Basis for preparation of accounts
The accounts have been prepared to comply in all material aspects with
applicable accounting principles in India, the applicable Accounting
Standards notified under Section 211(3c) of the Companies Act, 1956 and
the relevant provisions thereof. All assets and liabilities have been
classified as current or non-current as per the Company's normal
operating cycle and other criteria set out in Revised Schedule VI to
the Companies Act, 1956. Based on the nature of products and the time
between acquisition of assets for processing and their realization in
cash and cash equivalents, the Company has ascertained its operating
cycle as 12 months for the purpose of current / non-current
classification of assets and liabilities.
Use of Estimates:
The preparation of financial statements in conformity with GAAP
requires estimates and assumptions that affect the reported amounts of
Assets and Liabilities, revenues and expenses, and related disclosures
of contingent liabilities in the financial statements and accompanying
notes. Estimates are used for, but not limited to valuation of
investments, collect ability of receivables, sales returns, incentive
discount offers, valuation of inventory, depreciable lives of fixed
assets and valuation of acquired intangibles and goodwill, income
taxes, stock based compensation and contingencies. Actual results could
differ materially from those estimates.
Fixed Assets and Depreciation
I) Fixed assets are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. Subsequent expenditures related
to an item of fixed asset are added to its book value only if they
increase the future benefits from the existing asset beyond its
previously assessed standard of performance. Items of fixed assets that
have been retired from active use and are held for disposal are stated
at the lower of their book value and net realizable value and are shown
separately in the financial statements under Other Current Assets if
any. Any expected loss is recognized immediately in the profit and loss
account. Losses arising from the retirement of, and gains or losses
arising from disposal of fixed assets which are carried at cost are
recognized in the profit and loss account if any. ii) Depreciation has
been provided under the written down value method at the rates
prescribed under Schedule XIV of the Companies Act, 1956. In respect of
assets added / assets sold during the year, pro- rata depreciation has
been provided at the rates prescribed under Schedule XIV. Depreciation
in respect of assets acquired during the year whose cost does not
exceed Rs. 5,000/- has been provided at 100%.
Revenue Recognition
i. Sales are recognized when the substantial risks and rewards of
ownership in the goods are transferred to the buyer, upon supply of
goods, and are recorded net of trade discounts, rebates, sales taxes
and excise duties.
ii. Income from services rendered is recognized as the service is
performed and is booked based on agreements / arrangements with the
concerned parties.
Interest income on Deposits is recognized during the time proportion
method, based on interest rates implicit in the transaction.
Expenditure
Expenses are accounted on accrual basis and the Provisions are made for
all expected losses and liabilities.
Investments
Investments are classified into current and long term investments.
Current investments are stated at the lower of cost and fair value.
Long term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of long
term investments. Investments that are readily realizable and are
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.
Employee benefits
Disclosure is made as per the requirements of the standard and the same
is furnished below:
1. Defined contribution plan
Contribution to provident fund is in the nature of defined contribution
plan and is made to EPFO.
2. Defined Benefit Plan
The company doesn't have policy of contribution to Gratuity and Leave
encashment. Hence no provision is made in the books.
Foreign Exchange Transactions
a) Foreign currency transactions arising during the year are recorded
as per the prescribed foreign exchange rates prevailing on the date of
the transaction.
b) Monetary assets and liabilities related to foreign currency
transactions remaining unsettled at the end of the year are stated at
the contract rates and / or at the transaction Schedule :
Earnings per share
A basic earnings per share is calculated by dividing the net profit for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period. The weighted
average number of equity shares outstanding during the period and for
all periods presented is adjusted for events, such as bonus shares,
other than the conversion of potential equity shares that have changed
the number of equity shares outstanding, without a corresponding change
in resources. For the purpose of calculating diluted earnings per
share, the net profit for the period attributable to equity
shareholders and the weighted average number of shares outstanding
during the period is adjusted for the effects of all dilutive potential
equity shares if any.
Inventories
Inventories are valued at the lower of cost, computed on a weighted
average basis, and estimated net realizable value, after providing for
cost of obsolescence and other anticipated losses, wherever considered
necessary. Finished goods and work-in-progress include costs of
conversion and other costs incurred in bringing the inventories to
their present location and condition.
Impairment of Assets:
At each balance sheet date, the carrying amount of assets is tested for
impairment so as to determine
a) The provision for impairment loss, if any, required or
b) The reversal, if any, required for impairment loss recognized in
previous periods.
Impairment loss is recognized if the carrying amount an asset exceeds
its recoverable amount
Borrowing Costs:
Borrowing Costs that are directly attributable to long term project
management and development activities are capitalized as part of the
projects cost when the activities that are necessary to prepare the
asset for its intended use or sale are in progress. Other borrowing
costs are recognized as expenses in profit and loss account in the
period in which they are occur.
Income Taxes
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized , subject to
the consideration of prudence, on timing differences being differences
between taxable income and accounting income, that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets are not recognized on unabsorbed depreciation and
losses unless there is a virtual certainty that sufficient taxable
profits will be available against which such deferred tax assets can be
realized
Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, demand deposits with
banks, other short-term highly liquid investments with original
maturities of three months or less.
Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments under such leases are charged to profit and loss
account on a straight line basis over the lease term.
Provisions and Contingent Liabilities
A provision is recognized when there is a present obligation as a
result of a past event, it is probable that an outflow of resources
will be required to settle the obligation and in respect of which
reliable estimate can be made. Provision is not discounted to its
present value and is determined based on the best estimate required to
settle the obligation at the year end date. These are reviewed at each
year end date and adjusted to reflect the best current estimate.
Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non occurrence of one or more
uncertain future events not wholly within the control of the company or
a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle or
a reliable estimate of the amount cannot be made.
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