Accounting Policies of Cosmic CRF Ltd. Company

Mar 31, 2024

Note 2: Significant Accounting Policies

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory Accounting Standards as prescribed under section 133 of the Companies Act 2013 (''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified). Accounting Policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the economic policy hitherto in use.

II. USE OF ESTIMATES :

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known and materialized.

III. PROPERTY, PLANT & EQUIPMENT:

Property, Plant & Equipments are stated at historical cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

The residual values, useful lives and methods of depreciation of tangible assets are reviewed each year and adjusted prospectively, if appropriate. Depreciation is charged based on a review by the management during the year and at the rates derived based on the useful lives of the assets as specified in Schedule II of the Companies Act, 2013 on Straight Line Method. All fixed assets costing individually up to Rs. 5,000/-are fully depreciated by the Company in the year of its capitalization.

IV. INTANGIBLE ASSETS:

Intangible Assets are stated at cost of acquisition, comprising of purchase price exclusive of taxes and duties (net of credit availed) and net of accumulated depreciation and accumulated impairment losses, if any. Accordingly, cost of computer software is amortized over the useful life using written down method over the period of 5 years.

V. VALUATION OF INVENTORIES:

Inventories are valued at Cost or Net Realisable Value whichever is lower.

a) In case of Raw Material, Stores and spares, consumables, the cost includes transportation, duties and taxes (net of GST wherever applicable) and is arrived on FIFO basis.

b) Cost of Finished Goods and Work In Process (WIP ) include the cost of raw material, cost of conversion and other manufacturing costs incurred in bringing the inventories to their present location and condition.

c) Scrap arising in course of production are valued at Net realizable value based on best available estimates available to the management.

VI. EMPLOYEE BENEFITS:

(i) Short Term

Short term employee benefits are recognized as an expense at the undiscounted amount expected to be paid over the period of services rendered by the employees to the company.

(ii) Retirement & other employee benefits

Contribution to Provident Fund, Employee State Insurance and other funds are determined under the relevant statute and charged to revenue account.

No provision for gratuity has been made as none of the employees have completed the stipulated period of service.

Earned leaves are carried forward to future periods are "short term" benefit only if the employees are entitled to either encash or utilize the benefits during the period of twelve months following the end of the accounting period (when they became entitled to the leave). In other cases the benefit is required to be treated as "long term".

VII. REVENUE RECOGNITION:

Revenue is recognized when it is earned, and no significant uncertainty exists as to its realization or collection.

Sale of Goods

Revenue from sale of goods is recognized on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained by the company. Revenue from sale of goods is recognized net of rebates and discounts.

Expenses are accounted for on accrual basis and provision is made for all expenses.

Sale of Services

Revenues from services priced on a time and material basis are recognised when services are rendered and related costs are incurred.

Interest income on deposits are recognized on time proportionate basis.

Dividends from investment in shares are recognised when a right to receive payment is established.

VIII. INVESTMENTS:

Investments intended to be held for not more than one year are classified as current investments. All other investments are classified as non-current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non-Current investments are carried at cost. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the Non-Current investments.

IX. EARNINGS PER SHARE:

The earnings considered in ascertaining the Company''s Earnings Per Share comprise net profit after tax. The number of shares (nominal value of '' 10/-) used in computing Basic Earnings Per Share is weighted average number of shares outstanding during the year.

X. ACCOUNTING FOR TAXES ON INCOME:

a. Current Tax is determined as amount of tax payable in respect of taxable income for the year based on applicable tax rates and law.

b. Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized.

XI. BORROWING COSTS:

Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction/ development of the qualifying asset up to the date of capitalisation of such asset is added to the cost of the assets.

XII. IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each balance sheet date to ascertain impairment based on internal / external factors. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of the net selling price of the assets or their value in use. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

XIII. CASH AND CASH EQUIVALENTS:

Cash and cash equivalents comprise of cash at bank, cash in hand and bank deposits having maturity of 3 months or less.

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Mar 31, 2023

Note 1:    Corporate Information

The Company was incorporated on 21st day of December, 2021 vide Registration No. U27100WB2021PLC250447 with the office of Registrar of Companies, West Bengal, Kolkata. The company having corporate and registered office at Kolkata. The Company is engaged in manufacturing of Railway Components , Sheet Piles and Structures from its Cold Rolled Forming (CRF) Unit located at Singur , Dist :Hooghly , West Bengal.

The financial statements for the year ended 31st March 2023 were approved by the Board of Directors and authorized for issue on 17th April, 2023.

Note 2:    Significant Accounting PoliciesI.    BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory Accounting Standards as prescribed under section 133 of the Companies Act 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified). Accounting Policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the economic policy hitherto in use.

II.    USE OF ESTIMATES :

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known and materialized.

III.    PROPERTY, PLANT & EQUIPMENT:

Property, Plant & Equipments are stated at historical cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

The residual values, useful lives and methods of depreciation of tangible assets are reviewed each year and adjusted prospectively, if appropriate. Depreciation is charged based on a review by the management during the year and at the rates derived based on the useful lives of the assets as specified in Schedule II of the Companies Act, 2013 on Straight Line Method. All fixed assets costing individually up to Rs. 5,000/- are fully depreciated by the Company in the year of its capitalization.

IV.    INTANGIBLE ASSETS:

Intangible Assets are stated at cost of acquisition, comprising of purchase price exclusive of taxes and duties (net of credit availed) and net of accumulated depreciation and accumulated impairment losses, if any. Accordingly, cost of computer software is amortized over the useful life using written down method over the period of 5 years.

V.    VALUATION OF INVENTORIES:

Inventories are valued at Cost or Net Realisable Value whichever is lower.

a)    In case of Raw Material, Stores and spares, consumables, the cost includes transportation, duties and taxes (net of GST wherever applicable) and is arrived on FIFO basis.

b)    Cost of Finished Goods and Work In Process (WIP ) include the cost of raw material, cost of conversion and other manufacturing costs incurred in bringing the inventories to their present location and condition.

c)    Scrap arising in course of production are valued at Net realizable value based on best available estimates available to the management.

VI.    EMPLOYEE BENEFITS:

(i)    Short Term

Short term employee benefits are recognized as an expense at the undiscounted amount expected to be paid over the period of services rendered by the employees to the company.

(ii)    Retirement & other employee benefits

Contribution to Provident Fund, Employee State Insurance and other funds are determined under the relevant statute and charged to revenue account.

No provision for gratuity has been made as none of the employees have completed the stipulated period of service.

Earned leaves are carried forward to future periods are "short term" benefit only if the employees are entitled to either encash or utilize the benefits during the period of twelve months following the end of the accounting period (when they became entitled to the leave). In other cases the benefit is required to be treated as "long term".

VII.    REVENUE RECOGNITION:

Revenue is recognized when it is earned, and no significant uncertainty exists as to its realization or collection. Sale of Goods

Revenue from sale of goods is recognized on delivery of the products, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained by the company. Revenue from sale of goods is recognized net of rebates and discounts.

Expenses are accounted for on accrual basis and provision is made for all expenses.

Sale of Services

Revenues from services priced on a time and material basis are recognised when services are rendered and related costs are incurred.

Interest income on deposits are recognized on time proportionate basis.

Dividends from investment in shares are recognised when a right to receive payment is established.

VIII.    INVESTMENTS:

Investments intended to be held for not more than one year are classified as current investments. All other investments are classified as non-current investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non-Current investments are carried at cost. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the Non-Current investments.

IX.    EARNINGS PER SHARE:

The earnings considered in ascertaining the Company's Earnings Per Share comprise net profit after tax. The number of shares (nominal value of Rs.10/-) used in computing Basic Earnings Per Share is weighted average number of shares outstanding during the year.

X.    ACCOUNTING FOR TAXES ON INCOME:

a.    Current Tax is determined as amount of tax payable in respect of taxable income for the year based on applicable tax rates and law.

b.    Deferred Tax is recognized, subject to the consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized.

XI.    BORROWING COSTS:

Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction/ development of the qualifying asset up to the date of capitalisation of such asset is added to the cost of the assets.

XII.    IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each balance sheet date to ascertain impairment based on internal / external factors. An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of the net selling price of the assets or their value in use. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

XIII.    CASH AND CASH EQUIVALENTS:

Cash and cash equivalents comprise of cash at bank, cash in hand and bank deposits having maturity of 3 months or less.

XIV.    PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

Provisions are recognised only when the Company has present, legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation.

Contingent liability is disclosed for

(i)    possible obligations which will be confirmed only by future events not wholly within the control of the Company, or

(ii)    present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

XV.    CURRENT/ NON CURRENT CLASSIFICATION OF ASSETS/ LIABILITIES:

The Company has classified all its assets / liabilities into current / non-current portion based on the time frame of 12 months from the date of financial statements. Accordingly, assets/ liabilities expected to be realised/ settled within 12 months from the date of financial statements are classified as current and other assets/ liabilities are classified as non-current.

XVI.    ROUNDING OFF AMOUNTS:

All amounts disclosed in financial statements and notes have been rounded off to the nearest rupees in Lakh as per requirement of Schedule III of the Act, unless otherwise stated.