| a) The financial statements have been prepared and presented under the
historical cost convention, on the accrual basis of accounting in
accordance with the accounting principles generally accepted in India
('Indian GAAP') and comply with the Accounting standards prescribed in
the Companies (Accounting Standards) Rules, 2006 which continue to
apply under Section 133 of the Companies Act, 2013, ('the Act') read
with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant
provisions of the Companies Act, 2013, to the extent applicable.
b) The Company generally follows the Mercantile System of accounting
and recognizes significant items of the income and expenditure on
accrual basis except insurance claims and refunds from Government
authorities.
ii) Fixed Assets: Fixed Assets are stated at cost of acquisition
including incidental expenses related to acquisition and installation.
iii) Depreciation:
a) Depreciation on tangible fixed assets is provided using the Straight
Line Method based on the useful life of the assets as estimated by the
management and is charged to the Statement of Profit and Loss as per
the requirement of Schedule II of the Companies Act, 2013. The estimate
of the useful life of the assets has been assessed based on technical
advice which considered the nature of the asset, the usage of the
asset, expected physical wear and tear, the operating conditions of the
asset, anticipated technological changes, manufacturers warranties and
maintenance support, etc.
b) The rates of depreciation being charged are given below
i. Jigs and moulds are charged off over a period of 3 years
ii. Factory Building 3.33%
iii. Plant & Machinery 6.33%
iv. Electrical Installation 9.50%
v. Office Equipment 19.00%
vi. Furniture & Fixtures 9.50%
vii. Computers 31.67%
viii. Vehicles 9.50%
c) Leasehold land is not amortized over the period of lease.
iv) Valuation of Inventories:
i) Raw materials and consumables are valued at lower of cost or
realizable value.
ii) Processed stock is valued at estimated cost.
iii) Finished goods
a) Manufactured Goods: Manufactured finished goods are valued at lower
of absorption cost or Market Value.
b) Trading Goods: Finished goods purchased for re-sale is valued at
cost of purchase.
v) Investments: Investments which are Long Term in nature are stated at
the Cost of acquisition with provision where necessary for diminution,
other than temporary in the value of investments.
vi) Foreign Exchange Transactions:
Transactions in foreign currency are recorded at the exchange rates
prevailing on the date of such transactions.
vii) Retirement benefits:
a) The liability of gratuity to the employees is covered under the
Group Gratuity scheme with the Life Insurance Corporation of India. The
annual premium is debited to Profit and Loss Account.
b) The liability of superannuation benefit to the Chairman & Managing
Director and the Executive Directors is covered under the
Superannuation Scheme with the Life Insurance Corporation of India. The
amount paid is debited to the Profit and Loss Account.
c) The liability of leave encashment of employees is covered with LIC.
The Premium paid is debited to Profit & Loss Account.
viii) Taxes on Income:
a) Current Tax: Provision for Income Tax is determined in accordance
with Provisions of Income Tax Act, 1961.
b) Deferred Tax Provision: Deferred Tax is recognized on timing
difference being difference between taxable incomes and accounting
income that originated in one period and are capable of reversal in one
or more subsequent period(s).
ix) Insurance: Insurance claims are accounted on cash basis.
x) Stores, spares & Consumables:
i) Stores and spares are charged to revenue in the year of purchase.
ii) Consumables are charged to revenue on actual consumption basis.
xi) Research and Development: Research and Development Costs (other
than cost of fixed assets acquired) are charged as expenses in the year
in which they are incurred.
xii) Cenvat Benefit: Cenvat benefit is accounted on duty paid materials
when credit is given in excise records by debit to Excise Duty Deposit
Account. The amount of Cenvat benefit availed is treated as Deposit of
Excise Duty and appropriated against excise duty payment.
xiii) Miscellaneous Expenditure:
Preliminary and Public issue expenses are written off over a period of
ten years and are charged on a pro-rata basis for the period of
operation.
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