I. SIGNIFICANT ACCOUNT POLICIES
a) 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.
• Sales are recognized on transfer of significant risks and rewards of ownership of the goods to the buyer as per the terms of contract and no uncertainty exists regarding the amount of con- sideration that will be derived from sales of goods. It also includes goods and services tax and price variation based on the contractual agreement. It is measured at fair value of the consid- eration received.
• Income from services is recognized as they are rendered, based on agreement/arrangement with the concerned customers.
• Dividend income is accounted for when the right to receive the income is established.
b) Provision for Current and Deferred Tax:
Current tax is measured on the basis of estimated taxable income for the current accounting period in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961, and the rules framed there under.
Deferred tax is recognized using the Balance Sheet approach on the temporary differences between the carrying amounts of assets and liabilities in the financial statements and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset, if there is a legally enforceable right to offset current tax liabilities and assets, and these relate to income taxes levied by the same tax authority and are intended to settle current tax liabilities, and assets on a net basis or such tax assets and liabilities will be realized simultaneously.
In the event of unabsorbed depreciation or carry forward of losses under tax laws, deferred tax assets are recognized to the extent that it is probable that sufficient future taxable income will be available to realize such assets.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.
Current and deferred tax are recognized in the statement of profit and loss, except when the same relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax relating to such items are also recognized in other comprehensive income or directly in equity respectively.
Income tax expense consists of current and deferred tax. Income tax expense is recognized in the income statement except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
c) Earnings per Share
The basic EPS is computed by dividing the profit after tax for the year attributable to the equity shareholders by the weighted average number of Equity shares outstanding during the year.
For the purpose of calculating diluted EPS, profit after tax for the year attributable to the equity shareholders and the weighted average number of Equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
d) Leases
i) . Finance Lease: as a Lessee:
Leases, where substantially all the risks and benefits incidental to ownership of the leased item are transferred to the Lessee, are classified as finance lease. The assets acquired under finance lease are capitalized at lower of fair value and present value of the minimum lease payments at the inception of the lease and disclosed as leased assets. Such assets are amortized over the period of lease or estimated life of such asset, whichever is lower. Lease payments are apportioned between the finance charges and reduction of the lease liability based on implicit rate of return. Lease management fees, lease charges and other initial direct costs have been capitalized.
ii) . Operating Lease: as a Lessee:
Leases, where significant portion of the risks and rewards of ownership are retained by the lessor, are classified as operating leases and lease rentals thereon are charged to the Statement of Profit and Loss on a straight-line basis over the lease term.
e) Foreign Currencies
In preparing the financial statements of the Company, transactions in currencies other than the company’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognized in profit or loss in the period in which they arise.
f) Property, Plant and Equipment
Tangible asset and capital work-in-progress
Tangible assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until such assets are ready for use. Capital work-in-progress comprises the cost of fixed asset that are not yet ready for their intended use at the reporting date.
Property, plant & equipment is eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal. Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss. Cost of the tangible assets not ready for their intended use at the Balance Sheet date together with all related expenses are shown as Capital Work-in-Progress.
Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognized as separate assets, as appropriate, only when it is probable that the future economic benefits associated with expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to Statement of Profit and Loss at the time of incurrence.
g) Depreciation and Amortization
Depreciation and amortization for the year is recognized in the Statement of Profit and Loss. Depreciation on Property, Office Equipment are provided on straight line method over the useful lives of assets, at the rates and in the manner specified in Part C of Schedule II of the Act. Freehold land is not depreciated. Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and in case of Projects from the date of commencement of commercial production. Depreciation on de-ductions/disposals is provided on a pro-rata basis up to the date of deduction/disposal.
h) Intangible assets
Intangible assets are stated at cost less accumulated amortization and impairment loss (if any). Intangible assets are amortized over their respective estimated useful lives on a straight-line basis, from the date that they are available for use.
Amortisation
The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
Computer software is amortized on straight line basis over a period of:
(a) The EQUIPPP Trademark’s useful life is expected to be forty years from 2015, hence for the Company EQUIPPP Social lmpact Technologies Limited, introduced this Asset into the company in Jun 2021, hence it can use the said assets for next 34 yrs from Jun 2021.
(b) The Newly trademarked EQUIPPP ix IP’s useful life is expected to be forty years from 2022, hence for the Company EQUIPPP Social lmpact Technologies Limited, it can use the asset for next 40 yrs from 2022.
The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revise to reflect the changes pattern, if any.
i) Cash and Cash equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand and short-term deposits with banks that are readily convertible into cash which are subject to insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments.
j) Cash flow statement
Cash flows are reported using the indirect method, whereby profit or loss before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated and ultimately reconciled to the Closing cash and bank balance.
k) Employee benefits
i. Short-term Employee Benefits:
Short-term employee benefits are recognized as an expense on accrual basis.
ii. Defined Contribution Plan:
Contribution payable to recognized provident fund and approved superannuation scheme, which are substantially defined contribution plans, is recognized as expense in the Statement of Profit and Loss, as and when, they are incurred.
The provident fund contribution (when applicable) as specified under the law is paid to the Provident Fund to the Regional Provident Fund Commissioner.
iii. Defined Benefit Plan:
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination/resignation is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of completed years of service. The gratuity plan is a funded plan and Company makes annual contributions to the Group Gra- tuity cum Life Assurance Schemes administered by the LIC of India, a funded defined the most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity has not been carried out as at March 31st, 2024. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
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