(1) AS 1: Disclosure of accounting policies
These financial statements have been prepared to comply with the Generally Accepted
Accounting Principles in India (Indian GAAP), including the Accounting Standards notified
under the relevant provisions of the Companies Act, 2013.
The financial statements are prepared on accrual basis under the historical cost convention.
(2) AS 2: Valuation of inventories
Raw Material, Spares parts & Consumables and Goods in Transit are valued at Cost.
Work-in-Progress/Semi-Finished Goods at cost, net realizable value, whichever is less.
Finished goods are valued at cost or net realizable value whichever is less.
Scraps are valued at net realizable value.
FIFO method is used for determining cost of raw materials, packing materials, stock-in-trade,
stores, components, spares and consumables. Cost of inventory comprises all costs of purchase,
duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs
incurred in bringing the inventory to their present location and condition.
(3) AS 3: Cash flow statements
Indirect Method is used for preparing the Cash Flow Statement as prescribed in Accounting
Standard (AS)-3.
(4) AS 4: Contingencies and Events occurring after the Balance Sheet date
There are no significant events occurring after the Balance Sheet date that materially affect the
financial statements for the current year.
(5) AS 5: Net profit or loss for the period, prior period items and changes in accounting policies
All items of income and expense in the period are included in the determination of net profit for
the period, unless specifically mentioned elsewhere in the financial statements or is required by an
Accounting Standard.
Exceptional item is the transactions which due to their size or incidence are provided separately
disclosed in statement of Profit & Loss.
(6) AS 7: Accounting for Construction Contracts
The above standard is not applicable to the Company as it is not engaged in the business of
construction.
(7) AS 9: Revenue recognition
Income of the company is derived from sale of products and is net of sales returns, trade and cash
discounts.
Revenue from sale of goods is recognized on transfer of all significant risks and rewards of
ownership to the buyer, it can be reliably measured and it is reasonable to expect ultimate
collection.
Domestic Sales are recognized on the basis of invoices raised and exclude sales return and
adjustment for discount if any,
Export Sales are recognized on the basis of invoices raised and adjustment for discount if any,
Interest incomes are recognised using the time proportion method based on the rates implicit in
the transaction.
(8) AS 10: Property, Plant and Equipment and Intangible Assets
Property, Plant and Equipment
Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment ,
if any. The cost of an item of Property Plant & Equipment comprises its purchase price including
import duties, non- refundable purchase taxes after deducting trade discounts & rebates,
borrowing cost and any cost directly attributable to bringing the asset to its working condition for
its intended use, net change on foreign exchange contracts and adjustments arising from exchange
rate variations attributable to the assets. Those items PPE which are retired from active use and
held for disposal are stated at the lower of their carrying amount and net realizable value. Any
written off in this regard is made through statement of profit and loss.
Subsequent expenditures related to an item of PPE are added to its book value only if they
increase the future benefits from the existing asset beyond its previously assessed standard of
performance.
Property, Plant and Equipment is derecognized:
A. On Disposal or
B. When no future economic benefits are expected from its use or disposal.
Any gain/loss on de-recognition is included in statement of profit and loss.
Depreciation is being charged on W.D.V method using the useful life given in Schedule II of the
Companies Act, 2013, Except in respect of intangible assets ( Computer Software) which are
amortized as per AS-26. The Company reviews useful life of assets at each balance sheet date.
There is no significant variance in the useful life between the components of assets (whose cost is
significant in relation to total cost of respective assets) and the useful life of respective assets.
Hence, the depreciation has been computed for the whole of assets.
Capital Work - in-progress:
Projects under which assets are not ready for their intended use and other capital work-in¬
progress are carried at cost, comprising direct cost, related incidental expenses and attributable
interest.
(9) AS 11: Accounting for the effects of changes in foreign exchange rates
Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on
the date of the transaction or that approximates the actual rate at the date of the transaction.
Monetary items denominated in foreign currencies at the year end are restated at year end rates.
In case of items which are covered by forward exchange contracts, the difference between the year
end rate and rate on the date of the contract is recognized as exchange difference and the premium
paid on forward contracts is recognized over the life of the contract.
Non-monetary foreign currency items are carried at cost.
Any income or expense on account of exchange difference either on settlement or on translation is
recognized in the Statement of Profit and Loss, except in case of long term liabilities, where they
relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such
assets.
(10) AS 12: Accounting for Government grants
Government grants are assistance by government in cash or kind to an enterprises for past or
future compliance with certain conditions. Company directly adjusts grants received from
Government from the carrying amount of the assets concerned and are not deferred. If the whole,
or virtually the whole, of the cost of the asset is a adjusted through subsidy, the asset is shown in
the balance sheet at a nominal value.
(11) AS 13: Accounting for Investments
The Company has not held any investment.
(12) AS 14: Accounting for amalgamations
This standard is not applicable as there was no amalgamation during the year.
(13) AS 15: Accounting for Employee Benefits
Short term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognized as an expense during the period when the
employees render the services. These benefits include performance incentive and compensated
absences.
Post-employment benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays
specified contributions to a separate entity The Company makes specified monthly contributions
towards Provident Fund and Pension Scheme. The Company's contribution is recognized as an
expense in the Statement of Profit and Loss during the period in which the employee renders the
related service.
Defined benefit plans
Provision for gratuity has been made as per Gratuity Act.
The company has an optional scheme of either en-cashing the leave at credit at the time of
retirement or availing the leave at credit before retirement. The provision of outstanding earned
leave has been provided.
Post employment and other long term employee benefits are being recognized as an expense in
the profit and loss account on the basis of provision made.
(14) AS 16: Borrowing costs
Interest on borrowings to finance fixed assets are capitalised only if the borrowing costs are
attributable to the acquisition of fixed assets that take a substantial period of time to get ready for
its intended use. Expenditure incurred on alteration / temporary constructions is charged off as
expenditure under appropriate heads of expenditure in Statement of Profit and Loss in the year in
which it is incurred. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
There is no borrowing cost capitalised during the year.
(15) AS 17: Segment reporting
The Company operates in the same segment which is subject to similar risks and returns.
(16) AS 18: Related party disclosures
Disclosures of transactions with the related parties as defined in the Accounting Standard are
given in Note no. 26 of the notes to accounts
(17) AS 19: Accounting for Leases
The Company has recognized the leased payments under operating lease as an expense in the
statement of Profit and Loss on a straight-line basis over the lease term.
The company has not entered into any financial lease.
(18) AS 20: Earnings per share
Basic earnings per share are disclosed in the Profit and loss Account. Basic earnings per shares is
computed and disclosed using the weighted average number of common shares outstanding
during the year. Diluted earnings per share is computed and disclosed using the weighted
average number of common and dilutive common equivalent shares outstanding during the year,
except when the results would be anti-dilutive.
(19) AS 21: Consolidated financial statements
The above standard is not applicable to the company as it does not have any subsidiary company.
(20) AS 22: Accounting for taxes on income
Tax expense comprises of current and deferred. Current income tax is measured as the amount
expected to be paid to the tax authorities in accordance with the Indian Income tax Act, 1961.
Deferred income taxes reflect the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing differences of earlier years.
The company reviews carrying amount of deferred tax assets at each balance sheet date. The
company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer
reasonably certain or virtually certain, as the case may be, that sufficient future taxable income
will be available against which deferred tax asset can be realised. Any such write-down is
reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
(21) AS 23: Accounting for Investments in associates in Consolidated Financial Statements
The above standard is not applicable to the Company.
(22) AS 24: Discontinuing Operations
The Company has not discontinued any operations during the year.
(23) AS 25: Interim Financial Reporting
The above standard is not applicable to the Company.
(24) AS 26: Intangible Assets
An Intangible asset is an identifiable non - monetary asset, without physical substance, held for
use in the production or supply of goods for rental to others or for administrative purpose.
Intangible asset is recognized in books if
A. Definition of an intangible asset is satisfied.
B. It is probable that the future economic benefits attributable to asset will flow to the
enterprises and
C. The cost of the asset can be measured reliably.
Intangible assets are carried at cost less accumulated depreciation and impairment losses if
any cost includes purchase price, import duties and other taxes (other than non¬
refundable) and expenditure directly attributable to the asset. Trade discount and rebates
are deducted from the cost.
Intangible assets are amortized over the useful life of the assets.
(25) AS 27: Financial Reporting of Interests in Joint Ventures
The above standard is not applicable to the Company.
(26) AS 28: Impairment of Assets
At the Balance Sheet date, an assessment is done to determine whether there is any indication of
impairment in the carrying amount of the Company's fixed assets. If any such indication exists,
the asset's recoverable amount is estimated. An impairment loss is recognised whenever the
carrying amount of an asset exceeds its recoverable amount. The impairment loss recognized in
prior accounting period is reversed if there has been a change in the estimate of recoverable
amount.
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