2. Significant Accounting Policies:
(i) Basis of preparation
These standalone financial statements are prepared in accordance with Schedule
III of the Companies Act. 2013 and under the historical cost basis of
accounting and evaluated on a going concern basis, with revenues and expenses
accounted for on their accrual to comply in all material aspects with the applicable
accounting principles and applicable Accounting Standards notified under section
133 of the Companies Act. 2013 (The Act) read with rule 7 of Companies
(Accounts) Rules. 2014. The accountings policies have been consistently applied
by the Company; and the accounting policies not referred to otherwise, are in
conformity with Indian Generally Accepted Accounting Principles (’Indian GAAP').
The accounting policies adopted In the preparation of financial statements are
consistent with those of previous year.
(ii) Use of Estimates
The preparation of financial statements requires estimates and assumptions to
be made that affect the reported balances of assets as on the date of tho
financial statements and the reported amount of revenues and expenses during
the reporting period. Accounting estimates could change from period to period.
Actual results could differ from those estimates. Appropriate changes in estimates
are made as and when the Management becomes aware of the changes in the
circumstances surrounding the estimates. Changes in estimates are reflected in
the financial statements in the period in which the changes are made and if
material, their effects are disclosed in the notes to the financial statements.
(iii) Rovonuo Recognition:
Revenue is recognized to the extent that it is probable that the economic benefits
will flow to the company and the revenue can be reliably measured.
Sales of Goods.
Sales are recognized when significant risks and rewards of ownership of
goods have been passed to the buyer. Sales and Purchases are being
accounted for excluding GST Collected / Paid on sales and purchases.
Jobwork Incomo/Material Testing Income/Packing & Forwarding Income:
Jobwork Income & Material Testing Income are recognized on accrual basis on
completion of provision of services and Packing & Forwarding Charged in Sales
Invoices is recognized along with Sales.
Interest:
Revenue is recognized on a time proportion basis taking into account the
amount outstanding and the rate applicable
Other Income:
Other Income being excise duty rebate claim, duty drawback, solar power
generation income, etc are being recognized on accrual basis in the year in which
right to receive the same is established
(iv) Properly, Plant & Equipment (PPE):
Gross PPE are stated at cost of acquisition including incidental expenses relating
to acquisition and installation. Fixed Assets are stated at cost net of modvat /
cenvat / other credits and includes amounts added on revaluation, less
accumulated depreciation and impairment loss, if any.
(v) Depreciation / Amortization on tangible fixed assets:
Depreciation on fixed assets is on Written Down Value (WDV) Method at the
rates arrived at on the basis of useful life / remaining useful life and in the
manner as prescribed in. Part C. Schedule II of the Companies Act, 2013.
Details of useful life of an asset and its residual value estimated by the
management: -
(vi) Inventories:
Inventories of Raw Materials, Semi-Finished Goods, Finished Goods and Waste
& Scrap are stated at cost or net realizable value, whichever is lower. Cost
comprises all cost of purchase, cost of conversion and other costs incurred in
bringing the inventories to their present location and condition. Cost formula is
arrived at on 'FIFO basis'. Due allowance is estimated and made for defective
and obsolete items, wherever necessary, based on the past experience of the
Company.
(vii) Employee Benefits
Short Term Employco Benefits:
The undiscounted amount of short-tenm employee benefits expected to be paid in
exchange for the services rendered by employees are recognized as an expense
during the poriod when the employees render the services. These benefits
include performance incentive and compensated absences.
Post-Employment Benefits Defined Contribution Plans:
A defined contribution plan is a post-employment benefit plan under which the
Company pays specified contributions to a separate entity. The Company makes
specified monthly contributions towards Provident Fund. State Government
Schemes. The Company's contribution is recognized as an expense in the Profit
and Loss Statement during the period in which the employee renders the related
service.
(viii) Foreign Currency Transactions:
Transactions denominated in foreign currencies are recorded at the exchange
rate prevailing on the date of transaction.
Foreign currency current assets and current liabilities outstanding at the balance
sheet date are translated at the exchange rate prevailing on that date and the
net gain or loss is recognized in the profit and loss account
Foreign currency translation differences relating to liabilities incurred for
purchasing of fixed assets from foreign countries are recognized in the profit and
loss account. All other foreign currency gain or losses are recognized in the profit
and loss account.
(ix) Borrowing Cost:
Borrowing costs that are directly attributable to the acquisition, construction or
production of qualifying assets are capitalised 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. Costs incurred in raising funds are amortised equally
over the period for which the funds are acquired. All other borrowing costs are
charged to statement of profit and loss.
(x) Income Taxos:
Tax expense comprises of current tax and deferred tax. Current tax is measured
at the amount expected to be paid to the tax authorities in accordance with the
Income-tax Act, 1961 using the applicable tax rates. Deferred income tax reflects
the current period timing differences between taxable income and accounting
income for the period and reversal of timing differences of earlier years/period.
Deferred tax assets are recognized only to the extent that there is a reasonable
certainty that sufficient future income will be available except that deferred tax
assets, in case there are unabsorbed depreciation or losses, are recognized if
there is virtual certainty that sufficient future taxable income will be available to
realize the same
Deferred tax assets and liabilities are measured using the tax rates and tax law
that have been enacted or substantively enacted by the Balance Sheet date
(xi) Earnings / (Loss) per share:
Basic earnings/(loss) per share are calculated by dividing the net profit / (loss) for
the period attributable to equity shareholders (after deducting preference
dividends and attributable taxes, if any) by the weighted average number of
equity shares outstanding during the period. The weighted average number of
equity shares outstanding during the period are adjusted for any bonus shares
issued during the year and also after the balance sheet date but before the
date the financial statements are approved by the board of directors.
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