B Significant accounting policies:
a. Basis of preparation
The financial statements are prepared under the
historical cost convention in accordance with the
Generally Accepted Accounting Principles in India and
the provisions of the Companies Act, 2013.
c. Uses of Estimates
The financial statements of the company have been
prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP). The
company has prepared these financial statements to
comply in all material respects with the Companies
(Accounts) Rules 2014 and the relevant provisions of
the Companies Act, 2013. The financial statements
have been prepared on an accrual basis and under
the historical cost convention. The accounting policies
adopted in the preparation of financial statements are
consistent with those of previous year.
b. Basis of Accounting
The financial statements are prepared under the
historical cost convention in accordance with the
Generally Accepted Accounting Principles in India and
the provisions of the Companies Act, 2013.
c. Uses of Estimates
The preparation of financial statements in conformity
with Generally Accepted Accounting Principles (GAAP)
requires management to make judgments, estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent liabilities,
at the end of the reporting period and the reported
amounts of income and expenses during the reporting
period. Examples of estimates include provision of
future obligations under employee benefit plan. Actual
result could differ from these estimates. Any revision to
accounting estimates is recognized prospectively in the
current and future periods. Management believes that
the estimates used in the preparation of statement of
accounts are prudent and reasonable considering that
the Company may not continue as a going concern.
d. Inventories/Work in Progress/Raw Material
Inventories are valued at lower of cost and net realisable
value. Cost includes cost of purchase, cost of conversion
and other costs incurred in bringing the inventories to
their present location and condition. Costs of purchased
inventory are determined after deducting rebates and
discounts. Net realizable value is the estimated selling
price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary
to make the sale.
(i) Finished goods, goods held for resale and packing
materials are stated at lower of cost and net
realizable value.
(ii) Work-in-progress inventory is valued at the lower
of cost and net realizable value, including materials,
labour, and allocated overheads, with provisions for
obsolete or slow-moving items where necessary.
(iii) Cost of stores and spare parts are computed on
first in first out basis (FIFO).
e. Revenue Recognition
Revenue is recognized to the extent it is probable that
the economic benefits will flow to the Company and the
revenue can be reliably measured. The following specific
recognition criterion must also be met before revenue
is recognized:
Sale of Goods:- Revenue is recognized when the
significant risks and rewards of ownership of goods
have been transferred to the buyer, there is no significant
uncertainty regarding ultimate collection, and the
amount is measured net of trade discounts, returns,
and GST.
Sale of Services:- Revenue is recognized on the basis
of service fee charged in accordance with the terms
of agreement entered with the customers when all
significant risks and rewards are transferred to the
customers and there is no significant uncertainty about
the ultimate collection.
Interest Income:- Interest income on bank deposits
and loans/advances is recognized on a time proportion
basis taking into account the amount outstanding and
the applicable rate.
f. Fixed Assets
Property, plant & equipment
PPE Fixed assets are stated at cost, less accumulated
depreciation. Cost comprises the purchase price and
any attributable cost of bringing the asset to its working
condition for its intended use. Borrowing costs relating
to acquisition of fixed assets which takes 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.
Intangible Asset
Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if
any. Gains or losses arising from de-recognition of an
intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of
the asset and are recognized in the Statement of profit
and loss when the asset is de-recognized.
Capital work in progress
Expenditure incurred on assets under construction or
development, which are not yet ready for intended use,
is classified as capital work-in-progress. Such costs
include direct expenses, attributable overheads, and
borrowing costs, where applicable. CWIP is transferred
to the relevant asset category upon completion and
when the asset is ready for its intended use.
g. Depreciation and Amortization
Depreciation on Property, Plant and Equipment is
provided on Written Down Value Method (WDV) on the
basis of useful lives of the asset considering the nature,
estimated usage, operating conditions, past history
of replacement anticipated technological changes,
manufacturers' warranties and maintenance support.
Taking into account these factors, the Company has
decided to retain the useful life hitherto adopted
for various categories of property, plant and
equipments,which might be different from those
prescribed in Schedule II of the Act.
Estimated useful lives of assets are as follows:
h. Foreign Exchange Fluctuations
Transactions denominated in foreign currencies are
recorded at the exchange rate prevailing on the date
of the transaction. Monetary assets and liabilities are
restated at closing exchange rates at the reporting
date. Exchange differences arising on settlement or
restatement are recognized in the Statement of Profit
and Loss in the period in which they arise.
i. Cash Flow Statement
Cash Flows are reported using indirect method, whereby
profit before tax is adjusted for effects of transactions
of non-cash nature and any deferral or accruals of any
past or future cash receipts or payments. The Cash
flows from regular revenue generating, financing and
investing activity of the company are segregated.
Cash and cash equivalents for the purposes of cash flow
statement comprise cash at bank and in hand and short¬
term investments with original maturity of three months
or less from date of investment.
j. Taxation
Income-tax expense comprises current tax (i.e., amount
of tax for the period determined in accordance with
the income-tax law) and deferred tax charge or credit
(reflecting the tax effects of timing differences between
accounting income and taxable income for the period).
Current tax is measured at the amount expected to be
paid to (recovered from) the taxation authorities, using
the applicable tax rates and tax laws. Deferred tax is
recognized in respect of timing differences between
taxable income and accounting income i.e., differences
that originate in one period and are capable of reversal
in one or more subsequent periods.
The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognized using
the tax rates and tax laws that have been enacted
or substantively enacted by the balance sheet date.
Deferred tax assets are recognized only to the extent
there is reasonable certainty that the assets 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 supported by convincing evidence
that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
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 (as the case
may be) to be realized.
k. Earnings Per Share
Basic Earnings per Share are calculated by dividing the
net profit or loss for the period attributable to Equity
Shareholders (after deducting preference dividends
and attributable taxes, if any) by the weighted average
number of Equity Shares outstanding during the period.
Partly paid Equity Share, if any is treated as a fraction
of an Equity Share to the extent that they were entitled
to participate in dividends relative to a fully paid Equity
Share during the reporting period. The weighted average
number of Equity Shares outstanding during the period
is adjusted for events of bonus issue, bonus element in
a rights issue to existing shareholders, share split, and
reverse share split (consolidation of shares), if any.
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