| a. ACCOUNTING METHODOLOGY
The accounts have been prepared on historical cost basis of accounting,
on an accrual basis and comply with the Accounting Standards referred
in Section 133 of the Companies Act, 2013, to the extent applicable.
All expenses and income to the extent considered payable and receivable
with reasonable certainty are accounted for on accrual basis.
Accounting policies not specifically referred to are consistent with
generally accepted accounting practices.
b. USE OF ESTIMATES
The presentation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires management to make
estimates and assumptions that affects the reported amounts of assets
and liabilities, and the disclosures of contingent liabilities on the
date of the financial statements. Actual results could differ from
those estimates. Any revision to accounting estimates is recognized
prospectively.
c. REVENUE RECOGNITION
Revenue from sale of goods is recognized when significant risks and
rewards of ownership are transferred to the customers. Sales are net of
sales return and trade discounts.
d. FIXED ASSETS
i. Fixed Assets are carried at cost/book value and include amounts
added on revaluation. Depreciation is provided on revalued cost of
assets (excluding land) on Straight Line Method, at rates prescribed
under Schedule II of the Companies Act, 2013. Cost of leasehold
land/land development is being amortized over the period of the lease.
In respect of additions to fixed assets, depreciation is being
calculated on pro-rata basis from the month of such addition.
ii. Depreciation on Assets is provided as per Straight Line Method.
iii. Financial Leases - Assets under hire purchase are capitalized and
depreciated as per estimated useful life of the asset.
e. IMPAIRMENT OF ASSETS
In accordance with AS 28 on 'Impairment of Assets' issued by the
Institute of Chartered Accountants of India, the carrying amounts of
the Company's assets related to cash generating units are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized in the profit and loss account when the carrying amount of
such assets exceeds its recoverable amount. Impairment, if any, is
recognized in the accounts in the year in which an asset is identified
as impaired.
f. INVENTORIES
Inventories are valued at lower of cost and estimated net realizable
value. Valuation of finished goods represents direct cost and an
appropriate portion of factory overheads which are incurred in bringing
them to their present location and condition and includes excise duty
payable. Weighted Average Method is used for determination of cost.
g. TAXATION
i. Income tax expense comprises current tax and fringe benefit tax
(i.e. amount of tax for the period determined in accordance with the
income tax law) and deferred tax charge or credit (reflecting the tax
effects of timing differences between accounting income and taxable
income for the year).
ii. The deferred tax charge or credit and the corresponding deferred
tax liabilities or assets are recognized using the tax rates that have
been enacted or substantively enacted by the balance sheet date.
iii. Deferred tax is recognized, subject to the consideration of
prudence on timing differences, being the difference between taxable
incomes and accounting incomes that originate in one period and are
capable of reversal in one or more subsequent periods. Deferred tax
asset including asset arising from unabsorbed depreciation and losses
carried forward, is not recognized unless there is virtual certainty
that sufficient future taxable income will be available against which
deferred tax can be realized.
h. EMPLOYEE BENEFITS
i. Gratuity:
Liability under the Payment of Gratuity Act, 1972 is a defined benefit
obligation and is provided for on the basis of the actuarial valuation
made at the end of each financial year.
ii. Provident Fund:
Retirement benefits in the form of Provident Fund / Pension Fund is a
defined contribution scheme and the contributions are charged to the
Profit and Loss Account of the year when the contributions to the
respective funds are due. There are no other obligations other than the
contribution payable to the respective funds.
iii. Leave Entitlement:
Liability towards Leave Entitlement Benefit is provided for as at the
Balance Sheet date as per the actuarial valuation taken at the end of
the year. Actuarial gains/ losses are immediately taken to Profit and
Loss Account and are not deferred.
i. TRANSACTION OF FOREIGN CURRENCY ITEMS
i. Foreign Currency transactions are recorded at the rate of exchange
prevailing on the date of the transaction.
ii. Foreign Currency transactions remaining unsettled as on the last
day of the financial year are translated at the exchange rate
prevailing as on the date of Balance Sheet. The resultant difference,
if any, is dealt with in the Profit and Loss Account. Premium in
respect of forward exchange contracts is recognized over the life of
the contracts.
j. BORROWING COSTS
Borrowing costs attributable to acquisition and construction of
qualifying asset are capitalized as a part of cost upto the date when
such asset is ready for its intended use. A qualifying asset is one
that necessarily takes substantial period of time to get ready for
intended use. All other borrowing costs are charged to the Profit and
Loss Account.
k. PROVISIONS AND CONTINGENT LIABILITIES
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation but the likelihood of outflow of
resources is remote, no provision or disclosure is made.
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