SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
Company Overview
Company was originally formed as a partnership firm under the name and style of ‘M/s. Forcas Apparels’ pursuant to a
deed of partnership dated April 9, 2010. Subsequently, pursuant to aresolution dated October 3, 2023 passed at the meeting
of partners of M/s. Forcas Apparels, the partnership firm was converted into a private limited company under the
Companies Act, 2013 under the name and style of ‘Forcas Studio Private Limited’ and a certificate of incorporation dated
January 12, 2024 was issued by the Registrar of Companies, Central Registration Centre. Subsequently, pursuant to a
resolution passed by Board of Directors in their meeting held on February 20, 2024, and by the Shareholders at an Extra¬
Ordinary General Meeting held on February 23, 2024. Company was converted into a public limited company and
consequently the name of Company was changed to ‘Forcas Studio Limited’ and a fresh certificate of incorporation dated
April 5, 2024 was issued by Registrar of Companies, Central Processing Centre. The corporate identification number of
Company is U14101WB2024PLC267500.
This Company is Conned upon conversion of M/s. Forcas Apparels, a partnership firm having its registered office al B-
3/71C/161. BBT Road, Khalpool, Tara Maa Tower, P.O Gobmdapur, Maheshlala, Kolkata - 700141, and the business
along with all its assets, liabilities, rights, licenses, obligations and entitlements including properties being transferred to and
vested in the company as a going concern.
1. Significant Accounting Policies
1.1. Basis of preparation of financial statements
The financial statements of the company have been prepared under the historical cost convention, in accordance with
generally accepted accounting principles in India (Indian GAAP) on an accrual basis. The company has prepared these
financial statements to comply in all material respects with the accounting slandards notified under the Companies
(Accounts) Ruies, 2014, and the relevant provisions of the Companies Act, 2013, to the exlent applicable and the guidance
notes, standards issued by the Institute of Chartered Accountants of India. Accounting policies have been consistently
applied except where a newly issued accounting standard is initially adopted or a revision (o an existing accounting standard
required a change in the accounting policy hitherto in use.
1.2. Inventories
Inventories, if any, all trading goods arc valued at lower of cost and net realizable value. Cost of inventories is determined on
first in first oul basis. Scrap is valued al net realizable value. Nel realizable value is the estimated selling price in the ordinary
course of business.
1.3. Cash Flow Statement
Cash flows if applicable are reported using the indirect method, whereby profit / (loss) before extraordinary items and (ax is
adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from operating, investing and financing activities of the Company arc segregated based on the
available information.
1.4. MATERIAL EVENTS (ifOccurred) occurring after (he Balance Sheet dale are taken into cognisance.
1.5. PRIOR PERIOD AND EXTRAORDINARY ITEMS AND CHANGES IN ACCOUNTING POLICIES having material
impact on the financial affairs of the Company are disclosed, (if applicable)
1.6. Depreciation
Depreciation on Property, Plant & Equipment is determined based on the estimated useful life of the assets using the written
down value method as prescribed under the schedule II to the Companies Act, 2013. Individual assets costing less titan Rs.
5000.00 or less are depreciated within a year of acquisition. Deprecialion on assets purchased/sold during the period is
proportionately charged. Leasehold land is amortized on a straight line basis over the period of lease. Intangible assets, if
any, are amortized over their useful life on a straight line method.
W.D.V.of Partnership Finn (Forcas Apparels) which is converted in Pvt. Limited Company viz. Forcas Studio Pvt Ltd has
been carried Forward as Gross Carrying Amount in Schedule Plant, Property & Equipment and accordingly depreciation has
been charged.
1.7. Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue
can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Sale of goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been
passed to the buyer, usually on delivery of the goods. The company collects applicable taxes on behalf of the government
and, therefore, these are not econoimc benefits flowing to the company. Hence, they are excluded from the revenue.
Income from Job work/Services (Where Applicable)
Revenue from Job work/ Services is recognized when the contractual obligation is fulfilled and goods/services are delivered
to the contractee.
Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate
of interest. Interest income is included under the head “Other Income” in the statement of profit and loss.
1.8. Property . Plant & Equipment. Intangible assets and capital work in progress
Property, Plant & Equipment are stated at cost, after reducing accumulated depreciation and impairment up to the date of the
Balance Sheet. Direct costs are capitalized until the assets are ready for use and include financing costs relating to any
borrowing attributable to acquisition of construction of those Property, Plant & Equipment which necessarily take a
substantial period of time to get ready for their intended use. Capital work in progress includes the cost of Property, Plant &
Equipment that arc not yet ready for their intended use. Intangible assets, if any, are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated amortization and impairment.
W.D.V.of Partnership Firm (Forcas Apparels) which is converted in Pvt. Limited Company viz. Forcas Studio Pvt Ltd has
been carried Forward as Gross Carrying Amount in Schedule Plant, Property & Equipment.
1.9. Transaction in Foreign Currencies :
Transactions in Foreign currencies are recorded at exchange rates prevailing on the date of the transaction. Monetary items
denominated in foreign currency are restated at the exchange rate prevailing on the Balance Sheet date. Exchange differences
arising on settlement of transactions and/ or restatements are dealt with in the Profit and Loss Statement.
1.10. Government giants
Grants and subsidies (if received) from the government are recognized when there is reasonable assurance that (i) the
company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.
When the grants or subsidy related to revenue, it is recognized as income on a systematic basis in the statement of profit and
loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant
relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life
of the related asset.
Government grants of the nature of promoters’ contribution are credited to capital reserve and treated as a part of the
shareholders5 fund.
1.11. Investments :
Investments (Where Applicable ), which are readily realizable and intended to be held for not more that 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. 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 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.
1.12. Employee benefits
Short Term benefits arc recognized as an expense at the undiscountcd amount in the statement of Profit and Loss of the year
in which related service is rendered. Retirement benefits in form of gratuity, leave encashment etc. will be accounted for on
accrual basis. The company has not incurred any liabilities in this respect till the end of the year.
1.13. Borrowing Costs :
Borrowing cost (if applicable) attributable to the acquisition and construction of qualifying assets are added to the cost up to
the date when such assets are ready for their intended use. Other borrowing costs are recognised as expense in the period in
which these are incurred.
1.14. Earning Per Share
Earning per share arc calculated by dividing the net profit or loss after taxes for the period attributable to equity shareholders
by the weighted average number of equity shares outstanding during the period. For the purpose of calculating, diluted
camings per share, the net profit/ (loss) for the year attributable to equity shareholders and weighted average number of
shares outstanding during the year are adjusted for the effects of dilutive potential equity shares.
1.15. Taxes on Income
Tax expenses comprise 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. The tax rates and tax laws used to compute the amount are those
that arc enacted or substantively enacted, at the reporting date.
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.
Deferred tax liabilities arc recognized for all taxable timing differences. Deferred tax assets arc recognized for deductible
liming 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 arc recognized only if there is virtual certainty supported by convincing evidences
that they can be realized against future taxable profits. Deferred tax assets are reviewed at each reporting date.
1.16. Impairment Loss
At each Balance Sheet date the Company assesses whether there is any indication that assets may be impaired. If such
indication exists, the company estimates the recoverable value. If the carrying amount of the Assets exceeds, its recoverable
amount, and impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount.
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