This note provides a list of the significant accounting policies adopted in
the preparation of these financial statements. These policies have been
consistently applied to all the years presented, unless otherwise stated.
3.1 Income
(i) Revenue From Sale of Goods and Services
Revenue from contracts with customers for sale of goods
or services is recognised when the Company satisfies
performance obligation by transferring promised goods or
services to the customer at an amount that reflects the
consideration which the Company is expected to be
entitled to in exchange for those goods or services.
Revenue is measured based on the transaction price,
which is the consideration, adjusted for trade discounts,
incentives and returns, if any, as specified in the contract
with the customer. Revenue also excludes taxes collected
from customers. The trade discounts incentives and right
of return are estimated and provided for, based on
historical, current and forecast information available. A
refund liability is recognised for expected returns in
relation to sales made, corresponding assets are
recognised for the products expected to be returned.
The Company does not expect to have any contract
where the period between the transfer of the promised
goods or services to the customer and payment by the
customer exceed one year. As a consequence, the
Company does not adjust any of the transaction prices for
the time value of money.
(ii) Dividend Income
Dividend income on equity shares is recognised when the
Company's right to receive the payment is established,
which is generally when shareholders approve the
dividend. During the year the Company has not received
any income from dividend.
3.2 Expenditures
(i) Finance costs
Borrowing costs on financial liabilities are recognised
using the Effective Interest Rate (EIR).
3.3 Cash and cash equivalents
Cash and cash equivalents include cash on hand, other short
term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in
value.
Cash Flow Statement
Cash flows are reported using the indirect method, whereby loss
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.
3.4 Financial Assets
Financial assets include cash, or an equity instrument of another
entity, or a contractual right to receive cash or another financial
asset from another entity. Few examples of financial assets are
loan receivables, investment in equity and debt instruments, trade
receivables, cash and cash equivalents
All Financial assets are recognized initially at fair value plus, in the
case of financial assets not recognised at fair value through profit
and loss, transaction costs that are attributable to the acquisition
of the financial asset. Financial assets are subsequently
measured at amortised cost using effective interest rate method
(EIR)
3.5 Financial Liabilities
Financial liabilities include liabilities that represent a contractual
obligation to deliver cash or another financial assets to another
entity, or a contract that may or will be settled in the entities own
equity instruments. Few examples of financial liabilities are trade
payables, debt securities and other borrowings and subordinated
debts.
3.6 Taxes
(i) Current Tax
Current tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the
taxation authorities, in accordance with the Income Tax
Act, 1961 and the Income Computation and Disclosure
Standards (ICDS) prescribed therein. The tax rates and
tax laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting date.
(ii) Deferred Tax
Deferred tax is provided using the Balance Sheet
approach on temporary differences between the tax
bases of assets and liabilities and their carrying amounts
for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are
recognized for deductible temporary differences to the
extent that it is probable that taxable profits will be
available against which the deductible temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets, if any, are
reassessed at each reporting date and are recognised to
the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realised or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively
enacted at the reporting date.
Deferred tax assets and deferred tax liabilities are offset if
a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.
3.7 Property, Plant and Equipment
Property, plant and equipment are carried at historical cost of
acquisition less accumulated depreciation and impairment
losses, consistent with the criteria specified in Ind AS 16 'Property,
Plant and Equipment'.
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