| A. Basis of preparation of financial statements
The financial statements of the Company have been prepared under the
historical cost convention, The financial statements of the Company
have been prepared and presented in accordance with the generally
accepted accounting principles in India (Indian GAAP) under the
historical cost convention on an accrual basis. The Company has
prepared these financial statements to comply in all material respects
with the Accounting Standards specified under Section 133 of the
Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules,
2014. The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, unless otherwise
stated.
B. Use of estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosures of
contingent liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the year. Example of
such estimates includes future obligations under employee retirement
benefit plans, estimated useful life of fixed assets, warranty on
sales, provision for obsolete and slow moving inventory, etc. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in current and future periods.
C. Current-Non-current classification
All assets and liabilities are classified into current and non-current.
Assets
An asset is classified as current when it satisfies any of the
following criteria:
1. It is expected to be realized in, or is intended for sale or
consumption in ,the company's normal operating cycle;
2. It is held primarily for the purpose of being traded;
3. It is expected to be realized within 12 months after the reporting
date; or
4. It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least 12 months after
the reporting date.
Current assets include the current portion of non-current financial
assets.
All other assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the
following criteria:
1. It is expected to be settled in the company's normal operating
cycle;
2. It is held primarily for the purpose of being traded;
3. It is due to be settled within 12 months after the reporting date;
or
4. The company does not have an unconditional right to defer settlement
of the liability for at Least 12 months after the reporting date. Terms
of liability that could, at option of the counterparty, result in its
settlement by the issue of equity instruments do not affects its
classification.
Current liabilities include current portion of non-current financial
liabilities. All other liabilities are classified as non-current.
D. Revenue recognition
Revenue from sale of goods is recognized on the basis of terms and
conditions with respective customers which coincides with the transfer
of significant risks and rewards to the customer. Sales are stated at
invoice value net of sales tax, turnover/trade discount, returns and
claims, if any.
Interest income is recognized on time proportion basis considering the
amount outstanding and the rate applicable.
E. Inventories
The stock in trade are valued at the lower of cost and net realizable
value. Cost includes purchase price including duties and taxes (other
than those subsequently recoverable by the enterprise from tax
authorities) freight inward and other expenditure directly attributable
to bring the inventory to the present location and condition. Cost is
determined on first in first out basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs necessary to make the sale.
F. Fixed assets
There are no fixed assets in the company.
G Foreign currency transactions
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of the respective transactions. Monetary foreign
currency assets and liabilities remaining unsettled at the balance
sheet date are translated at the rates of exchange prevailing on that
date. Gains/ (losses) arising on account of realisation/ settlement of
foreign exchange transactions and on translation of foreign currency
assets and liabilities are recognised in the statement of Profit and
Loss.
H. Employee benefits
Short term employee benefits
All employee benefits payable/available within twelve months of
rendering the service are classified as short-term employee benefits.
Benefits such as salaries, wages and bonus etc., are recognised in the
Profit and Loss Account in the period in which the employee renders the
related service.
Defined benefit plan
Gratuity is a defined benefit plan. The present value of obligations
under such defined benefit plans is determined based on actuarial
valuation carried out by an independent actuary at the end of the year
using the projected unit credit method. The obligation is measured at
the present value of estimated future cash flows. The discount rates
used for determining the present value of obligation under defined
benefit plans, is based on the market yields on Government securities
as at the balance sheet date, having maturity periods approximating to
the terms of related obligations. Actuarial gains and losses are
recognised immediately in the Profit and Loss Account.
I. Taxation
Income tax expenses comprise current tax (i.e. the amount of tax for
the period determined in accordance with the income tax laws) and
deferred tax charge or credit (reflecting the tax effects of timing
differences between the accounting income and the taxable income for
the period). The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognised using tax rates that
have been enacted, or substantively enacted, by the Balance Sheet date.
Deferred tax assets are recognised only to the extent there is
reasonable certainty that the assets can be realised in the future,
however, where there is unabsorbed depreciation or carry forward loss
under taxation laws, deferred tax assets are recognised only if there
is virtual certainty of realisation of such assets. Deferred tax assets
are reviewed as at each Balance Sheet date and written down or written
up to reflect the amount that is reasonably/ virtually certain (as the
case may be) to be realised.
J. Provisions and contingent liabilities
A provision is created when there is a present obligation as a result
of a past event that probably requires an outflow of resources and a
reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on best estimate required to settle the obligation at the balance
sheet date. These are reviewed at each balance sheet date and adjusted
to reflect the current best estimates. A disclosure for a contingent
liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of
resources. When there is a possible obligation or a present obligation
in respect of which the likelihood of outflow of resources is remote,
no provision or disclosure is made.
K. Earnings per share
Basic earnings per share are calculated by dividing the net profit/
(loss) attributable to equity shareholders for the year by the weighted
average number of equity shares outstanding during the year.
L. Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposit with
banks, other short term highly liquid investments with original
maturities of three months or less.
M. Legal and professional fees includes auditor's remuneration:
PARTICULARS FOR F.Y. 2014 F.Y. 2013-14
Auditors Fees (excluding Service Tax) 50000/- 50000/-
N. Related party disclosures:
Related parties with whom transactions have taken place during the
year: NIL
O. Previous year's comparative figures have been regrouped / recasted
wherever necessary.
P. The balances of sundry debtors, sundry creditors, Loans and
advances are subject to confirmations or reconciliation from respective
parties
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