2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Accounting Conventions:
The company’s financial statements have been prepared on accrual basis of accounting as applicable to
going concern in accordance with generally accepted accounting principle in India, mandatory accounting
standards prescribed in the Section 133 of the Companies Act 2013 Read with Rule 7 of the Companies
(Accounts) Rules 2014.
All assets and liabilities have been classification as current or noncurrent as per company’s normal operating
cycle and other criteria set out in the Revised Schedule II of Companies Act, 2013. Based on the nature of
business, the company has ascertained its operating cycle as 12 months for the purpose of current or
noncurrent classification of Assets and liabilities.
B. RevenueRecognition
1. Sales Revenue is recognized on dispatch of goods, net of freight, insurance, Excise, VAT and GST.
2. Interest income is recognised on time proportion basis.
C. Fixed Assets:
Fixed assets are stated at cost of acquisition and inclusive of inward freight, duties & taxes & incidental
expenses related to acquisition net of capital subsidy relating to specific fixed assets. Capital work in
progress/Intangible assets under development includes cost of assets at site, advances made for acquisition
of capital assets and pre operative expenditure pending allocation to fixed assets.
D. Inventory Valuation
Inventories are valued at cost or net realizable price whichever is lower except scrap at net realisable
value. The cost formula used for valuation of inventories are:-
1. In respect of raw material and stores and spares have been valued at cost.
2. In respect of work in process is valued at cost of raw material plus conversion cost.
3. Finished goods are valued at cost of production.
E. Depreciation:
Depreciation has been provided on provided on Straight Line method at the rates specified in schedule II
of The Companies Act, 2013. The fixed assets acquired prior to 1st April 2014 are depreciated over the
revised remaining useful life of the assets based on the indicative useful life of the assets mandated by
schedule II to the Companies Act, 2013.
F. Taxes on Income
Provision for Tax is made for both current and deferred taxes. Provisions for current income tax is made on
the current tax rates based on assessable income. The Company provides for deferred tax based on the
tax effect of timing differences resulting from the recognition of items in the financial statements and in
estimating its current tax provision.
G. Employee Benefits
I. Contribution to Provident Fund and other funds are made in accordance with the provisions of the
Employees Provident Fund and Miscellaneous Provisions Act, 1952.
II. Provision for leave encashment is made on the basis of leave accrued to the employees during the
financial year.
III. The company has not been made Provision for gratuity.
H. Excise Duty
Excise duty is not applicable on the company.
The company is registered under Goods and Service Act 2017 and having GST No.03AAECP1070G1ZX.
I. Foreign Currency Transaction
Transactions in Foreign Currency are recorded at the rate of exchange prevailing at the date of transactions.
The translation/settlement differences are recognized in the profit & Loss Account. Exchange gain on
export realisation is Rs.2,91,720.34 and exchange loss on export realisation is Rs.73,377.30. Net effect is
Rs. 2,18,343.04 credited to Profit & loss account.
J. Impairment of Assets
As at Balance Sheet date, an assessment is made whether any indication exists that an asset has been
impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of
an asset exceed its recoverable amount is provided in the books of account.
|