Note 1 Significant Accounting Policies
1. BASIS OF PRESENTATION
The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards as prescribed under Sec.133 of the Companies Act, 2013 (“the act”) read with Rule 7 of the Companies (Accounts) Rules 2014 and the provisions of the Act (to the extent notified). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to the existing accounting standard requires a change in the accounting policy hitehrto in use.
2. REVENUE RECOGNITION Sale of goods
Revenue is recognised in respect of supplies as and when supplies are completed.
Sales are recognised net of discounts & taxes.
Export Incentives
Revenue in respect of export incentives such as drawback & rebate is recognised on export of goods and when it is probable that the economic benefits will flow to the company
Dividends
Revenue is recognised when the shareholders’ right to receive payment is established Interest
Interest is recognised on accrual basis
3. PROPERTY, PLANT AND EQUIPMENT
(a) Property, Plant and Equipment are stated at cost
(b) Expenditure relating to existing property, plant and equipment is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier
(c) An item of property, plant and equipment is eliminated from financial statements, either on disposal or when retired from active use.
(d) Expenses during construction period are allocated to respective item of property, plant and equipment on completion of construction
4. INVESTMENTS
Long Term investments are valued at cost.
5. INVENTORY VALUATION
(a) Raw materials and stores are valued at weighted average cost after providing for obsolescence
(b) Work-in-Progress relating to manufacturing activity is valued at cost.
(c) Finished Goods are valued at Weighted Average Cost.
6. DEPRECIATION
Depreciation on tangible assets is provided on written down value method over the useful lives of assets which is as stated in Schedule II of the Companies Act, 2013. Depreciation for assets purchased/ sold during a period is proportionately charged
7. BORROWING COST
Borrowing costs that are attributable to the acquisition or construction 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.
8. EARNINGS PER SHARE
The earnings considered in ascertaining the company’s EPS comprises the net profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.
9. FOREIGN CURRENCY CONVERSION
Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.Foreign currency monetary items are reported using the closing rate.
Exchange differences arising on the settlement of monetary items or on reporting company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements are recognised as income or expense in the year in which they arise.
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