1. Corporate Information:
CWD Limited ('the Company'), having its registered office in Mumbai, Maharashtra was incorporated on May 30, 2016. CWD stands for Connected Wireless Devices. Our Company is Information and Communication Technology (ICT) based company that designs, develops and sells integrated solutions combining the power of software and electronics. Our Company is registered as a start-up with MSME/DIPP bearing certificate No. DIPP1963. Our company got listed on the BSE-SME exchange, startup platform on 13th October 2021.
2. Significant accounting policies:a. Basis of Presentation of Financial Statements
i. The financial statements have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards prescribed under Section 133 of the Companies Act, 2013 ('Act') and other provisions of the Act (to the extent notified). The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles. The Company follows the mercantile systems of accounting and recognizes income and expenditure on an accrual basis except stated otherwise.
ii. The preparation of the financial statements in conformity with the Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting periods. These estimates are based upon the Management's best knowledge of current events and actions. Actual results could differ from these estimates.
b. Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Although, these estimates are based upon management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amount of assets & liabilities in future period.
c. Property Plant and Equipment:
i. Tangible Assets
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management. The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:
Office equipment's 5 years Computers 3 years
Motor Car 5 years
ii. Intangible Assets (including Intangible under development)
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. Research costs are expensed as incurred.
Internally-generated intangible assets
An internally-generated intangible asset arising from development is recognized if, and only if, all the followings have been demonstrated:
> The technical feasibility of completing the intangible assets so that it will be available for use or sale;
> The intention to complete the intangible asset and use or sell it;
> The ability to use or sell the intangible asset;
> How the intangible asset will generate probable future economic benefits;
> The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset and
> The ability to measure reliably the expenditure attributable to the intangible asset during the development.
Internally generated intangible assets comprise of Core Technology and Product Designs and Development.
The amount initially recognized for Core Technology is the sum of expenditure incurred towards salaries of the concerned employees connected towards development of the said Core Technology and have been attributed to respective Core Technology based upon management judgements from the date when the intangible asset first meets the recognition criteria listed above.
The amount initially recognized for Product Designs and Development is the sum of expenditure incurred towards salaries of the concerned employees connected towards development of the said Product Designs and development attributed to respective Product Designs and Development based upon management judgements, amount of direct expenditure incurred towards development of the components of the designs by the vendors and other expenses incurred from the date when the intangible asset first meets the recognition criteria listed above.
The estimated useful lives of intangible assets are as follows:
Core technology 6 Years
Product designs and development 3 Years
d. Investments:
Non-Current investments are stated at cost. Provision for diminution in the value of Non-Current Investments is made only if such a decline is other than temporary.
e. Inventories:
Items of inventories are valued at lower of cost and net realizable value. Cost is ascertained on weighted average basis. Such costs include material cost and other costs incurred in bringing the goods to their present location and condition. Goods in transit are valued at cost, which represents the costs incurred up to the stage at which the goods are in transit.
f. Foreign Currency Transactions
i. Initial recognition:
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the standard exchange rate determined at the transaction date.
ii Conversion:
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
iii. Exchange differences:
The Company accounts for exchange differences arising on translation/ settlement of foreign currency monetary items as below:
> Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.
All other exchange differences are recognized as income or as expenses in the period in which they arise.
g. Revenue Recognition:
> Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and it can be reliably measured.
> Revenue from domestic sales is recognized on dispatch, which coincides with transfer of significant
risks and rewards to customers and stated net of taxes and returns, as applicable. Revenue from
exports is recognized when the significant risks and rewards of ownership of goods have been passed to customers.
> Revenue for fixed-price contracts is recognized using percentage-of-completion method and the
same is arrived in proportion of completed performance obligations which bears to total
performance obligations. The Company uses estimate to arrive at the cost to completion after considering fair estimates of goods and services to be procured/consumed for completion of the contract. Unearned revenue represents billings in excess of revenues. Costs incurred in relation to unearned revenue are considered as a part of inventory.
> Income from other services rendered is recognized on due dates of the relevant contracts and is exclusive of tax, wherever recovered.
h. Employee Benefits
> The company accounts for salaries on accrual basis. There are no other obligations for the company to the contribution payable as provident funds. But the company provides HRA as per guidelines under prescribed rules.
> The Company have provided for its Gratuity obligation from current year. The present value of the obligation of gratuity is determined based on an actuarial valuation conducted by an independent actuary, using the projected unit credit method. Actuarial gains and losses on such valuation are recognized immediately in the Statement of Profit and Loss.
i. Research and development:
All Research cost are expenditure for the year incurred. However, research and development costs are capitalized once the “asset” being developed has met requirements of technical and commercial feasibility to signal that the intangible Development likely to either be brought to market or sold.
j. Earnings per Share:
The basic earnings per share is computed by dividing the net profit or loss attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) and the weighted average number of equity shares outstanding during the year are adjusted for effects of all dilutive potential equity shares, except where the results are anti-dilutive. The number of shares and potentially dilutive equity shares are adjusted for share splits and bonus shares issued including for changes effected prior to the approval of the financial statements by the Board of Directors.
k. Accounting for Taxes:
Current Tax:
Provision for current tax is made and retained in the accounts on the basis of estimated tax liability as per the applicable provisions of the Income Tax Act, 1961.
Deferred Tax:
Deferred tax liabilities are recognized for all taxable temporary difference Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that that taxable profit will be available against which the deductible temporary differences, and carry forward of unused tax credit and unused tax losses can be utilized.
l. Provisions, Contingent Liabilities & Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes to the Financial Statements. Contingent assets are neither recognized nor disclosed in the Financial Statements.
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