SIGNIFICANT ACCOUNTING POLICIES
1. METHOD OF ACCOUNTING
The company adopts the accrual method and historical cost concept in the preparation of the accounts in
accordance with generally accepted accounting principles.
2. INCOME/ EXPENDITURE RECOGNITION
(a) INCOME -
Income is recognized on Accrual basis to depict the actual transfer of promised goods or services to
customers in an amount that reflects the consideration to which entity expects to entitled in exchange of
those goods or services.
(b) EXPENDITURE -
All the expenses are accounted for an accrual basis.
3. PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipments are stated at cost (including expenses related to acquisition and
installation) less depreciation. Impairment loss is provided to the extent of the carrying amount exceeds
their recoverable amount. An impairment loss is charged to the Profit & Loss Account in the year in which
an asset is identified as impaired. However, during the year no impairment loss recognized.
The Company depreciates property, plant and equipment over their estimated useful lives. The estimated
useful lives of assets were based on technical evaluation, the management believes that the useful lives
as given above best represent the period over which management expects to use these assets. Hence,
the useful lives for these assets may be different from the useful lives as prescribed under Part C of
Schedule II of the Companies Act 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed ateach financial year end and adjusted prospectively, if appropriate.
4. INTANGIBLE ASSETS
Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are
amortized over their respective individual estimated useful lives on a straight-line basis, from the date
that they are available for use.
The estimated useful life of an identifiable intangible asset is based on a number of factors including the
effects of obsolescence, demand, competition, and other economic factors (such as the stability of the
industry and known technological advances), and the level of maintenance expenditures required to
obtain the expected future cash flows from the asset.Amortization methods and useful lives are reviewed
periodically, including at each financial year end. However, during the year, no amortization of intangible
assets is booked, since, as per management, the asset is considered to have an indefinite life.
5. DEPRECIATION
The company systematically allocated depreciation on a depreciable asset over its useful life. The
depreciable amount of an asset is the cost of an asset or other amount substituted for cost, less its
residual value. The useful life of an asset is the period over which an asset is expected to be available for
use by an entity, or the number of production or similar units expected to be obtained from the asset by
the entity. The Company has adopted useful life of assets as prescribed under Schedule II to the
Companies Act, 2013. Depreciation on additions /deductions to fixed assets is being provided on pro-rata
basis from/to the month of acquisition /disposal.
6. IMPAIRMENT LOSS
Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable
amounts. Recoverable amount is the higher of an asset’s net selling price and its value in use. Value in
use is the present value of estimated future cash flows expected to arise from the continuing use of the
asset and from its disposal at the end of its useful life.
Net selling price is the amount obtainable from sale of the asset in an arm’s length transaction between
knowledgeable, willing parties, less the costs of disposal. During the year there is no impairment loss of
any asset in the company.However during the year no impairment loss recognized .
7. INVESTMENTS
Current investments are at lower of cost and quoted/fair value, computed category wise. Long Term
investments are stated at cost. Provision for diminution in the value of long-term investment is to be made
only if such a decline is other than temporary.
However there are no Investments in the company during the financial year.
8. INVENTORIES
Items of inventories are measured at lower of cost or net realizable value. Cost of inventories comprises of
cost of conversion and other costs incurred in bringing them to their respective present location and
condition.
9. TRADE RECEIVABLES & TRADE PAYABLES
Trade receivables & Trade Payables are stated at book Values. The company has not prepared a
classification ageing schedule of trade payable or categorized it into MSME and Non-MSME. Similarly, they
have not conducted a classification ageing schedule for trade receivables or determined their classification
as good, doubtful, or credit impaired. The company has not received confirmation on classification from
their creditors regarding their MSME/Non-MSME Status.
10. RETIREMENT BENEFITS
(a) The company records the liability of Provident Fundand ESI as per the accrual basis.
(b) Provision for gratuity has been made based on the basis of report of Actuarial valuer obtained by the
company.
11. TAXATION
No provision for current taxes per applicable provisions of the Income Tax Act, 1961 is required to be made
in view of no taxable total income during the year on account of brought forward losses.
Deferred income taxes resulting from timing difference between book and taxable profit is accounted for
using the rates and laws that have been enacted or substantially enacted as at Balance Sheet date. The
deferred tax asset is recognized and carried forward only to the extent that there is a future taxable
income.
|