Note No 1A : Significant Accounting Policies:
a. Basis of Accounting and Preparation of Financial Statements
The Company prepared its financial statements in accordance with the Accounting Standards specified under section 133 of the Companies Act, 2013 read with Companies (Accounting Standards) Rules, 2021 (as amended). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
However, there is some regrouping as compared to previous financial year for making comparable presentation of financial statements.
b. Use of Estimates
The preparation of the financial statements in conformity with the Accounting Standards requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialised.
Requirements of the micro, Small and medium enterprises:-
We have communicated to all our creditors through our registered email for declaration as well MSME Certificate, However we have not received any communication within stipulated time. So we declare that as on 31st March 2024 there is no MSME Creditor's outstanding balance and there is no interest due to SME creditors.
c. Inventories
Stock in trade, work in progress, finished goods, packing materials, stores and spares are valued at lower of cost or net realizable value, Cost of raw materials, packing materials, and stores and spares is determined on a First In-First out (FIFO) basis and includes all applicable costs.
Stock-in-trade and finished goods are valued at lower of cost or net realizable value. Cost includes direct materials and direct cost incurred to bring the stock in ready to dispatch stage as aforesaid.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
The cost of inventories may not be recoverable if those inventories are damaged, if they have become wholly or partially obsolete, or if their selling prices have declined. The cost of inventories may also not be recoverable if the estimated costs of completion or the estimated costs necessary to make the sale have increased.
Estimates of net realisable value are based on the most reliable evidence available at the time the estimates are made as to the amount the inventories are expected to realise. These estimates take into consideration fluctuations of price or cost directly relating to events occurring after the balance sheet date to the extent that such events confirm the conditions existing at the balance sheet date.
d. Cash and Cash Equivalents (for the purpose of cash flow statement)
Cash flows are reported using Indirect Method whereby the cash flows generated from Operating, Investing and Financing activities of the company are segregated. Cash comprises cash on hand, cash/cheque in hand and demand deposits with banks and Bank overdraft.
e. PPE (Property, Plant and Equipment's)
Property, Plant and Equipment are stated at cost less accumulated depreciation (other than free hold land if any) and accumulated impairment losses thereon if any.
Depreciation is calculated on pro-rata basis on Written Down method over the standard useful lives of the asset which is in line with the useful lives prescribed in Schedule II to the Companies Act, 2013. The useful lives of each property, plant and equipment is stated below.
The carrying amount of an item of Property, plant and Equipment is derecognised on disposal. Any gain or loss arising on disposal of Property, plant and equipment is recognised in the statement of profit & loss. Depreciation is provided as below:-
Assets Useful Life (in years)
Buildings 60
Factory Buildings 30
Furniture & Fixture 10
Plant & Equipment 15
Computer 3
Vehicles 8
f. Intangible assets :
Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses thereon. The cost comprises its purchase price, borrowing cost if its criteria are met and other directly attributable cost of bringing the asset to its working condition for its intended use. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.
During the year the company is developing software which is under development and hence shown as Capital Work - in progress.
g. Revenue Recognition :
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 do not include goods and services tax (GST). Revenue is recognised when it is earned and no significant uncertainty exists as to its ultimate realisation or collection.
Revenue & Expenses from Trading & Marketing activities is recognised on accrual basis, Rate difference (Purchases/Sales) is accounted only on the receipt of necessary Credit Notes from Suppliers and/or Debit Notes from Customers or when the accounts are settled.
h. Other Income :
Interest income and Rent income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.
i. Foreign Currency transaction and translations :
Transactions in foreign currencies covering current assets and current liabilities are accounted at the exchange rates prevailing on the dates the transactions take place. Gains and losses arising out of subsequent fluctuation in exchange rates are adjusted in statement of Profit & Loss Account under appropriate heads of account. Transactions which remain unsettled at the year end are translated at year end exchange rate.
j. Investments :
Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Investment in the said partnership firm is recognised after considering the share of loss.i.e. Current capital balance as on the year end date. Cost of investments includes acquisition charges such as brokerage, fees and duties.
k. Borrowing Costs
Borrowing costs include interest; amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. 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 loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalisation of such asset is 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.
During the said financial year there is no borrowing cost incurred for purchase of capital asset and also there is no borrowing cost which is capitalised in relation to any qualifying assets.
l. Employee Benefits
a. Provident Fund :
Retirement benefit in the form of Provident fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the fund.
b. Gratuity
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit (PUC) method made at the end of each financial year. The company has created an approved Gratuity fund, which has taken a group gratuity cum insurance policy with an insurance company to cover the gratuity liability of the employees. At the end of accounting year, difference between obligation as per actuarial valuation and the fair value of plan assets is further provided.
m. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Provision for Taxes has been calculated on the basis of Section 115BAA of the Income Tax Act, 1961.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.
n. Earnings Per Share
Basic earnings per share is computed by dividing the Net Profit / (Loss) attributable to Equity Shareholders (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the Net Profit / (Loss) attributable to Equity Shareholders (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the earnings per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented.
The Company has issued 25,00,000 Equity Share warrants on preferential basis, which was approved by the members in the Extra Ordinary General Meeting held on March 4,2023. The Company has received 25% of the consideration at time of allotment. Balance 75% was received in month of May and August 2023.
|