Account.
2) Gratuity payable to Employees is calculated as per provisions of the Gratuity Act. However, there
is no gratuity payable till current year for the Company.
3) Leave encashment benefit is payable at the time of retirement. The Company provides for the
uncosumed leaves till the year, however there is no liability payable for the Company.
C) Classification of Current / Non-Current Assets and Liabilities
All the 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 and
Ind AS 1 “Presentation of financial statements”.
Assets:
An asset is classified as current when it satisfies any of the following criteria:
a) it is expected to be realised in, or is intended for sale or consumption in, the Company’s normal
operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is expected to be realised within twelve months after the reporting date; or
d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability
for at least twelve months after the reporting date.
Liabilities:
A liability is classified as current when it satisfies any of the following criteria:
a) it is expected to be settled in the Company’s normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is due to be settled within twelve months after the reporting date; or
d) the Company does not have an unconditional right to defer settlement of the liability for at least
twelve months after the reporting date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.
All other assets / liabilities are classified as non-current.
Based on the nature of products and the time between the acquisition of assets for processing and
their realisation in cash or cash equivalents, the Company has ascertained its normal operating cycle
as twelve months for the purpose of Current / Non-current classification of assets and liabilities.
D) Property, Plant and Equipment :
Property, Plant and Equipment are valued at cost of acquisition less depreciation.
Property, plant and equipment are recorded at cost of acquisition / construction less accumulated
depreciation and impairment losses, if any. Cost comprises of the purchase price net of creditable
cenvate, Service Tax, Value Added Tax and Goods and Service Tax, if any, and any attributable cost of
bringing the assets to its working condition for its intened use.
The Cost and realted accumulated depreciation are eliminated from the financial statements upon
sale or retirement or impairment of the asset and reultant gains or losses are recognised in the
Statement of Profit and Loss.
E) Depreciation and Amortisation on Property, Plant and Equipment :
Depreciation / amortisation on Property, plant and equipemnt is charged on WDV basis so as to write
off original cost of the assets over the useful lives. The useful life of the fixed assets as prescribed
under the Companies Act, 2013 are as under:
Type of Assets Useful life (in Years)
Computer 3
Motor Car 8
Air Conditioner 10
F) Cash & Cash Equivalents :
Cash and cash equivalents, in balance sheet and in cash flow statement, includes cash in hand, term
deposit with Bank and other short term highly liquid investments with original maturities of three
months or less.
G) Investment :
Long Term Investments are stated at cost less provision for diminution in value other than temporary
if any.
H) Taxes on Income :
i. Current Tax :
Provision for current income tax is made on the taxable income using the applicable tax rates and
tax laws. Advance income tax and provision for current tax is disclosed in the Balance Sheet at
net as these are settled on net basis.
ii. Deferred Tax :
Deferred tax arising on account of timing differences and which are capable of reveral in one or
more subsequent period is recognised using the tax rate tax laws that have been enacted or
sustantively enacted. Deferred tax assets are not recognised unless there is virtual certainity
with respect to the reveral of the same in future years.
I) Financial Instruments :
The Company recognises financial assets and financial liabilitieswhen it becomes a party to the
constractual provisios of the financial instrument.
i) Financial Assets :
a) Initial Recognition and Measurement :
All financial assets are recognised initially at fair value, plus in the case of financial assets not
recorded at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset. Purchases or sales of financial assets that require delivery of
assets within a time frame established by regulation or convention in the market place (regular
way trades) are recognised on the trade date, i.e., the date that the Company commits to
purchase or sell the asset.
b) Subsequent Measurement :
For purpose of subsequent measurement financial assets are classified in three categories:
i) Financial Assets at Amortised Cost:
A financial asset is subsequently measured at amortised cost if it is held within a business
model whose objective is to hold the asset in order to collect contractual cash flows and the
constractual term o the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
After initial measurement, debt instrument, debt instrument are subsequently measured at
amortised cost using the effective interest rates method, less method, less impairment, if any.
ii) 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
constractual cash flows and selling financial assets and the contractual terms of the financial
assets give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as
equity/ debt instruments to present the subsequent changes in fair value in other
comprehensive income base on its business model.
iii) Financial Assets at Fair Value through Profit or Loss:
Financial assets which are not classified in any of the above categories are subsequently fair
valued through profit or loss.
ii) Financial Liabilities:
a) Initial Recognition and Measurement :
The Company's financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Financial liabilities are classified, at initial recognition, as at fair value through profit and loss or as
those measured at amortised cost.
b) Subsequent Measurement :
For purpose of subsequent measurement financial liabilities depends on their classification as
follows:
i) Financial Liabilities at Fair Value through Profit or Loss:
A financial liabilities at fair value through profit and loss include financial liabilities held for
trading. The Company has not designated nay financial liabilities upon initial recognition at
fair value through profit and loss.
ii) Financial Liabilities Measured at Amortised Cost:
After initial recognition, interest bearing loans and borrowings are subsequently measured at
amortised cost using the effective interests rate method except for those designated in an
effective hedging relationship.
J) Earning Per Share :
The earnings consider in ascertaing the Company's earning per share (EPS) comprise of the net profit
after tax after reducing dividend on cumulative preference shares for the period (irrespective of
whether declared, paid or not), as per Accounting Standard 20 on "Earning per share".
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