SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Preparation
The Financial statements of the company have been prepared in accordance with generally accepted
accounting principles in India (Indian GAAP) and complied in all material respect with the accounting
standards specified under section 133 of the Companies Act. 2013 read with rule 7 of the Companies
(Accounts) Rules, 2014 has amended and other relevant provision of the Act. The financial statements
have been prepared using historical cost convention and on the basis of going concern using accrual
method of accounting. The Accounting Policies have been consistently applied by the company and are
consistent with those used in the previous year.
2. Use of estimates
The preparation of Financial statement of the company is on conformity with Generally Accepted
Accounting principles in India require management to make estimates that affect the reported amount of
assets and liabilities, disclosures relating to contingent liabilities and assets as at the date of the Financial
Statement and the reported amounts of revenue and expenses, during the reporting period, although
these estimates are based on management's best knowledge of current events and actions, actual
results may ultimately differ from these estimates, which are recognized in the period in which the
results are known/materialized.
3. Revenue Recognition
a. Revenue for the purpose of the accounts has been recognized on accrual basis. Sales of Products and
scrap are recognized when all significant risk and reward of ownership have been passed to the
buyer, usually on delivery to customers. Incomes from Job work are recognized as and when the
services are rendered and the resultant product is returned back to customers.
b. All claims and other income to the extent ascertainable and considered receivable have been
accounted for.
c. Interest income is recognized on the time proportion basis taking into account the amount
outstanding and the applicable interest rate.
d. Dividend income is recognized when the company's right to receive dividend is established.
4. Property, Plant and Equipment and Intangible Assets Property, Plant and Equipment
Property, Plant and Equipment (PPE), being fixed assets are tangible items that are held for use in
production or supply of goods or services, for rental to others, or for administrative purpose and are
expected to be used for more than a period of twelve months. They are measured at cost less
accumulated depreciation and any accumulated impairment. Cost comprises of the purchase
prices including import duties and non-refundable purchase taxes after deducting trade
discounts and rebates and any cost attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by the Management.
Own manufacturing assets are capitalized at cost including an appropriate share of overheads.
Financing cost relating to acquisition of assets which take substantial period of time to get ready for
intended use are also included to the extent they relate to the period up to such assets are ready for
their intended use.
Items such as spare parts, stand-by equipment and servicing equipment are capitalized if they meet
the definition of property, plant and equipment.
When an asset is scraped, or otherwise disposed off, the cost and related depreciation are written
back and resultant Profit (including capital profit) or loss, if any is reflected in Statement of Profit &
Loss.
Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated
amortization.
Pursuant to the requirements under schedule II of the Company Act 2013, the company has identified
the cost of each component of the assets on the basis of its technical expertise and no component had
a cost which is significant to the total cost of the assets and has useful life materially different
from that of the remaining asset.
Capital work in progress
Expenditure incurred during the construction period, including all expenditure direct or indirect
expenses, incidental and related to construction is carried forward and on completion the cost is
allocated to the respective property, plant and equipment.
5. Depreciation & Amortization
Depreciation on all property, plant & equipment and intangible assets is provided on Straight Line
Method in the manner as prescribed by Schedule II of the Companies Act 2013. Depreciation
on additions during the year has been provided on pro-rata basis from the next month of addition.
Intangible assets are amortized over their respective individual estimated useful lives on a straight¬
line basis, commencing from the date the asset is available to the Company for its use.
Lease hold land is amortized on straight line basis over the period of lease.
6. Inventories
Inventories are stated at lower of cost or net realizable value. Cost is ascertained on a weighted
average basis. Costs comprise direct materials and, where applicable, direct labor costs and those
overheads that have been incurred in bringing the inventories to their present location and condition.
Net Realizable value is the price at which the inventories can be realised in the normal course of
business after allowing for the cost of conversion from their existing state to a finished condition and
for the cost of marketing, selling and distribution.
7. Investment
Long Term Investments are stated at cost. Current investments are carried at lower of cost and
quoted/ fair value as on the Balance Sheet date. Provision for diminution in the value of long- term
investments is made only if such a decline is other than temporary.
8. Employees Benefits
a. Contribution to Provident Fund & Employee State Insurance Corporation is made in
accordance with the respective Act and statute.
b. Provision on account of unutilized leave payable to employees is provided in the accounts on
accrual basis.
c. Provision on account of gratuity and bonus is provided in the accounts on accrual basis.
9. Cash Flow Statement
Cash flow statement has been prepared in accordance with the indirect method prescribed in
Accounting Standard - 3 issued by the Institute of Chartered Accountants of India.
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