1. SIGNIFICANT ACCOUNTING POLICIES
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(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
o to be made under statutes/rules.
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e a (ii) Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation
(jj on projected unit credit method made at the end of the each financial year. Actuarial gains /
"5 ^ 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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