NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of preparation of financial statements
(a) The financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian
GAAP) under the historical cost convention on accrual basis and on principles of going concern. The accounting
policies are consistently applied by the Company.
(b) The financial statements are prepared to comply in all material respects with the Accounting Standards specified
under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and provisions of
Companies Act, 2013.
(c) The preparation of the financial statements require estimates and assumptions to be made that affect the
reported amounts of assets and liabilities as on the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Differences between the actual results and estimates are
recognized in the period in which the results are known / materialize.
1.2 Revenue Recognition
(a) The company generally follows the mercantile system of accounting and recognizes Income & Expenditure on
accrual basis.
(b) Revenue is recognised to the extent that it is possible that, the economic benefits will flow to the company and
the revenue can be reliably estimated and collectability is reasonably assured.
(c) Revenue from sale of goods and services are recognised when control of the products being sold is transferred to
our customer and then there are no longer any unfulfilled obligations. The performance obligations in our contracts
are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.
(d) Revenue is measured on the basis of sale price, after deduction of any trade discounts, volume rebates and any
taxes or duties collected on behalf of the Government such as goods and service tax etc. Accumulated experience is
used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is
highly probable a significant reversal will not occur.
(e) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the
rate applicable.
1.3 Property, Plant & Equipment and Intangible Assets & Depreciation
(a) Property, Plant and Equipment is stated at acquisition cost net of accumulated depreciation and accumulated
impairment losses, if any. Cost of acquisition or construction of property, plant and equipment comprises its
purchase price including import duties and non-refundable purchase taxes after deducting trade discounts, rebates
and any directly attributable cost of bringing the item to its working condition for its intended use.
(b) Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the company and the
cost of the item can be measured reliably. All other repairs and maintenance cost are charged to the statement of
profit and loss during the period in which they are incurred.
(c) Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net
disposal proceeds and the carrying value of property, plant and equipment and are recognised in the statement of
profit and loss when the same is derecognised.
(d) Depreciation is calculated on pro rata basis on written down value method (WDV) based on estimated useful
Life as prescribed under Part C of Schedule - II of the Companies Act, 2013. Freehold land is not depreciated.
(e) Intangible asset purchased are initially measured at cost. The cost of an intangible assets comprises its purchase
price including duties and taxes and any costs directly attributable to making the assets ready for their intended use.
The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are
amortised on a straight-line basis over the period of their estimated useful lives.
1.4 Impairment of Assets
' The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment
based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is the higher of the asset's net selling price and value in use,
which is determined by the present value of the estimated future cash flows.
1.5 Investments
Investments shall be classified as long-term investments and shall be stated at cost. Provision shall be made to
recognize any diminution other than temporary in the value of such investments. Current investments shall be
carried at lower of cost and fair value.
1.6 Inventories
Inventories consisting of Raw Materials, W-I-P and Finished Goods are valued at lower of cost and net realizable
value unless otherwise stated. Cost of inventories comprises of material cost on FIFO basis and expenses incurred in
bringing the inventories to their present location and condition.
1.7 Employee Benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provident
fund is charged to the statement of profit and loss for the year when an employee renders the related services.
1.8 Borrowing Costs
(a) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalized for the period
until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of
time to get ready for its intended use.
(b) Other Borrowing costs are recognized as expense in the period in which they are incurred.
1.9 Taxes on Income
Tax expense comprises of current tax and deferred tax.
Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance
with the applicable tax rates and tax laws.
Deferred Tax arising on account of "timing differences" and which are capable of reversal in one or more subsequent
periods is recognized, using the tax rates and tax laws that are enacted or substantively enacted. Deferred tax asset is
recognized only to the extent there is reasonable certainty with respect to reversal of the same in future years as a
matter of prudence
1.10 Earning per share (EPS)
(a) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period.
(b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
1.11 Prior Period Items
Prior Period and Extraordinary items and Changes in Accounting Policies having material impact on the financial
affairs of the Company are disclosed in financial statements if any.
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