(1) Company Overview
Siddhika Coatings Limited ('the Company') is incorporated in India on 20 July 2010. The comapany is an authorized marketer for SK Kaken Ltd. ('SKK') products, a renowned coatings and pigments manufacturer based in Japan. Having been associated with SKK for over a decade, company have gained the reputation of being one of the well-known suppliers of their products in India. We also provide application services which include preparing and coating interior as well as exterior surfaces of civil structures using organic and inorganic architectural textured pigments and technical-grade functional coatings.
(2) Summary of significant accounting policies
1 Basis of Preparation
The standalone financial statements have been prepared in accordance with applicable accounting standards as notified by the Companies (Accounting Standards)Rules, 2021 and the relevant requirements of the Companies Act 2013.
The standalone financial statements have been prepared on an accrual basis and under the historical cost convention and on the basis of going concern in accordance with the applicable accounting standards in India.
2 Use of estimates
The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision in accounting estimates is recognised properly in current and future periods.
3 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
4 Revenue from sale of goods
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services. The Company is generally the principal as it typically controls the goods or services before transferring them to the customer. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.
5 Revenue from rendering of services
Revenue from rendering of services is recognised over time by measuring the progress towards complete satisfaction of performance obligations at the reporting period.
Earnings in excess of billing are classified as unbilled revenue, while billings in excess of earnings are classified as unearned income.
6 Interest on bank deposits
Interest on bank deposits is recognised on time proportion basis taking into account the amount outstanding and rates applicable.
7 Property, Plant & Equipments Tangible assets
Property, plant & equipments are carried at cost less accumulated depreciation and impairment (if any). Cost comprises of the purchase price and any attributable cost of bringing the assets to its working conditions for its intended use. The cost of internally constructed assets includes cost directly related to their construction.
Depreciation
Depreciation on tangible assets is provided on written down value (WDV) at the rates ands in the manner prescribed in Schedule II of the Companies Act, 2013.
Impairment
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged in the profit and loss statement in the year in which an asset is identified as impaired. The impairment loss recognised in the prior accounting period is reversed if there has been a change in the estimation of recoverable amount.
8 Inventories
Inventories are valued at lower of cost or net realisable value. Cost includes freight and other related incidental expenses net of recoverable duties and taxes, if any and is arrived at on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost to affect the sale.
9 Employee benefits Gratuity
Gratuity is a post-employment benefit and is in the nature of defined benefit plan. The liability recognised in the balance sheet in respect of gratuity is the actual value of the defined benefit obligation as at the balance sheet date as calculated by the Actuary.
Provident fund
Company makes contributions to statutory provident fund in accordance with the Employees Provident Fund and Miscellaneous Provisions Act, 1952, which is a defined contribution plan. The Company's contributions paid/payable under the scheme is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed is recognized on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees.
10 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with maturity of twelve months or less.
11 Taxation
Provision for tax comprises current and deferred tax. Current tax is provided for on the taxable income of the year at applicable tax rates. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised 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 realised. Deferred tax assets are recognised on carry forward of unabsorbed depreciation and tax losses only if there is virtual certainty with convincing evidence that such deferred tax assets can be realised against future taxable profits.
Minimum alternate tax
Minimum alternate tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.
12 Earnings/(loss) per share
Basic earnings/(loss) attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings/(loss) per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
13 Contingent liabilities and provisions
The Company creates a provision when there is a present obligation as a result of a past event where the outflow of economic resources is probable and a reliable estimate of the account of the obligation can be made.
A disclosure is made for a contingent liability when there is a:
-Possible obligation, the existence of which will be confirmed by the occurrence/non-occurrence of one or more uncertain events, not fully with in the control of the Company;
-Present obligation, where it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation;
-Present obligation, where a reliable estimate cannot be made.
14 Other notes and disclosures
The Balances of Trade payables, Loans & Advances, Other amounts payable and Security Deposits received and paid are subject to the confirmation from the respective parties.
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