18.1 System of Accounting
The financial statements are prepared under historical cost convention on an accrual basis
and on the basis of going concern.
18.2 Fixed Assets and Depreciation :
18.2.1 Fixed Assets
Fixed Assets are capitalised at cost including all direct costs and other expenses incurred in
connection with acquisition of assets apportioned there to.
18.2.2 Depreciation
Depreciation has been calculated on written down value method on Fixed Assets in
accordance with the rates and in the manner prescribed under Schedule XIV to the Companies
Act, 2013.
18.3 Inventories
Inventories are valued at cost or net realisable value, whichever is less.
18.4 Sales
Sales are net of rebate & discounts and is accounted on removal of the goods.
18.5 Use of Estimates
The preparation of the financial statements in conformity with Indian GAAP requires the
management to make judgment, estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent liabilities on the date of Financial
Statements and reported amounts of revenues and expenses for the year. Although these
estimates are based on Management's best knowledge of current events and actions,
uncertainty about these assumptions and estimates could result in the outcomes different
from the estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to
accounting estimates is recognized prospectively in the current and future periods.
18.6 Current & Non-Current Classification
All the assets and liabilities have been classified as current or non-current as per the
company's normal operating cycle and other criteria set out in Schedule III to the Companies
Act, 2013. Based on the nature of activities and time between the activities performed and
their subsequent realization in cash or cash equivalents, the company has ascertained its
operating cycle as 12 months for the purpose of current/non-current classification of assets
and liabilities.
18.7 Cash Flow Statement
18.7.1 Cash & Cash Equivalents (for purpose of cash flow statement)
Cash comprises cash on hand and demand deposit with banks. Cash Equivalents are short¬
term balances, highly liquid investments that are readily convertible into known amounts of
cash and which are subject to insignificant risk of changes in value.
18.7.2 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary
items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals
or accruals of past or future cash receipts or payments. The cash flows from regular revenue
generating, financing and investing activities of the company are segregated.
18.8 Borrowings and borrowing costs
Borrowing costs consist of interest and transactions costs incurred in connection with the
borrowing of funds. Borrowing costs also include exchange differences to the extent regarded
as an adjustment to the borrowing costs.
Borrowing costs that are attributable to the acquisition or construction of qualifying assets
(i.e., an asset that necessarily takes a substantial period of time to get ready for its intended
use) are capitalized as a part of the cost of such assets. All other borrowing costs are charged
to the statement of profit and loss.
Investment income earned on the temporary investment of funds for specific borrowings
pending their expenditure on qualifying assets is deducted from the borrowing costs eligible
for capitalization
18.9 Related Party transactions
Disclosure of transactions with related parties, as required by Accounting Standard 18
"Related Party Disclosure" as specified in the Companies (Accounting Standard) Rules, (as
amended), has been set out in a separate statement annexed to this note. Related parties as
defined under paragraph 3 of the Accounting Standard 18 have been identified on the basis
of representation made by the management and information available with the company.
18.10 Earnings per Share
The company reports basic and diluted earnings per share (EPS) in accordance with the
Accounting Standard 20 as specified in the Companies (Accounting Standard) Rules, (as
amended). The Basic EPS has been computed by dividing the income available to equity
shareholders by the weighted average number of Equity shares outstanding during the
accounting year. There are no dilutive potential equity shares so Diluted EPS is same as Basis
EPS.
18.11 Accounting policies not specifically referred to are consistent with generally accepted
accounting practices
21.1 The balances of Debtors and Creditors are subject to the confirmation.
21.2 In the opinion of the Board of Directors the current assets, loans & advances are
approximately at the same value if realised in the ordinary course of business, the
provisions of all known liabilities are adequate except stated otherwise.
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