1. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation of Financial Statements
The financial statements of the Company have been
prepared in accordance with the generally accepted
accounting principles in India (Indian GAAP).
The Company has prepared these financial statements
to comply in all material respects with accounting
standards notified under Section 133 of the Companies
Act, 2013. The financial statements have been prepared
on accrual basis under the historical cost convention.
The accounting policies adopted in the preparation
of financial statements are consistent with those
of previous year.
(b) Use of Estimates
The preparation of financial statements in conformity
with Indian GAAP requires judgments, estimates
and assumptions to be made that affect the reported
amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the
reported amount of revenues and expenses during the
reporting period. Difference between the actual results
and estimates are recognized in the period in which the
results are known / materialised.
(c) Property, Plant and Equipment and Depreciation
i. Property, Plant and Equipment are stated at
historical cost less accumulated depreciation
and impairment loss, if any. The cost of Assets
comprises its purchase price, borrowing cost and
any other cost directly attributable to bringing the
assets to its working condition for its intended use.
ii. Depreciation on Fixed Assets has been provided on
the straight-line method as per useful life prescribed
in Schedule II to the Companies Act, 2013.
iii. Lease hold land is not depreciated.
(d) Impairment of Assets
An asset is treated as impaired when the carrying cost
of assets exceeds its recoverable value. An impairment
loss is charged to the Statement of Profit and Loss in the
year in which an asset is identified as impaired.
(e) Investments
Investments intended to be held for more than
one year are classified non-current investments.
Non-current investments are stated at cost.
(f) Inventories
Items of inventories are valued at lower of cost and net
realisable value. Cost of inventories comprises of cost of
purchase, cost of conversion and other costs including
overheads incurred in bringing them to their respective
present location and condition. Cost of raw materials,
chemicals, fuel and packing materials are determined
on first in first out method and cost of process stock
and finished goods are determined at material cost plus
appropriate value of overheads.
(g) Retirement and other Employees Benefits
(i) The Company contributes towards provident
fund and family pension fund which are defined
contribution schemes. Liability in respect thereof
is determined on the basis of contribution required
to be made under statutes/rules.
(ii) Gratuity liability is a defined benefit obligation and
is provided for on the basis of actuarial valuation
on projected unit credit method made at the end
of each financial year. Actuarial gains / losses are
immediately taken to the statement of Profit and
Loss and are not deferred.
(iii) The Company extends benefit of encashment of
leave to its employees while in service as well
as on retirement. The encashment of leave while
in service being at the option of the employee
is accounted as and when claimed and
settled.
(h) Revenue Recognition
(i) Revenue is recognised when the significant risks
and rewards of ownership of the goods have been
passed to the buyers. Sale of goods is exclusive of
goods and service tax and net of returns.
(ii) Interest income is recognised on a time proportion
basis taking into account the amount outstanding
and the interest rate applicable.
(iii) Export benefits are accounted for based on the
eligibility and when there is no uncertainty in
receiving the same.
(i) Borrowing Cost
Interest and other costs in connection with borrowing
of the funds to the extent related/attributed to the
acquisition/construction of qualifying fixed assets are
capitalised up to the date when such assets are ready
for its intended use and other borrowing costs are
charged to Statement of Profit and Loss in the period in
which they are incurred.
(j) Foreign Currency Transactions
Monetary Assets and Liabilities related to foreign
currency transactions remaining unsettled at the
end of the year are translated at year end rates.
The difference in translation of monetary assets and
liabilities and realised gains and losses on foreign
exchange transactions are recognised in the Statement
of Profit and Loss.
(k) Government Grants
Grants in form of capital/investment subsidy and are
treated as Capital Reserve.
(l) Excise Duty
Excise Duty in respect of goods manufactured by
the Company is accounted at the time of removal
of goods.
(m) Provision for Current and Deferred Tax
Provision for Current Tax is made on the basis of
estimated taxable income for current accounting
period and in accordance with the provisions as per
Income Tax Act, 1961.
Deferred Tax resulting from "timing difference” between
book and taxable profit for the year is accounted for
using the tax rates and laws that have been enacted
or substantially enacted as on the balance sheet date.
The deferred tax asset is recognized and carried
forward only to the extent that there is reasonable
certainty that the assets will be adjusted in future.
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