1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS (AS-1)
These financial statements have been prepared to comply with Accounting Principles Generally accepted in India
(Indian GAAP), the Accounting Standards referred to in Section 133 of the Companies Act, 2013 read with rule
7 of Company (Accounts) Rules, 2014 to the extent applicable.
The financial statements are prepared on accrual basis under the historical cost convention. Accounting Policies
have been consistently applied by the company and are consistent with those used in the previous year. The
financial statements are presented in Indian rupees.
2 USE OF ESTIMATES
The preparation of financial statements in conformity with Indian GAAP requires judgements, 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 recognised in the period in which the
results are known/materialised.
3 REVENUE RECOGNITION (AS-9)
Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership
to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude Goods and
Service Tax.
4 PROPERTY, PLANT AND EQUIPMENT (AS-10)
Tangible Fixed assets (Except Land) are stated at cost of acquisition less accumulated depreciation and any
accumulated impairment losses. Cost comprises of the purchase price, net changes on foreign exchange
contracts, adjustments arising from exchange rate variations attributable and attributable cost of bringing the
asset to working condition for its intended use.
ACCOUNTING FOR
5 GOVERNMENT GRANTS
Government grants are recognised when there is a reasonable assurance as to its receipt and that the conditions
attached thereto shall be complied with. Government grants related to capital investments are reduced from the
gross value of fixed assets and such grants relating to expenses are reduced from the related expense head.
6 DEPRECIATION
Depreciation on fixed assets is provided to the extent of depreciable amount on the Straightline Method (SLM)
on the basis of useful life of the fixed assets. The company has adopted useful life of the Fixed Assets as
prescribed in Schedule II of the Companies Act, 2013.
INVENTORIES VALUATION (AS-
7 2)
Cost of inventory comprise cost of purhcase and includes all charges in bringing the goods to the point of sale,
including octroi and other levies, transit insurance and receiving charges.
Raw Material is valued at cost or Net Realizable Value whichever is less. The cost is determined mostly on FIFO
basis.
WIP valued at cost of production, depending upon its level of completion.
Finished Goods valued at Cost of Production or Net Realizable Value whichever is less.
8 EMPLOYEE BENEFITS(AS-15)
Retirement benefits in the form of Provident Fund, which are defined contribution plans, are accounted for on
accrual basis and charged to the Statement of Profit & Loss of the year.
The benefit in the form of Leave Encashment is a non accumulating short term compensated absences. It is
accounted in the year when absences occur and charged to Statement of Profit & Loss of the year.
Retirement benefits in the form of Gratuity is accounted for in the accounts on the basis of estimate by the
management and not on acturial valuation.
BORROWING
9 COSTS (AS-16)
Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as part of the cost of
such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended
use. All other borrowing costs are charged to revenue.
10 ACCOUNTING FOR TAXES ON INCOME (AS-22)
Company has followed accounting standard AS 22 for determination of tax expense in the accounts. Tax
provision for current tax is made for income tax, based on the tax liability computed, after considering tax
allowances and exemptions.
Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or
substantively enacted by the Balance Sheet date.
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