(a) Use of Estimates:
The preparation of financial statements in conformity with Indian 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 revenue
and expenses during the reported period. Although these estimates are based on management's best
knowledge of current events and actions, uncertainty about these assumptions and estimates could result in
the outcomes requiring a material adjustment to the Carrying amounts of Assets or Liabilities in future
periods.
(b) Property, Plant & Equipment and Intangible Assets:
Property, Plant and Equipment is stated at acquisition cost net of accumulated depreciation and
accumulated impairment losses, if any. Cost of acquisition or construction of property, plant and equipment
comprises its purchase price including import duties and non-refundable purchase taxes after deducting
trade discounts, rebates and any directly attributable cost of bringing the item to its working condition for its
intended use.
Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
company and the cost of the item can be measured reliably. All other repairs and maintenance cost are
charged to the statement of profit and loss during the period in which they are incurred.
Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net
disposal proceeds and the carrying value of property, plant and equipment and are recognised in the
statement of profit and loss when the same is derecognised.
Depreciation is calculated on pro rata basis on Written Down value basis based on life assigned to each asset
in accordance with Part C of Schedule - II of the Companies Act, 2013 or as per life estimated by the
Management.
(c) Revenue Recognition:
The company generally follows the mercantile system of accounting and recognizes Income & Expenditure
on accrual basis.
Revenue is recognised to the extent that it is possible that, the economic benefits will flow to the company
and the revenue can be reliably estimated and collectability is reasonably assured.
Revenue from sale of goods and services are recognised when control of the products being sold is
transferred to our customer and when there are no longer any unfulfilled obligations. The performance
obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer
acceptance depending on customer terms.
Revenue is measured on the basis of sale price, after deduction of any trade discounts, volume rebates and
any taxes or duties collected on behalf of the Government such as goods and service tax etc. Accumulated
experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to
the extent that it is highly probable a significant reversal will not occur.
(d) Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal/external factors. An impairment loss is recognized wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of the asset's net
selling price and value in use, which is determined by the present value of the estimated future cash flows.
(e) Investments:
Investments, which are readily realizable and intended to be held for not more than one year from the date
on which such investments are made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises price and directly
attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in the financial statements 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 Investments.
On disposal of investment, the difference between its carrying amount and net disposal proceeds are
charged or credited to the statement of profit and loss.
(f) Inventories:
Inventories consisting of Raw Materials, W-I-P and Finished Goods are valued at lower of cost and net
realizable value unless otherwise stated. Cost of inventories comprises of material cost on FIFO basis and
expenses incurred in bringing the inventories to their present location and condition.
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.
(g) Employee Benefits:
Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the
provident fund is charged to the statement of profit and loss for the year when an employee renders the
related services.
(h) Taxation:
Tax expenses comprises of current and deferred tax.
Current income tax is measured at the amount expected to be paid to the tax authorities, computed in
accordance with the applicable tax rates and tax laws.
Deferred Tax Assets or Deferred Tax Liability is recognized on timing difference being the difference
between taxable incomes and accounting income. Deferred Tax Assets or Deferred Tax Liability is measured
using the tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date.
Deferred Tax Assets arising from timing differences are recognized to the extent there is a reasonable
certainty that the assets can be realized in future.
(i) Borrowing Cost:
Borrowing Cost includes interest and amortization of ancillary costs incurred in connection with the
arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to get ready for its intended use or
sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the
period they occur.
(j) Segment Reporting:
The Company is engaged in the manufacturing of protective gears which are manufactured by using coated
fabric as the raw material. Considering the nature of Business and Financial Reporting of the Company, the
Company is operating in only one Segment. Hence segment reporting is not applicable.
The Company activities / operations are confined to India and as such there is only one geographical
segment. Accordingly, the figures appearing in these financial statements relate to the Company's single
geographical segment.
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