Note 2: Significant Accounting Policies:
i. Basis of preparation of Financial Statements:
The financial statements have been prepared in accordance with the generally accepted accounting principles in
India under historical cost convention on accrual basis. The accounting policies have been consistently applied
by the Company and are consistent with those used in the previous year. Consequently, these statements have
been prepared to comply in all material respect with the Companies (Accounts) Rules, 2014 and the relevant
provisions of the Companies Act, 2013. All the assets and liabilities have been classified as current and non¬
current as per the company's operating cycle and other criteria set out in the Schedule III to the Companies Act,
2013. Based on the nature of products and services, and the time between the acquisition of assets and realization
in cash or cash equivalents, the company has ascertained its operating cycle as 12 months for the purposes of
current and non-current classification of assets and liabilities.
ii. Use of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements and the results of operations during the
reporting period. Although these estimates are based upon management's best knowledge of current events and
actions, actual results could differ from these estimates.
iii. Property, Plant and Equipment's - Tangible Assets
Tangible Assets are stated at acquisition cost, net of accumulated depreciation and accumulated impairment
losses, if any. Subsequent expenditure related to an item of fixed assets is added to its book value only if it
increases the future benefits from the existing assets beyond its previously assessed standard of performance.
Depreciation is calculated on the Written-down Value (WDV) method over the estimated useful lives of the
assets. The residual value of all assets is assumed 5% based on historical trend of the Company.
iv. Intangible Assets:
Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment
loss, if any. Intangible assets are amortized on the basis of written down value method over their estimated
useful lives. A rebuttable presumption that the useful life on an intangible asset will not exceed ten years from
the date which the assets is available for use is considered by the management. The amortization period and the
amortization method are reviewed at least at each financial year end and if the expected useful life of the asset is
significantly different from previous estimates, the amortization period is changed accordingly.
v. Impairment of Assets:
Assessment is done at each balance sheet date as to whether there is any indication that an asset (tangible or
intangible) may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets
that generates cash inflows from continuing use that are largely independent of the cash flows from other assets or
groups of assets, is considered as a cash generating unit. If any such indicate exists, an estimate of the recoverable
amount of the asset/cash generating unit is made. Assets whose carrying value exceeds their recoverable amount
are written down to the recoverable amount. Recoverable amount is higher of an asset's or cash generating unit's
net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to
arise from the continuing use of the asset and from its disposal at the end of its useful life. Assessment is done at
each balance sheet date as to whether there is any indication that an impairment loss recognized for an asset in
prior accounting periods may no longer exist or may have decreased.
vi. Borrowing Costs:
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.
vii. 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
non-current investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase 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. Non-Current 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.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged
or credited to the statement of profit and loss.
viii. Inventories:
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
a. Raw materials, Work-in-progress, packing materials, consumables, stores and spares, are valued at lower of
cost and net realisable value. However, materials and other items held for use in the production of inventories
are not written down below cost if the finished products in which they will be incorporated are expected to
be sold at or above cost.
The cost comprises of costs of purchase, duties and taxes (other than those subsequently recoverable) and
other costs after deducting discounts and rebates which are incurred in bringing them to their present location
and condition. Cost is determined on weighted average basis.
b. Finished goods are valued at the lower of cost and net realizable value. Cost is determined using the retail
method, commonly employed in the retail sector for assessing inventories of numerous swiftly changing
items with comparable margins, where alternative costing methods are impractical. The inventory's cost is
established by deducting an appropriate percentage gross margin from its sales value, accounting for items
marked down below their original selling price. This valuation is further adjusted for potential obsolescence
and costs related to slow-moving stock, as deemed necessary.
c. Stocks in trade (Traded goods) are valued at lower of cost and net realisable value. Cost includes direct
materials valued on weighted average basis, and other costs incurred in bringing them to their present
location and condition.
d. Scraps are valued at estimated net realisable value.
ix. Revenue Recognition:
a. Sale of Goods: Sales are recognised, net of returns and trade discounts, on transfer of significant risks and
rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales
includes postage, freight etc. collected from the customers. Sales are recorded at Invoice Value. Net Revenue
excludes, Goods and Service Tax and other statutory levies
b. Other Income: Interest income on fixed deposits and loans is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.Interest on tax refunds is recognized on actual
receipt of the refund money or on communication from Income Tax department, whichever is earlier.
Dividend income is accounted for when the right to receive it is established.
x. Foreign Currency Translation:
a. Initial Recognition: On initial recognition, all foreign currency transactions are recorded by applying to the
foreign currency amount the exchange rate between the reporting currency and the foreign currency at the
date of the transaction.
b. Subsequent recognition: All monetary assets and liabilities in foreign currency are restated at the end of
accounting period.
c. Exchange differences on restatement of all other monetary items are recognized in the statement of Profit and
Loss.
xi. Employees Benefits:
a. Contribution to the provident fund, ESI which is a defined contribution plans, are charged to the Statement
Profit and Loss in the period in which the liability is incurred.
b. Provision for gratuity, which is a defined benefit plan, is funded through scheme administered by the Life
Insurance Corporation of India ('LIC'). Based on the actuarial values computed by LIC, the contributions to
the funded scheme are made by the company. Gratuities are provided on the basis of the actuarial valuation
as at the date of the Balance Sheet. The Company's liability is actuarially determined (using the projected
unit credit method) at the end of each year. Actuarial losses/gains are recognized in the Statement of Profit
and Loss in the year in which they arise.
c. Leave Encashment: Earned Leaves are neither encashable nor can be carried forward to the next year.
xii. Government Grants:
a. Government grants are recognised when there is reasonable assurance that the Company will comply with
the conditions attaching to them and that the grants will be received.
b. Incentives on exports related to operations as provided by government are recognised in books after due
consideration of certainty of utilisation / receipt of such incentive.
xiii. Segment Accounting:
Business Segment
a. The business segment has been considered as the primary segment.
b. The Company's primary business segments are reflected based on principal business activities, the nature of
service, the differing risks and returns, the organization structure and the internal financial reporting system.
c. The Company's primary business is knowledge based and engaged in Educational Book Publishing for
CBSE/State Board curriculum for K-12 segment in print and digital medium, and accordingly this is the
only segment as envisaged in Accounting Standard 17 'Segment Reporting' therefore disclosure for Segment
reporting is not applicable.
xiv. Accounting for Taxes on Income.
a. Tax expense comprises of 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. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting
date.
b. Deferred income taxes reflect the impact of timing differences between taxable income and accounting
income originating during the current year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.
c. Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized
for deductible timing differences 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. In situations where
the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized
only if there is virtual certainty supported by convincing evidence that they can be realized against future
taxable profits.
d. The carrying amount of deferred tax assets are reviewed at each reporting 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.
xv. Leases:
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item,
are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of
Profit and Loss on a straight-line basis over the lease term.
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