SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
NOTE 1
Basis of Preparation and Compliance with Ind AS
These financial statements have been prepared in compliance with Indian Accounting Standards (Ind-AS) notified under section 133 of the Companies Act 2013 (the Act), read together with The Companies (Indian Accounting Standards) Rules, 2015].
The financial statements have been prepared and presented under the historical cost convention, on accrual basis of accounting in accordance with accounting principles generally accepted in India (“Indian GAAP”) and comply with the Accounting Standards prescribed under section 133 of the Companies Act, 2013 (“Act”), read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements comply in all material aspects with the accounting standards notified under Section 211 (3C) of the Companies Act, 1956 (Companies Accounting Standards) Rules, 2006, as amended and other relevant provisions of the Companies Act, 2013.
NOTE 2
Significant Accounting Policies
A. Revenue recognition
Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations include sale of goods, other charges, sale of goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods Net Goods and Service Tax ( GST) and other taxes, if any.
Revenue are recorded at invoice value Net Goods and Service Tax of returns and trade discounts. Benefits on account of entitlement of export incentives are recognized as and when the right to receive is established. Interest income is recognized using the time proportionate method, based on rates implicit in the transaction.
B. Fixed Assets
Fixed assets are stated at cost/revalued less accumulated depreciation. Depreciation on Tangible assets has been provided as per the revised useful life of these assets as per Schedule II of the Companies Act, 2013.
C. Investments
Investments that are readily realizable and are intended to be held for more than one year from the date on which such investments are made, are classified as non-current investments. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
D. Inventories
Inventories are values and certified by the management in respect of quality & value. Raw materials are valued at lower of cost or net realizable value. Cost is determined on weighted average basis. Finished goods are valued at cost or market value whichever is lower.
Stores and spares are valued at lower of cost or net realizable value. Cost is determined on weighted average basis.
E. Foreign Currency Transactions
Transactions in foreign currencies entered into by the company are accounted at the exchange rates prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the statement of Profit and Loss.
F. Employee Benefits
Short term employee benefits payable within twelve months of rendering the service are classified as short term employee benefits and they are recognized as an expense in the statement of Profit and Loss account.
Post employment and other long term employee benefits are recognized as an expense in the statement of Profit and Loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable as per the management valuation. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the statement of profit and loss.
G. Deferred tax on income
Deferred tax is recognized for all timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.
H. Impairment of Assets
The Company reviews the carrying value of tangible assets for any possible impairment at each balance sheet date. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. In assessing the recoverable amount, the estimated future cash flows are discounted at their present value based on appropriate discount rates.
I. Borrowing cost
All borrowing cost are charged to the Statement of Profit and Loss.
J. Cash and Cash equivalents
Cash and cash equivalents comprise cash on hand, bank balances, demand deposits with banks and other short term highly liquid investments where the original maturity is three months or less.
K. Trade receivable
Trade receivable are stated after writing off debts considered as bad.
L. Provision and contingencies
The company creates a provision when there exists a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.
M. Earning per share
The basic and diluted earnings per share (“EPS”) is computed by dividing the net profit after tax for the year by weighted average number of equity shares outstanding during the period.
N. Other accounting policies
These are considered with generally accepted accounting principles.
O. Expenditure on Regulatory Approvals
Expenditure incurred for obtaining regulatory approvals and registration of products for overseas markets is charged to the Statement of Profit and Loss.
P. Goods and Service Tax on closing Stock :The Company follows the practice of not providing for Goods and Service Tax on finished goods materials not cleared from the factory premises. Consequently the said practice has no effect on the profit & Loss Account for the year.
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