2. SIGNIFICANT ACCOUNTING POLICIES
2.01 BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS
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 and the
relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been prepared 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.
Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting
principles in India.
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other
criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve
months for the purpose of current - non-current classification of assets and liabilities.
2.02 USE OF ESTIMATES
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and
assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income
and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are
prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the
estimates are recognised in the periods in which the results are known / materialise.
2.03 PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS
All Property, Plant & Equipment are recorded at cost including taxes, duties, freight and other incidental expenses incurred in
relation to their acquisition and bringing the asset to its intended use.
Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.
2.04 DEPRECIATION / AMORTISATION
Depreciation on fixed assets is calculated on a straight-line method using the rates arrived at based on the useful lives estimated by
the management, or those prescribed under the Schedule II to the Companies Act, 2013. Individual assets cost of which doesn't
exceed Rs. 5,000/- each are depreciated in full in the year of purchase.
Intangible assets including internally developed intangible assets are amortised over the year for which the company expects the
benefits to accrue. Intangible assets are amortized on straight line method basis over 10 years in pursuance of provisions of AS-26.
2.05 INVENTORIES
Inventories comprises of Raw Material, Work-in-Progress and Finished Goods.
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in, first-out
principle.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the
estimated costs necessary to make the sale.
2.06 INVESTMENTS
Current investments are carried at cost or fair-value whichever is lower. Further, any reduction to fair value and any reversals of
such reductions are included in the profit and loss statement.
Profit or loss on sale of investments is determined as the difference between the sale price and carrying value of investment,
determined individually for each investment. Cost of investments sold is arrived using average method.
2.07 IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is the higher of
an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise
from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable
from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal. An
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 recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable
value.
2.08 BORROWING COSTS
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. All other borrowing
costs are charged to revenue.
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