2.1 Summary of Significant Accounting Policies
I) Use of Estimates:
The preporoUtm of Orumcml imiemmu In conformity wtlh gcnerall) accepted
principle* require* rtiunngrmrni to make judgement*, ind
assumption* ihni affect the reported amount* o: revenue* a'rjeia
mid linbilme* and dtnclonurc of conimKcni UubUitirsut the dute of thr firann :ii
siiitcmrntK and thr (mulls of operations during the reporting (Kirtml end
Although these estimates are based upon imuuiitcmcnt'a best knou ledge of
current events and a etui ns. uncertainly about tlic-w assumption* and
estimates could result in thr outcomes requiring u material u^juatmcni Hi Lite
carrying amounts of aniurt* or liabilities in future perm'd*
it) Properly. Plant and Equipment Depreciation:
Recognition and mefurement
Items of iYoperry Plant and equipment .ire measured .if com which includes
capitalised borrowing cost. less accumulated depreciation ami acrumulutcd
impairment losses, if any. The coat compnncs purchase price. borrowing costs
if capitalization crucrus ore met and directly attributable ctkst of bringing the
asset to its working condition for the in I ended une Any trade distuunu and
rebates arc deducted in arriving at the purchase price,
Subsequent measurement
Subsequent expenditure related to an item a! fixed asset is .-ulded iv t* book
v.iluc only if it increases tile future benefits from (lit* rxnmng unset beyond Its
previously assessed ntandard of performance AD other expense'* on canning
fixed assets, including, day to day rrpuxr and maintenance expenditure and
cost of replacing pans, arc charged to the statement of profit -rod loss far the
period during which such expenses are incurred
The company identifies and determines cos! n! each component part of the
asnr: separately. If the component/ p»irt has a cast which in n.profit:un! to lhr
lofat cost of the unset und luix useful life that is materially different from that
of the remaining asset.
Depreciation
Depreciation is provided on fixed assets ugi d during the prrur.: u-. per Straight
Line Method ( SI.M) on the bmuN of useful life specifier] «n schedule II of the
Companies Act. 2013
The Company has used following uselul life to provide depreciation on its fixed
onsets. •
Dg-rmmUten
Gains or U>n<cA arising from dcfecQjpiitimi of fixed nssieta art nu'aaurvd ax the
difference he Lurch the net disposal practtdftand carrying amount of osset ind
are recognised in the statement of profit and loss when the v»»v:! i*
derecognised.
Intangible Aa,vrt-
IntiinRibU* asset** arc reported at acquisition value with deduction* fur
accumulated umortbumon and any impairment, krone*. tf any
til) Impairment of Assets :
As per an assexsmeni earned out by the manitRCincnt as on the balance sheet
date, there in no indication of any substantial Iona on amount of overall
impairment, in the value of the assets In the opinion of the monaRcmrrtt ihc
assets urc likely to recover tlte value at u hich the*/ me mined in Du account*,
on an overall basis
iv) Inventories :
Inventory of Raw material is valued at lower nf purclue%e rust on L’lFO or
Net roUUmbld value.
inventory of Imported Goods i\ valued at it's landed coat mtludim: mpprt
related expenses incurred thereon
Inventory of Finished Roods is valued at Irmrr of purchase rant of unde-lying
raw material including pro rata overheads incurred thereon und N’rl Ht*:'i:«iblc
value of such raw material.
Inventory of Stores and cunsumnblen is valued i#t purchase owfl thereof on
FIFO hosts
v) Revenue Recognition 2
Revenue is recognised to the extent thni it In probable that flic ecunoma
benefits will flow to the Company and the revenue can tie nntlobly moixural
Revenue from sale of goods, both manufactured and traded is nicugnbani when
nil the significant rtak* and rewards of ownership of tlw gixid* have been
pit stud to the buyufi usually on delivery of the goods. The o-mpnnv collect*
Goods and Service Tux JC1ST) on behalf of thr government und. therefore no
economic benefits flowing to the company <in that account the same are
excluded from revenue.
Revenue by way of income on job wor k is rccogmi'ed upon cufiiplet on ot -.vice
in tiuit respect
Interest income is recognised on accrual basis on u lime proportion ’>a*o»
taking into Account the Amount outstanding and ihr rate applicable f meres 1
income is included under the head 'Other Income-’ in tin* statement of profit
and loss.
vl) Borrowing cost :
Interest and other borrowing costs m connection with rite bwmiwanjp* of the
funds to thr eatents related/attributed to tiic m'quisiuon/construction of
qualifying fixed assets are capitalized up to the date when such assets »vrr
ready for their intended use and uthcr borrowing cted ore charged to profit arid
loss statement. The amount of interest capttahrrd for the period ti» t!ct»*rmini*d
by applying the interest rate applicable to approjiruitc bammfngn an per
AS 16;
vil) Government Grants:
Grants and subsidies from the government are uvognuvd when there ih
reasonable assurance that the company will comply with the conditions
attached to them, and grunt/subsidy will tic reemsid Grant received against
specific Fixed Asnetn ore adjusted to the cost of the Assets mid thin* to the
nature of Promoter's contribution are credited to Capital reserve Revenue
grants are reeugmxcd as income on a systematic basis in the Statement of
Profit and toss in accntdanca with the related scheme ami m the period 111
which theme ore accrued. However, the company has neither rccriwd nor
recognised any government grant during the pcrii:»d under audit
viil) Employee Benefits :
Defined contribution plan
Retirement benefit m the form of provident fund is defined contribution
scheme. The Company * contribution paid/ payable Awing the peridd timurd*
provident fund is reongnixed in the Statement of Profit and U>#*» The Company
has no obligation other than the contribution payable to provident fund
Defined benefit plan
Gratuity liability is defined benefit obligation ami »* provided lor on the basis
of actuarial valuation on projected unit credit method, made «t the end of each
finanrial year. Company's contribution towards gratuity is determined luu»ed
on actuarial valuation. Actuarial gums or losses for defined benefit plan j.n
recognized in full in the Statement of Profit and Loss fit the period in winch
they occur. Provision has been made in Statement ol Profit and l.o»» for surh
liability bused on the valuation and thr same ahull be disbursed during the
normal course of business of the Company., as and when the vastui arise*
Compensated Absence
As per the policy of the compuny, unutilised hams during the ywn b> the
employees gets lapsed in the yenr of accrual itself and nn compensation is
being provided for the lapucd leave*
Ik) Foreign currency transactions:
Transactions m foreign currency are recorded on initial recognition, in the
reporting currency using the exchange rate an on the date of transaction
At each balance sheet elate, foreign currency monetary item* ore reported at
the closing exchange rate. Non monetary items thut are measarrl tn lemi <if
historical coot in foreign currency are not re translated
Transaction gain or loss rtralixrd upon settlement of foreign currency
tnrnmicUung are included in determining profit/ loss lor the period in which
the transaction is settled.
/SJK
Material translation loss on thr assets and liabilities. being monetary Itrrnsi
denominated in foreign currency and outstanding -n the period end, buvd on
the exchange rate prevalent at the period end i» rccwgnuccd ua loss during that
period.
x) Earnings per Share :
The company reports basic und diluted Earnings per Share (El'S) in
accordance with Accounting Standard 20 on Earnings per Slam- Bar.tc KHS iu
computed by dividing thr net profit or loss after lit* for thr period attributable
to equity shareholders by the weighted average number of Equity shares
outstanding during thr period. Diluted Earnings per fthiirv in computed by
dividing the net profit or loss lifter tax for thr prnod (alter adjustment for
diluted comings) attributable to equity shareholders by the weighted average
number uf Equity show* outstanding during the period
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