NOTE 1 & 2: SIGNIFICANT ACCOUNTING POLICIES
1. COMPANY INFORMATION
The Company was originally incorporated on May 28, 2001 as a Private Limited Company as "Euphoria Infotech (India)
Private Limited” vide Registration No. 093236 under the provisions of the Companies Act, 1956 with the Registrar of
Companies, Kolkata, West Bengal. Subsequently, pursuant to a special resolution passed by the Shareholders at their
Extraordinary General Meeting held on January 18, 2023, the Company was converted from a Private Limited Company
to Public Limited Company and consequently, the name of the Company was changed to 'Euphoria Infotech (India)
Limited' and a Fresh Certificate of Incorporation consequent to Conversion was issued on May 22, 2023 by the Registrar
of Companies, Kolkata, West Bengal. The Parent company is mainly engaged in Information Technology Activity.
2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a. BASIS OF PREPARATION OF STANDALONE FINANCIAL STATEMENTS
The financial statements has been prepared and presented under historical cost convention on the accrual basis of
accounting in accordance with the Generally Accepted Accounting Principles iean India ("GAAP”) and comply with the
mandatory Accounting Standards ("AS”) specified under section 133 of the Companies Act 2013, read with Rule 7 of the
Companies (Accounts) Rules,2014 and the relevant provisions of the Companies Act 2013 ("the 2013 Act”).
The Standalone Financial Statements has been prepared by the Management to comply in all material respects with the
requirements of:
a) Section 26 of Part I of Chapter III of the Companies Act, 2013 ("the Act”);
b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as
amended ("ICDR Regulations”); and
c) The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered
Accountants of India (ICAI), as amended (the "Guidance Note”).
The Financial statements are presented in Indian Rupee (Rs.) & all the amounts included in the financial statements
have been rounded off to the nearest Lakhs upto two decimals, as required by General instructions for preparation of
Financial Statements in Division I of Schedule III of the Companies Act, 2013, except number of shares, face value of
shares, earning per shares, or wherever otherwise stated. Wherever the amount represented Rs '0.00' construes value
less than Rupees Five Hundred.
b. USE OF ESTIMATES
The preparation of financial statements is in conformity with GAAP which requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date
of financial statements and reported amount of revenues and expenses for the year. Actual results could differ from this
estimate. Difference between the actual result and estimates are recognized in the period in which result are known /
materialized.
c. CLASSIFICATION OF ASSETS AND LIABILITIES
The Revised Schedule III to the Companies Act, 2013 requires assets and liabilities to be classified as either Current or
Non-current.
(a) An asset shall be classified as current when it satisfies any of the following criteria:
• It is expected to be realized in, or is intended for sale or consumption in, normal operating cycle of the
company;
• It is held primarily for the purpose of being traded;
• It is expected to be realized within twelve months after the reporting date; or
• It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting date.
(b) All assets other than current assets shall be classified as non-current.
(c) A liability shall be classified as current when it satisfies any of the following criteria:
• It is expected to be settled in the normal operating cycle of the company;
• It is held primarily for the purpose of being traded;
• It is due to be settled within twelve months after the reporting date; or
• The company does not have an unconditional right to defer settlement of the liability for at least twelve
months after the reporting date.
(c) All liabilities other than current liabilities shall be classified as non-current.
d. PROPERTY, PLANT & EQUIPMENT
Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated
impairment losses.
The cost of an item of property, plant and equipment comprises: (a) its purchase price, including import duties and
non-refundable purchase taxes, after deducting trade discounts and rebates; (b) any costs directly attributable to
bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by
management; (c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which
it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having
used the item during a particular period for purposes other than to produce inventories during that period.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour,
any other cost directly attributable to bringing the item to working condition for its intended use.
The cost of improvements to leasehold premises, if recognition criteria are met, are capitalized and disclosed separately
under leasehold improvement.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal and retirement of an item
of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount
of the asset is recognized in Statement of profit and loss.
Subsequent cost
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that the future economic benefits associated with expenditure will flow to the Company and the
cost of the item can be measured reliably. All other subsequent cost are charged to Statement of profit and loss at the
time of incurrence.
Depreciation
Depreciation on PPE is provided on the Straight Line method computed on the basis of useful life prescribed in Schedule
II to the Companies Act, 2013 ('Schedule II') on a pro-rata basis from the date the asset is ready to put to use.
The residual values, useful lives and methods of depreciation of property plant and equipment are reviewed by
management at each reporting date and adjusted prospectively, as appropriate.
e. INVENTORIES
Inventories of finished goods are valued at cost or net realizable value ('NRV'), whichever is lower. Costs of inventories
has been determined using weighted average cost method and comprise all costs of purchase after deducting non¬
refundable rebates and discounts and all other costs incurred in bringing the inventories to their present location and
condition. Provision is made for items which are not likely to be consumed and other anticipated losses wherever
considered necessary. The comparison of cost and NRV for traded goods is made on at item Company level basis at each
reporting date. However, there is no inventory of any products.
f. LEASES
Lease payments in respect of assets taken on operating lease are charged to the Statement of profit and loss on a
straight-line basis over the period of the lease unless the payments are structured to increase in line with the expected
general inflation to compensate the lessor's expected inflationary cost increases, if any. However, there is no lease
payments during the period under consideration.
g. BORROWING COSTS
Borrowing costs attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use.
All other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalization of
borrowing costs is suspended during the extended period in which active development is interrupted. Capitalization of
borrowing costs is ceased when substantially all the activities necessary to prepare the qualifying asset for its intended
use or sale are complete. Other borrowing costs are charged to statement of profit and loss as and when incurred.
g. IMPAIRMENT OF ASSETS
At each reporting date, the Company reviews the carrying amounts of its non-financial assets to determine whether
there is any indication of impairment. If any such indication of impairment exists, then the asset's recoverable amount
is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or cash generating units
('CGU').
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in
use is based on the estimated future cash flows, discounted to their present value using a discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is
recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable amount.
Impairment losses are recognized in the Statement of profit and loss. They are allocated first to reduce the carrying
amount of any goodwill allocated to the CGU and then to reduce the carrying amounts of the other assets in the CGU
on a pro-rata basis.
For other assets, an impairment loss is reversed only if there has been a change in the estimates used to determine the
recoverable amount. Such a reversal is made only to the extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been
recognized
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