2. Summary of significant accounting policies
Basis of Preparation of financial statement:

The financial statements of the company have been prepared in accordance with generally accepted accounting
principles in India (Indian GAAP). The financial statements comply in all material respects with the accounting
standards as prescribed under section 133 of the Companies Act, 2013 (the “Act”) read with rule 7 of the Companies
(Accounts) Rules, 2014, provisions of the Act (to the extent notified). The accounting policies adopted in the
preparation of financial statements are consistent with those of previous year.

Significant Accounting Policies:

(i) Fixed assets, depreciation, amortization and impairment:

Tangible assets

Fixed assets acquired are stated at historical cost of acquisition less accumulated depreciation and
impairment losses, if any. Cost comprises of the purchase price and any attributable cost of bringing the
asset to its working condition for its intended use. Borrowing cost relating to acquisition of fixed assets which
take substantial period of time to get ready for its intended use are also included to the extent they relate to the
period till such assets are ready to be put to use.

Depreciation is provided on straight line basis based on life assigned to each asset in accordance with
Schedule II of the Act or as per life estimated by the Management, whichever is lower, as stated below.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost and are carried at cost less
accumulated amortization and impairment.

Computer Software is amortized on a straight-line basis over the period of 3 years.

Impairment

Impairment loss, if any, is provided to the extent the carrying amount of assets exceeds their recoverable
amount. Recoverable amount is the higher of an asset's net selling price and its value in use. Carrying
amounts of assets are reviewed at each Balance Sheet date for any indication of impairment based on
internal/external factors. Value in use is the present value of estimated future cash flows expected to arise
from the continuing use of an asset and from its disposal at end of its useful life. In assessing value in use,
the present value is discounted using a pre-tax discount rate that reflects current market assessments of the
time value of money and risks specific to the asset. Net selling price is the amount obtainable from sale of an
asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

(ii) Foreign currency transactions:

Transactions in foreign currencies are recognized at exchange rates prevailing on the transaction dates.
Exchange differences arising on the settlement of monetary items at rates different from those at which they
were initially recorded during the year, or reported in previous financial statements, are recognized as income
or as expenses in the year in which they arise. Foreign currency monetary items are reported at the year-end
rates. Exchange differences arising on reinstatement of foreign currency monetary items are recognized as
income or expense in the statement of profit and Loss. Non-monetary items which are carried in terms of
historical cost denominated in a foreign currency are reported using the exchange rate at the date of the
transaction.

(iii) Investments:

Investments that are readily realizable and intended to be held for not more than a year are classified as
current investments. All other investments are classified as long-term investments. Current investments are
carried at lower of cost and fair value determined on an individual investment basis. Long-term investments
are carried at cost. However, provision for diminution in value is made to recognize a decline other than
temporary in the value of the investments.

(iv) Inventories:

Inventories of raw materials, packaging material, finished goods are valued at lower of cost and net realizable
value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and estimated costs necessary to make the sale.

(v) Retirement and other employee benefits:

a) Employee State Insurance Corporation are defined contribution scheme and the contribution is charged
to the statement of profit and loss of the year when the contribution to the respective fund is paid. There
is no other obligation other than the contribution payable.

b) Gratuity Liability is defined benefit obligation and is considered for on the basis of payment made during
each financial year.

c) Since, this is the labour-intensive company, the employee benefits forms a crucial part of the operation of
the company. As per the management representation received by us during the course of Audit, the same
seems to be satisfactory. As a general phenomenon, all employee benefits including bonus/ex-gratia
(incentives) payable wholly within twelve months of rendering the services are classified as short-term
employee benefits and are charged to the profit and loss accounts of the year.

(vi) Revenue recognition:

Income from Operation:

Sales are recognized, at transaction price as per terms of agreements with the customers, net of returns and
other variable consideration on account of discounts, if any, on satisfaction of performance obligation by
transfer of effective control of the promised goods to the customers, which generally coincides with dispatch/
delivery to customers, as applicable. Sales excludes goods and services tax.

Interest:

Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate
applicable.

Dividends:

Revenue is recognized when the shareholders' right to receive payment is established.

(vii) Taxation:

a) Provision for current taxation has been made in accordance with the Indian Income tax laws prevailing for
the relevant assessment years.

b) Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the
difference between taxable incomes and accounting income that originate in one period and are capable
of reversal in one or more subsequent periods. Deferred tax is measured on the tax rates and the tax
laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only
to the extent that there is reasonable certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. If the company has unabsorbed depreciation or
carry forward losses, deferred tax assets are recognized only if there is virtual certainty supported by
convincing evidence that such deferred tax assets can be realized against future taxable profits.

The carrying amount of deferred tax assets is reviewed at each Balance Sheet date. The Company writes
down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable income will be available against which
deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably
certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

At each balance sheet date, the company re-assesses unrecognized deferred tax assets. It recognizes
unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be available against which such deferred tax
assets can be realized.