1, Significant Accounting Policies
a. Basis of preparation
The financial statements of the Company have been prepared in accordance with the Generally Accepted
Accounting Principles in India {Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule ? of the Companies (Accounts) Rules, 2014 and the
relevant provisions of the companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements
have been prepared as a going concern on accrual basis under the historical cost convention. The accounting
policies adopted in the preparation of the financial statements are consistent with those followed in the
previous year. f
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b. Use of estimates
in preparing the Company's financial statements in conformity with the accounting principles generally
accepted in India, management is required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. Any revision to accounting estimates is recognised prospectively in the
current and future periods.
c. Property Plant and Equipment:
Property, plant and equipment are tangible items that are held for use in the production or supply of goods
and services, rental to others or for administrative purposes and are expected to be used during more than
one period. The cost of an item of property, plant and equipment is recognised as an asset if and only, if 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, Freehold land is carried at cost less accumulated impairment losses. All
other items of property, plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses. Cost of an item of property, plant and equipment comprises:
* Its purchase price, all costs including financial costs till commencement of commercial production are
capitalized to the cost of qualifying assets. GST/Tax credit, if any, are accounted for by reducing the cost
of capital goods;
« Any other costs 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.
All other repairs and maintenance are charged to profit or loss during the reporting period in which they
are incurred.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no
future economic benefits are expected from its use or disposal. The gain or loss from the derecognition of an
item of property, plant and equipment is recognised in the statement of profit and loss account when the
item is derecognized.
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d- Depreciation on Property, Plant & Equipment:
Depreciation on Property, Plant & Equipment is provided on Written down value method at the rates
derived based on the life specified under Schedule II to the Companies Act, 2013. In respect of Property,
Plant & Equipment purchased during the period, depreciation is provided on a pro-rata basis from the date
on which such asset is ready to be put to use,
Individual assets costing less than Rs. 5,000/- are fully depreciated in the year of capitalization,
e. Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization. All
costs, including financing costs in respect of qualifying assets till commencement of commercial production,
net charges on foreign exchange contracts and adjustments arising from exchange rate variations
attributable to the intangible assets are capitalized.
intangible assets are amortized on a written down value over their estimated useful lives. A rebuttable
presumption that the useful life of an intangible asset will not exceed ten years from the date when the
asset is available for use is considered by the management. The amortization period and the amortization
method are reviewed at least at each reporting date. If the expected useful life of the asset is significantly
different from previous estimates, the amortization period is changed accordingly.
The gain or loss arising on the disposal or retirement of an intangible asset is determined as the difference
between net disposal proceeds and the carrying amount of the asset and is recognized as income or
expenses in the Statement of Profit and Loss in the year or disposal.
f- Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provision of
the Income Tax Act, 1961.
Deferred Tax resulting from ''timing difference" between taxable and accounting income is accounted for
using the tax rates and laws that are enacted or subsequently enacted as on the balance sheet date.
Deferred tax asset is recognised and carried forward only to the extent that there is virtual certainty that the
assets will be realized in future.
g- Revenue Recognition
I. Sales are accounted for on dispatch of goods to the customers and net of sales returns and trade
discounts. Sales Tax. Revenue is recognized when practically all risk and rights connected with
ownership have been transferred to the buyer.
II. Dividend on investment is recognized whers the right to receive the payment is established.
III. Interest Is recognized on time proportion basis relating to the amount outstanding and the rate
applicable.
h. Inventories
Inventories are valued at "Lower of cost and net realizable value". Cost in respect of Raw Materials is
computed on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business
less the estimated cost of completion and estimated cost necessary to make sale.
Costs in respect of Finished Goods are measured using weighted average basis and Cost in respect of other
inventories is computed on FIFO basis.
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i. Borrowing cost:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as
part of the cost such assets, whenever applicable, till the assets are ready for their intended use. A qualifying
asset is one which necessary takes substantial period to get ready for intended use. Ail other borrowing
costs are charged to revenue accounts. Capitalization of borrowing cost is suspended when active
development is interrupted.
j. Accounting for Lease
The company's significant leasing arrangements are in respect of operating lease for premises that are
cancelable in nature. The lease rentals paid under such agreements are charged to the Statement of Profit
and Loss.
k. Impairment
The management periodically assesses, using external and internal sources whether there is an indication
that an asset may be impaired. If an asset is impaired, the company recognizes an impairment loss as the
excess of the carrying amount of the asset over the recoverable amount. The impairment loss recognised in
prior accounting periods is reversed if there has been a change in the estimate of recoverable amounts.
i. Earnings per Share
Basic earnings per share is calculated by dividing net profit after tax for the year attributable to Equity
Shareholders of the company by the weighted average number of Equity Shares issued during the year.
Diluted earnings per share is calculated by dividing net profit attributable to equity Shareholders (after
adjustment for diluted earnings) by average number of weighted equity shares including potentially
convertible shares outstanding during the year.
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