2. Significant Accounting Policies:
2.1 Basis of preparation of Financial Statements
The financial statements have been prepared under the historical cost convention, on accrual basis in
accordance with Generally Accepted Accounting Principle (GAAP), and comply with the Companies
Accounting Standard specified under section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7
of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. These
financial statements are prepared on an accrual basis and under the historical cost convention except
financial instruments which have been measured at fair value. The accounting policies are consistently
applied by the Company during the year and are consistent with those used in previous year.
2.2 Use of Estimates
The preparation of financial statements requires estimates and assumptions which affect the reporting
amount of assets, liabilities, revenues and expenses of the reporting period. The difference between the
actual results and estimates are recognized in the period in which the results are known or materialized.
2.3 Property, Plant and Equipment
(a) Measurement
(i) Property, plant and equipment
Items of property, plant and equipment are initially recognized at cost and subsequently
carried at cost less accumulated depreciation and accumulated impairment losses.
(ii) Components of costs
The cost of an item of property, plant and equipment initially recognized includes its
purchase price and any cost that is directly attributable to bringing the asset to the location
and condition necessary for it to be capable of operating in the manner intended by
management.
(b) Depreciation and Amortization
(i) Tangible Assets
Depreciation on property, plant and equipment is calculated using the Straight Line
method to allocate their depreciable amounts over their estimated useful lives as
prescribed in Schedule II to the Companies Act, 2013.
The residual values, estimated useful lives and depreciation method of property, plant and
equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The
effects of any revision are recognized in profit or loss when the changes arise.
(c) Subsequent expenditure
Subsequent expenditure relating to property, plant and equipment that has already been
recognized is added to the carrying amount of the asset only when it is probable that future
economic benefits associated with the item will flow to the Company and the cost of the item can
be measured reliably. All other repair and maintenance expenses are recognized in the Statement
of Profit or Loss when incurred.
2.4 Impairment of Assets
Fixed assets are review for impairment whenever events or changes in circumstances indicate that
the carrying amount of asset may not be recoverable. Whenever the carrying amount of the assets
exceeds its recoverable amount, an impairment loss is recognized in the income statement for its
items of fixed assets carried at cost. The recoverable amount is the higher of asset's net selling
price and value in used. The net selling price is the amount obtained from the sale of assets in the
arm's length transaction while value in use is the present value of estimate future cash flows
expected to arise from the continuing use of an assets from its disposal at the end of its useful life.
Recoverable amount are estimated for individual assets or, if not possible, for the cash generating
unit. Impairment loss recognized for an asset in earlier accounting period is reversed to the extent
for tits recoverable amount, if there has been a change in the estimate use to determine the
assets recoverable amount since the last impairment loss was recognized.
2.5 Revenue Recognition
(i) Interest income are accounted for on accrual basis.
(ii) Revenue from sales is recognized at the point of dispatch to the customers when risk and
reward stand transfer to the customers. Sales are booked net of sales return and exclusive of
GST.
(iii) Export incentives and interest income are accounted for on accrual basis.
(iv) Dividend income is recognized when the right to receive the dividend is established.
2.6 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit for the period attributable to equity
shareholders by the weighted average numbers of equity share outstanding during the period.
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