Significant Accounting Policies and key accounting estimates
Basis of preparation of financial statements:
1) The financial statements are prepared under the historical cost convention and have been prepared
in accordance with applicable mandatory Indian Accounting Standards (IND-AS) and relevant
presentational requirements of the Companies Act, 2013.
2) The Company follows the mercantile system of accounting and recognizes income and expenditure on
accrual basis. Accounting policies not specifically referred to otherwise are consistent and in consonance
with generally accepted accounting principle in India. Accounting policies have been consistently applied
except when IND-AS were initially adopted.
3) The preparation of financial statements in conformity with generally accepted accounting principle
requires management to make estimates and assumption that affect the reported amount of assets and
liabilities and disclosure of contingent liabilities and commitments at the end of the reporting period and
results of operations during the reporting period. Although these estimates are based upon the
management's best knowledge of current events and actions, actual results could differ from those
estimates. Difference between the actual result and estimates are recognized in the period which the
results are known/materialized.
4) Property Plant and equipment are stated at cost less depreciation. The cost of these includes interest
on specific borrowings obtained for the purpose or acquiring up to the date of commissioning of the
assets and other incidental expenses incurred up to that date.
5) Plant and Machinery includes expenses incurred on erection and commissioning, foundation,
laboratory equipment, air and water pollution devices, electric installation, technical know-how fees,
tools, and miscellaneous fixed assets other than land, building, furniture & fixture, vehicles, office
equipment's computer equipment's and air conditioning equipment's. Technical know-how fee is
inseparable and hence treated as part of plant & machinery. No adjustment is required to be made as
per Indian accounting standard 38 on intangible assets, issued by the Institute of Chartered Accountants
of India.
6) Expenditure related to and incurred during implementation of new/expansion-cum-modernization
projects is included under capital work in progress and the same is allocated to the respective tangible
assets on completion of its construction/erection.
7) Useful lives of property, plant and equipment and intangible assets:
Charge in respect of periodic depreciation of these assets is derived after determining an estimate of
expected useful life and expected residual value at the end of their life. This estimates of useful life and
residual value are determined by the management at the time of acquisition. Depreciation has been
provided on straight-line method as per the rates prescribed in Schedule II to the Companies Act, 2013
and accelerated depreciation is provided, wherever necessary.
8) Employee benefits
Provision for employee benefits charged on accrual basis is determined based on Indian Accounting
standard 19 "Employees Benefits" issued by the Institute of Chartered Accountants of India.
(i) Short-term benefits
All employee benefits payable wholly within twelve months of rendering service are classified as short
term-benefits and are recognized in the period in which employee renders service.
(ii) Post-employrnent benefits
Liability in respect of Leave encashment and gratuity is not ascertained by the management till
date and no provision has been made as per IND AS-19(AS-15).
(iii) Leave salary
Liability towards leave salary is calculated and settled at the time of termination of employment.
(ii) Claims against company not acknowledged as debts : NIL
Export obligation in respect of machineries imported under Zero Duty EPCG Scheme is amounting
to Rs. 1,88,64,384/- as on 31-03-2023
10) Long-term investments are valued at cost. Where investment are reclassified from current to long
term, transfers are made at the lower of cost and fair value at the date of transfer.
11) Inventories of raw materials, stock-in-progress, semi-finished products, stores, packing materials,
spares and loose, finished products are valued at lower of cost or net realizable value. In determining
the cost, first in first out method is used.
12) Prior year expenses/income, if any are adjusted in the respective head of expense/income. This has
no effect on the working result of the Company.
13) Depreciation on Fixed Assets is provided to the extent of depreciable amount on the Straight Line
Method (SLM) on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.
14) The Government grants are recognized only on the assurance that the same will be received. The
Government grants in respect of capital investment have been shown as capital reserve.
15) Taxes are accounted for in accordance with Indian Accounting Standard-12 on Accounting for Taxes
on Income. Income Tax Comprise of both current and deferred Tax.
Current Tax is measured at the amount expected to be paid to/recovered from the revenue authorities,
using applicable tax rates and laws.
The tax effect of the timing difference that results between taxable income and accounting income and
are capable of reversal in one or more subsequent periods are recorded as Deferred Tax Asset or
Deferred Tax Liability. Deferred Tax Assets and Liabilities are recognized for future tax consequences
attributable to timing differences. They are measured using substantively enacted tax rates and tax
regulations.
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