24 SIGNIFICANT ACCOUNTING POLICIES
(I.) Basis of Accounting
1. The financial statements of the company have been prepared in accordance with the 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 notified under section 133 of the Companies Act 2013, read
together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared
on an accrual basis and under the historical cost convention).
2. The Company follows accrual systems of accounting in the preparation of accounts except where otherwise
stated.
(II) Property, Plant and Equipment
The cost of an item of Property, plant and equipment comprises:
i) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade
discounts and rebates.
ii) 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.
iii) the initial estimate of the costs of dismantling, removing the item and restoring the site on which it is
located, referred to as decommissioning, restoration and similar liabilities, the obligation for which an enterprise
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.
Subsequent expenditure related to an item of Property, plant and equipment Under the, an enterprise recognizes in
the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when
that cost is incurred if the recognition principle are met.
The gain or loss arising from the derecognition of an item of property, plant and equipment are included in the
statement of profit and loss when the item is derecognized. Gains are not classified as revenue, as defined in AS 9,
Revenue Recognition.
The gain or loss arising from the derecognition of an item of property, plant and equipment should be determined
as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
(III.) Depreciation
Depreciation on an item of Property, plant and equipment are provided by using WDV method based on the useful
life’s of assets as prescribed under schedule II to the companies act 2013
The depreciable amount of an asset is determined after deducting its residual value.
Depreciation of an asset begins when it is available for use, i.e., when it is in the location and condition necessary
for it to be capable of operating in the manner intended by management. Depreciation of an asset ceases at the
earlier of the date that the asset is retired from active use and is held for disposal and the date that the asset is
derecognized. Therefore, depreciation does not cease when the asset becomes idle or is retired from active use
(but not held for disposal) unless the asset is fully depreciated.
(IV.) Revaluation of Fixed Assets
No Revaluation of Fixed Assets has been done the financial Year.
(V.) Lease Transactions
Lease where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items
are classified as operating lease. Operating lease payments are recognized as an expense in the profit and loss
account or on a basis, which reflect the time pattern of such payment appropriately.
(VI.) Investment
Investments, which are readily realizable and intended to be held for not more than one year from the date on
which such investments are made, are classified as current investments. All other investments are classified as
long-term investments.
(VII.) Inventories
Inventories are valued at lower of cost or net realizable value. Cost of Finished goods is determined by including
direct materials, labor, other expenses and a proportion of overheads based on normal operating capacity. Cost of
finished goods has been determined on FIFO. Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and to make the sale. Cost of raw materials stores and
spares, are determined of FIFO basis. By products are valued at net realizable value.
(VIII.) Revenue Recognition
Revenue is recognized in accordance with Accounting Standard (AS) 9 - Revenue Recognition. Revenue from the
sale of goods is recognized when significant risks and rewards of ownership are transferred to the buyer, there is
no significant uncertainty regarding the amount of consideration and its ultimate collection. Revenue from
services is recognized as and when services are rendered. Interest income is recognized on a time proportion basis,
and dividend income is recognized when the right to receive payment is established. Sales has been Stated Net of
Tax And Duties.
(IX.) Government Grants and subsidies
Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the company
will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.
When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of
profit and loss over the periods necessary to match them with the related costs, which they are intended to
compensate. Where the grant relates to an asset, it is reduced from the cost of the asset.
Where the company receives non-monetary grants, the asset is accounted for on the basis of its acquisition cost. In
case a non-monetary asset is given free of cost, it is recognized at a nominal value.
Government grants of the nature of promoters’ contribution are credited to capital reserve and treated as a part of
the shareholders’ funds
(X.) Foreign Currency Transactions
1. Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time
of the transaction
2. Monetary items denominated in foreign currency at the year end and not covered under forward exchange
contracts are translated at the year-end rates.
3. Any income or expense on account of exchange difference between the date of transaction and on settlement
Date or on translation is recognized in the profit and loss account as income or expense except in cases where they
relate to the acquisition of fixed assets in which case, they are adjusted to the carrying cost of such assets.
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