Note 1 C: Significant accounting policies and key accounting estimates
(A) Significant accounting policies
j Current/non-current classification
The Company presents assets and liabilities In the balance sheet based an current and nan-current classification. An asset is treated os current when it Is:
a) expected to be realised or Intended to be said or consumed in normal operating cyde;
b) held primarily for the purpose of trading;
c] expected to be realised within twelve months after the reporting period; or
d] cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when It is:
a) expected to be settled in normal operating cycle;
b) held primarily for the purpose of trading;
c) due to be settled within twelve months after the reporting period; or
d) there is no unconditional right to defer the settlement of the liability far at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operai: ng cycle Is the time between the acquisition of assets/materlals far processing and their realisation In cosh and cash equivalents. As the Company's normal operating cyde Ls not dearly Identifiable. It Is assumed to be twelve manthu
Z Property, plant and equipment
Property, plant and equipment are earned at cost less accumulated depreciation and Impairment losses, tr any. Depreciation In current year Is not charged due to very minor amount. The cost of Property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any Impart duties and other taxes (other than those subsequently recoverable from the tax authorities).
3 Inventories
Inventories are valued at lower of cost and net realisable value. Cost Is determined on a First m First out (FIFO). Cost Includes cost of conversion an d oLhcr costs incurred In bringing the inventories to their present location and conditio a Obsolete, slow moving and defective inventories are identified and provided for
Vet Realizable value ls the estimated selling price in the ordinary course of bus ness, less estimated cost of completion and estimated costs necessary to make sale.
4 Revenue recognition
Revenue is recognised to the extent it Is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue Is measured at the fair value of the consideration received or receivable, taking Into account contractually defined terms of payment and excluding taxes or duties collected an behalf of the government. The Company has concluded that rt Is the principal In all of Its revenue arrangements since It Is the primary obligor In all the revenue arrangements as It has pricing latitude and Is also exposed to Inventory and credit risks.
Sale of products
Revenue from the sale of products Is recognised when the significant risks and rewards of ownership of the products have passed to the bayer, usually on delivery of the products. Revenue from the sale of products Is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
5 Cash and cash equivalents
Cash and cash equivalents In the balance sheet comprise cash at banks and on hand and term deposits with an or.glr.al maturity of three months or less, which are subject to an insignificant risk of changes in value.
6 Taxeson Income
Tax on Income comprises current tax. It is recognised In statement of profit and loss except to the extent that tt relates to a business combi nation, or Items recognised directly In equity or In other comprehensive income.
Current lax
Tax on income for the current period Is determined on the basts on estimated taxable Income and tax credits computed In accordance with the provisions of the relevant tax Laws and based on the expected outcome of assessments / appeals. C urrertt Income tax assets and liabilities arc measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the repcrting date. Management periodically evaluates positions taken in the tax returns with respect to situations In which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax Is recognized for the future tax consequences af deductible temporary differences between the carrying values of assets and liabilities and thetr respective tax bases at the reporting date, using the tax rates and laws that ire enacted or substantively enacted as on reporting date. Deferred tax liability are generally recorded for all temporary timing differences. There Is Ho deffered tax In current year.
7 Earnings Per Share
*1116 basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the period by the weighted average number of equity shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for drrlvl.pg basic earnings per share, and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have been Issued at a later date. In computing dtlutive earning per share, only potential equity shares that are dilutive and that would, if issued, either reduce future earningi per share or Increase loss per share, are Induded.
(B) Key accounting estimates
1 Taxes
Deferred tax assets are recognised for unused tax credits to the extent that It is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
2 Property, Plant and Equipment
The carrying values of Property, plant and equipment have been disclosed tn Note 2.
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