2. Significant accounting policies
a. Basis of preparation of Financial Statements
(i) Financial statements have been prepared under the Historical Cost Convention in accordance with the
Generally Accepted Accounting Principles and to comply with Accounting Standards referred to in
Section 133 of the Companies Act 2013 read with Rule 7 of Companies (Accounts) Rules 2014 to the
extent applicable.
(ii) The Company follows the mercantile system of accounting and recognizes the income and
expenditure on accrual basis.
(iii) All assets and liabilities have been classified as Current or Non-current as per Company’s normal
operating cycle. Based on the nature of products and time between acquisition of assets/materials for
processing and their realization in cash and cash equivalents, the Company has ascertained its operating
cycle being a period of one year for the purpose of classification of assets and liabilities as current and
non-current.
(iv) The accounting policies adopted in the preparation of financial statements are consistent with those
of previous years. The financial statements are presented in Indian Rupee, unless otherwise stated.
b. Use of Estimates
The preparation of financial statements requires management to make certain estimates and
assumptions that affect the amount reported in the financial statements and notes thereon, disclosure of
contingent liabilities on the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Difference between the actual results and estimates are recognized
in the period in which the results are known/ materialized.
c. Going Concern
The financial statements have been prepared on a going concern basis
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d. Revenue Recognition
Sales
Sales are stated at net of returns, trade discounts and Goods and Services Tax (GST). Revenue from sale
of traded and manufactured goods including domestic and export sales are recognized when significant
risks and rewards of ownership of the goods have passed to the buyer which coincides with delivery or
dispatch of the goods as per the terms of sale and are recorded net of returns , trade discounts and
Goods and Services Tax (GST)
Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and
the rate applicable.
e. Inventories
Raw Materials and Finished Goods and Stock in process are values at Cost or Net Realiasable value,
whichever is less, In respect of Raw material cost have been arrived on FIFO basis. In the case of Finished
Goods and Stock in progress, cost has been arrived at on actual cost basis. The cost of inventories
comprise of cost of purchase and other costs in bringing the inventory to their present location and
condition.
f. Property, Plant and Equipment and intangible assets
Property, Plant and Equipment
All items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation
and accumulated impairment losses, if any.
Subsequent costs are included in the carrying amount of asset or recognized 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
expenses are charged to the Statement of Profit and Loss during the year in which they are incurred.
Gains or losses arising on retirement or disposal of assets are recognized in the Statement of Profit and
Loss.
Intangible Assets:
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization.
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the intended use and net charges on foreign exchange contracts and adjustments arising from exchange
rate variations attributable to the intangible assets.
Capital work in progress & Intangible asset under development
Projects under which are not yet ready for their intended use are carried at cost, comprising direct cost,
related incidental expenses and attributable interest.
g. Depreciation
Depreciation on Property, Plant and Equipment and intangible assets is provided to the extent of
depreciable amount on the Straight line method. Depreciation is provided based on the useful life of
assets as prescribed in schedule II to the Companies Act, 2013. Proportionate depreciation is charged for
additions/deletions during the year.
h. Foreign Exchange Income
Initial recognition
Transactions in foreign currencies entered into by the Company and its integral foreign operations are
accounted at the exchange rates prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet date
Assets and Liabilities are translated at the exchange rate prevailing on the Balance Sheet date. Non¬
monetary items are carried at historical cost. Revenue and expenses are translated at the exchange
rates prevailing during the year. Exchange differences arising out of these translations are charged to
the Statement of Profit and Loss.
Treatment of exchange differences
Foreign-currency denominated monetary assets and liabilities if any are translated at exchange rates in
effect at the Balance Sheet date. The gains or losses resulting from the transactions relating to purchase
of current assets like Raw Material or other products etc. are included in the Statement of Profit and
Loss. Revenue, expense and cash-flow items denominated in foreign currencies are translated using the
exchange rate in effect on the date of the transaction.
i. Employee Retirement Benefits
Defined contribution plan
Company’s contribution to Provident fund and Employee State Insurance, labour welfare fund are
charged to statement of Profit and Loss.
Defined benefit plan
Company's Gratuity liability is actuarially determined by projected unit credit method, Liability or asset
& Expenses or gain are recognized in the balance sheet and statement of profit or loss as per the actuarial
report in accordance with AS 15 Employee Benefits
j. Borrowing Cost
Borrowing costs include interest and amortisation of ancillary costs incurred. Costs in connection with
the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the borrowing. Borrowing costs, allocated
to and utilised for qualifying assets, pertaining to the year from commencement of activities relating to
construction / development of the qualifying asset upto the date of capitalisation of such asset are added
to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of
Profit and Loss during extended periods when active development activity on the qualifying assets is
interrupted.
k. Leases
Leases arrangements, where the risks and rewards incidental to ownership of an asset substantially vest
with the lessor, are classified as operating leases and the lease rentals thereon are charged to the
Statement of Profit and Loss on accrual basis over the period of the lease on a straight line basis. Assets
acquired under finance lease arrangements are recognised as an asset and a liability is set up at the
inception of the lease, at an amount equal to lower of the fair value of the leased assets or the present
value of the future minimum lease payments.
l. Segment information
The Company operates in a single reportable business segment i.e Domestic Appliances and substantially
operations are in India the company has considered its business segment as the primary reporting
segment on the basis that the risk and returns of the Company is primarily determined by the nature of
products and services.
The Company has identified "Domestic Appliances" as a only reportable segment
m. Earnings per share
The basic earnings per share is computed by dividing the net profit or loss after tax for the period
attributable to equity share holders for the year by the weighted average number of equity shares
outstanding during the year. There are no potentially dilutive shares.
n. Taxes on income
Current Tax:
Income taxes are calculated using the tax effect accounting method where taxes are accrued in the same
period the related revenues and expenses arise. A provision is made for income tax annually based on
the tax liability computed after considering tax allowances and exemptions.
Deferred Tax:
The difference that result between the profit offered for income tax and the profit as per the financial
statements are identified and thereafter a deferred tax asset or liability is recorded for timing difference
namely the differences that originate in one accounting period and get reversed in another based on the
tax effect of the aggregate amount being considered. The tax effect is calculated on the accumulated
timing differences at the end of an accounting period based on prevailing enacted or substantially
enacted regulations. Deferred tax assets/liability are recognised only if there is reasonable certainty
and virtual certainty supported by convincing evidence in case of unabsorbed depreciation/carry-
forward losses that they will be realized and are reviewed for the appropriateness of their respective
carrying values at each balance sheet date.
o. Impairment of Assets
The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is
any indication of impairment. If any indication exists, the assets recoverable amount is estimated. An
impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount.
The recoverable amount is the greater of the assets net selling price and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value based on the average pre-tax
borrowing rate of the country where the assets are located, adjusted for risks specific to the asset. After
impairment, depreciation is provided on the assets revised carrying amount over its remaining useful life.
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