Detailed Notes to Financial Statement is brsented in the table of Disclosure of accounting policies explanatory [Text Block].

NOTES NO.01 : SIGNIFICANT ACCOUNTING POLICIES

a) General:

i) Basis of Accounting:

These financial statements are brpared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as brscribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014. Ac-counting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

ii) Use of Estimates:

The brparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include computation of percentage of completion which requires the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended, provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, post-sales customer support and the use-full lives of fixed tangible assets and intangible assets. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

b) Fixed Assets & Debrciation:

i. Tangible Fixed Assets acquired by the Company are reported at acquisition value, with deductions for accumulated debrciation and impairment losses, if any. The acquisition value includes the purchase price (excluding refundable taxes) and expenses directly attributable to assets to bring it to the factory and in the working condition for its intended use. Where the construction or development of any such asset requiring a substantial period of time to set up for its intended use, is funded by borrowings if any, the corresponding borrowing cost are capitalized up to the date when the asset is ready for its intended use.

ii. Intangible Assets are reported at acquisition value with deductions for accumulated amortization and any impairment losses.

iii. Capital work in progress includes cost of assets at sites, construction expenditure and advances made for acquisition of capital assets.

iv. Debrciation on fixed assets of the company is provided on the written down value over the balance or rebrsentative useful economic lives of the assets as per the provisions of the Companies Act, 2013. The management estimates the balance or rebrsentative useful lives of the fixed assets as on the date:


Factory Building 28 Years
Office Premises 28 Years
Plant and Machineries 15 Years
Computers and Peripherals 2 Years
Electric fittings 15 Years
Furniture and Fixtures 8 Years
Office Equipment 2 Years
Vehicles 2 Years


v. Debrciation on fixed assets added/disposed off during the year, is provided on pro-rata basis with reference to the date of addition/disposal or ready to put to use.

vi. Assets scrapped/discarded from use and held for disposal are stated at lower of book value or their estimated net realizable value.

vii. No debrciation has been provided on the assets which are not under operations.


c) Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. Impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

d) Investments:

Long Term Investments are valued at Cost Price. Provision for the diminution in value of investment is made by the Company to recognize permanent, if any, in the value of each investment.
Investments, which are current, are stated at the lower of the cost and fair value/re-purchase value.

e) Inventories : The inventories are valued on the following basis :

a) Raw Materials : Valued at Cost Price.
b) Finished goods : Valued at lower of Cost or Net Realizable Value.
c) Stock in Process : Valued at Cost Price.
f) Retirement Benefits:

i. Defined Contribution Plan:

The company’s contribution paid/payable for the year to Provident Fund is recognized in the statement of Profit & Loss. The company has no obligation other than the contribution payable to the Government.

ii. The company has defined benefits plan for Gratuity. The liability for which is determined on the basis of actuarial valuation at the end of the year is to be provided in the books of account.

iii. The company has system of providing accumulating compensating absences non-vesting and hence no provision is made in the books of accounts for the leaves.


g) Revenue Recognition:

i. Revenue/income and Cost / Expenditure are generally accounted on accrual basis as they are earned or incurred, except those with significant uncertainties.

ii. Sales are recognized at the point of dispatch of goods to the customers. Sales are net of discounts, sales tax, excise and returns.

iii. Interest income is recognized on time proportion basis.

iv. Dividend on Investments is accounted when approved by the shareholders’ in the annual general meeting.

v. Insurance claim receivable is recognized in the year of the loss to the extent ascertainable.

vi. The CENVAT Credit available on purchase of raw materials / capital items and other eligible inputs are adjusted against Excise Duty payable on clearance of finished goods.

h) Foreign Currency Transaction :

i. Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end rates.

ii. The difference in translation of monetary assets and liabilities and realized gains and losses on foreign transactions are recognized in the Statement of Profit and Loss.

iii. The brmium or discount on forward exchange contracts is recognized in the statement of profit and loss over the period of the contract.

i) Accounting For Government Grants/Refunds:

Government grants/subsidies and refunds due from Government Authorities are accounted when there is reasonable certainty of their realization.

j) Taxes on Income:

Provision for current income tax is made on the basis of taxable income for the current accounting year in accordance with the provisions of Income Tax Act, 1961.Deferred tax assets/Liability is calculated at the current income tax rate and is recognized on timming difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to the consideration of prudence, are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future income will be available against which such deferred tax assets can be realized.

k) Borrowing Cost:

Borrowing Costs relating to the acquisition/construction of qualifying assets are capitalized until the time all substantial activities necessary to brpare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charge to revenue.

l) Earning Per Share:

Basic earning per share is calculated by dividing the net profit after tax for the year attributable to Equity Shareholders of the Company by the weighted average number of Equity Shares outstanding at the end of the year. Diluted earning per Share is calculated by dividing net profit attributable to equity Shareholders (after adjustment for diluted earnings) by average number of weighted equity shares outstanding at the end of the year.

m) Provisions, Contingent Liabilities & Contingent Assets:

The company recognizes as provisions, the liability being brsent obligations arising from past events, the settlement of which is expected to result in outflow of resources and which can be measured only by using a substantial degree of estimation.

Contingent liabilities are disclosed by way of a note to the financial statement after careful evaluation by the management of the facts and legal aspect of the matters involved.

Contingent assets are being neither recognized nor disclosed.

RETIREMENT BENEFIT:

No provision for gratuity has been made in the accounts, as no employee has put in the qualifying period of service under the payment of Gratuity Act, 1972.