Significant accounting policies
Note:
1. Company Overview
M/s KODY TECHNOLAB LIMITED, incorporated on 5th Day of
May 2017, having its registered office at 2nd floor, block-J,
safal mondeal reatil park, Nr. iscon mall, Nr. rajpath club, S G
Highway, bodakdev, ahmedabad-380054. Kody Technolab
Limited is a leading, publicly traded robotics and AI solutions
provider, specializing in enterprise-level projects and mobile
application development. Known for its expertise in artificial
intelligence, machine learning, and advanced robotics,
Significant accounting policies
a. Use of estimates
The preparation of the financial statements in conformity
with generally accepted accounting principles in India
requires management to make estimates and assumption;
that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the
date of the financial statements, and the reported amounts
of revenues and expenses during the reporting period. The
Company's most significant estimates include those on
the useful life of assets, deferred taxes and provision for
taxes. Management believes that the estimates used in the
preparation of the financial statements are prudent and
reasonable. Actual results could differ from these
estimates. Appropriate changes in estimates are made as
management becomes aware of changes in
circumstances surrounding the estimates.
b. Rounding of amounts
All amounts disclosed in the financial statements and
notes have been rounded off to the nearest lakh as per the
requirement of schedule III (except per share data), unless
otherwise stated.
c. Current-non-current classification
Assets
An asset is classified as current when it satisfies any of
the following criteria:
a. it is expected to be realised in, or is intended for sale or
consumption in, the company’s normal operating cycle;
b. it is held primarily for the purposes of being traded;
c. Invetory has been valued at cost or market price which
ever is lower.
d. it is cash or cash equivalent unless it is restricted from
being exchanged or used to settle a liability for at least 12
months after the reporting date.
Current assets include the current portion of non-current
financial assets. All other assets are classified as non-
current.
Liabilities
A Lability is classified as current when it satisfies any of
the following criteria:
a. it is expected to be settled in the company's normal
operating cycle;
b. it is held primarily for the purposes of being traded;
c. it is due to be settled within 12 months after the
reporting date; or
d. the company does not have an unconditional right to
defer settlement of the liability for at least 12 months after
the reporting date. Current liabilities include the current
portion of non-current financial liabilities.
All other liabilities are classified as non-current.
i. Current Assets, Loans and Advances
In the opinion of the management, the value of all current
assets, loans, advances and other realizables are not less
than their realizable value in the ordinary course of
business.
?. Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation. Cost includes all incidental
costs related to acquisition and installation, Software
development, Moulds,other pre-operative costs and interest
on borrowed funds, if any, used to finance the acquisitions
of fixed assets and is capitalized up to the date the assets
are ready for commercial use. Items in the nature of Fixed
Assets below Rs 2000 are not Capitalized
Depreciation is provided over the estimated useful life of
the assets using written down value method, except in case
of moulds & software development expenses has been
amortised taking in to account life of 5 years on straight
line method basis. The rates of depreciation used are those
which have been calculated as per the method specified in
Schedule II of the Companies Act, 2013. The new
Companies Act prescribes that the asset should be written
off over its useful life as estimated by the management and
provides the indicative useful lives for the different class of
assets. Other assets are depreciated over their balance
useful life.
Investments
All Investments are stated at cost of acquisition
Impairment of assets
The carrying values of assets / cash generating units at
each balance sheet date are reviewed for impairment if
any indication of impairment exists.
If the carrying amount of the assets exceed the estimated
recoverable amount, an impairment is recognized for such
excess amount. The impairment loss is recognized as an
expense in the statement of profit and loss, unless the asset is
carried at revalued amount, in which case any impairment
loss of the revalued asset is treated as a revaluation decrease
to the extent a revaluation reserve is available for that asset.
When there is indication that an impairment loss recognized
for an asset (other than a revalued asset) in earlier
accounting periods no longer exists or may have decreased,
such reversal of impairment loss is recognized in the
Statement of Profit and Loss, to the extent the amount was
previously charged to the Statement of Profit and Loss. In
case of revalued assets such reversal is not recognized.
h. Cash and cash equivalents
Cash equivalents represent highly liquid investments with
remaining maturities, at the date of purchase/investment, of
three months or less. As of the balance sheet date, the
Company had no such investment. Cash and cash equivalents
comprise of cash in hand and balance in bank accounts.
i. Inventories
1. Inventories are valued at cost or net realisable value,
whichever is lower. Stock of finished goods, traded goods,
raw materials, own manufactured components, work in
progress and stores are determined on First In First Out
basis.
2. Obsolete, defective and unserviceable stocks are duly
provided for.
j. Revenue recognition
The Company uses the percentage-of-completion method in
accounting for its fixed-price contracts. Use of the
percentage-of-completion method and ongoing supply order
of product onhand requires the Company to estimate the
efforts or costs expended to date as a proportion of the total
efforts or costs to be expended. Efforts or costs expended
have been used to measure progress towards completion as
there is a direct relationship between input and
productivity.Revenue on time and material contracts are
recognized as there lated services are performed and revenue
from the end of the last invoicing to the reporting date is
recognized as unbilled revenue.
Further, the company uses significant judgments while
determining the transaction price allocated to performance
obligations using the expected cost plus margin approach.
k. Other operational revenue
Other operational revenue represent income earned from
the activities incidental to the business and is recognized
when the right to receive the income is established as per the
terms of the contract.
l. Interest
Interest income is recognized on a time proportion basis by
considering the amount outstanding and rate applicable.
m. Accounting for taxes on Income
Income Tax comprises of current tax, deferred tax. Provision
for current income tax is made on the assessable income/
benefits at the rate applicable to relevant assessment year.
Deferred tax asset & liabilities are recognised for the future
tax consequences of timing differences, subject to the
consideration of prudence. Deferred tax assets & liabilities are
measured using the tax rates enacted or substantively
enacted by the Balance Sheet date. The carrying amount of
deferred tax asset/liability are reviewed at each Balance
Sheet date & recognised and carried forward only to the
extent that there is a reasonable certainty that the asset will
be realised.
n. Employee benefit
Retirement Benefits in the form of provident fund
contributions are charged to the Profit & Loss Account of the
period when the contributions to the fund are due. There are
no obligations other than the contribution payable to the
fund. Provision of Gratuity Act ,1972 are applicable to the
company . As per the actuarial valuation report taken, the
company had provide for Gratuity of Rs.4283350.848/- up to
the current year.
o. Deferred tax
The deferred tax charge or benefit and the corresponding
deferred tax liabilities and assets are recognized using the
tax rates that have been enacted or substantially enacted as
at the balance sheet date. Deferred tax assets are recognized
only to the extent there is reasonable certainty that the asset
can be realized in future, however, where there is unabsorbed
depreciation or carried forward loss under taxation laws,
deferred tax assets are recognized only if there is a virtual
certainty of realization of the assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or
written up to reflect the amount that is reasonably/virtually
certain to be realized.
p. Foreign Exchange Transactions
Transactions denominated in foreign currency are recorded
at the exchange rate prevailing on the date of transaction.
Exchange difference arising on the foreign exchange
transaction settled during the period are recognised in the
Profit & Loss Account.
Monetary items outstanding on date of Balancesheet have
been accounted at exchange rate as on that date and
difference has been settled in profit & loss account.
q. Cash Flow Statement
Cash Flows are reported using the indirect method, whereby
profit before tax is adjusted for the effects of transactions of
non-cash nature, any deferrals or accruals of past or future
operating cash receipts or payments and items of Income or
Expense associated with investing or financing cash flows.
r. Minimum Alternate Tax (MAT)
MAT credit asset is recognized where there is convincing
evidence that the asset can be realized in future. MAT credit
assets are reviewed at each balance sheet date and written
down or written up to reflect the amount that is reasonably
certain to be realized.
s. Earnings per share
The Company reports basic earnings per share (EPS) in
accordance with Accounting Standard - 20. The basic
earnings per share is computed by dividing the net profit/loss
attributable to equity shareholders and proposed share
warrant holder for the year by the weighted average number
of equity shares outstanding during the year. The Company
has no potentially dilutive equity shares outstanding during
the period.
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