3. Summary of Significant Accounting Policies
(a) Property, plant and equipment
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less
accumulated depreciation and impairment loss. Costs directly attributable to acquisition are capitalized until
the property, plant and equipment are ready for use, as intended by the Management. The Company
depreciates property, plant and equipment over their estimated useful lives using the straight-line method.
The estimated useful lives of assets are as follows:
(b) Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization and
impairment loss, if any. Intangible assets comprising of Technology fees amortized over the period of 6 years.
(c) Inventories
Inventories are valued at Cost.
(d) Impairment of non-financial Assets-
Impairment is reviewed and recognized in the event changes and circumstances indicate that the carrying
amount of any property, plant and equipment and intangible assets or group of assets, called cash generating
units (CGU) is not recoverable. Difference between the carrying amounts and recoverable value shall be
recognized as an impairment loss in the Statement of Profit & Loss.
(e) Employee Benefits
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services
rendered by employees are recognized as an expense during the period when employees render the services.
Post-Employment Benefits
As per information provided to us few employees completed the specified period of service hence provision
is made for gratuity.
(f) Tax Expenses
Tax Expenses comprises current and deferred tax. Current income tax is measured at the amount expected
to be paid to the tax authorities in accordance with the Income tax Act, 1961 enacted in India and tax laws
prevailing in respective tax jurisdiction where the company operates. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted at the reporting date.
Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized
in the comprehensive income or in equity. In which case, the tax is also recognized in other comprehensive
income or equity.
(g) Foreign Currencies Transactions
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.
(h) Revenue recognition
Revenue is recognized on completion of Sales of goods or rendering services. Sale is exclusive of GST and
packing and forwarding charges collected from customers.
(i) Financial instruments
Accounting policy
Initial recognition:
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial
recognition, except for trade receivables which are initially measured at transaction price. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are
not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase
and sale of financial assets are accounted for at trade date.
Subsequent measurement:
a. Non-derivative financial instruments
(i) Financial assets carried at amortized cost: A financial asset is subsequently measured at amortized 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 contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding
(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 contractual cash flows and selling financial assets and the contractual
terms of the financial asset 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 instruments to present the subsequent changes in fair value in
other comprehensive income based on its business model.
(iii) Financial assets at fair value through profit or loss: A financial asset which is not classified in any of the
above categories is subsequently fair valued through profit or loss.
(iv) Financial liabilities: Financial liabilities are subsequently carried at amortized cost using the
effective interest method, except for contingent consideration recognized in a business combination
which is subsequently measured at fair value through profit or loss. For trade and other payables maturing
within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short
maturity of these instruments.
Derecognition of financial instruments:
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109.
A financial liability (or a part of a financial liability) is derecognized from the Company's Balance Sheet when
the obligation specified in the contract is discharged or cancelled or expires.
Fair value of financial instruments:
In determining the fair value of its financial instruments, the Company uses a variety of methods and
assumptions that are based on market conditions and risks existing at each reporting date. The methods used
to determine fair value include discounted cash flow analysis, available quoted market prices and dealer
quotes. All methods of assessing fair value result in general approximation of value, and such value may never
actually be realized.
(j) Depreciation
Depreciation on property, plant and equipment is provided using straight line method based on useful life of
the assets prescribed in Schedule II to the Companies Act, 2013. The residual values, useful lives and methods
of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted
prospectively.
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