Note 2: Significant accounting policies
a) Basis of Accounting:
The financial statements have been prepared and presented under the historic cost convention on accrual basis
to comply in all material respects with the notified Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014. The Accounting Policies have been consistently
applied by the Company and are consistent with those used in the previous year. 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 the Schedule III of the Companies Act, 2013.
b) Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP requires the management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and
liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates
are based on the management's best knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts
of Assets or Liabilities in the Future periods.
c) Property, Plant and Equipments:
Fixed assets are stated at cost less depreciation. All costs (excluding GST and Subsidy), including financing
costs till commencement of commercial production and adjustments arising from exchange rate variations
relating to borrowings attributable to the fixed assets are capitalized.
d) Depreciation:
The Company has provided depreciation for all the assets using Straight Line method as per the provisions
specified in the Schedule II of the Companies Act, 2013.
e) Inventories:
Inventories have been taken as valued and certified by the Management. The basis of valuation is as under:
Raw materials, Stores & Spares - at cost or net realizable value whichever is lower.
Finished goods - at cost or net realizable value on FIFO basis whichever is lower.
f) Retirement benefits:
( i) Company's contribution to provident fund is charged to Profit & Loss Account.
(ii) Provision has been made in accounts for the future payment of gratuity to the employees of the Company,
Pursuant to the payment of Gratuity Act, 1972 however provision has not been made based on the actuarial
valuation.
g) Revenue recognition:
Income from operations is accounted Inclusive of GST on accrual basis.
i) Dividend from investments is recognized when the right to receive the payment is established.
ii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the
applicable interest rate. Interest income is included under the head “other income-" in the statement of profit
and loss.
iii) Revenue accrued, but not due at the end of financial year is recognized on proportionate completion basis in
profit & Loss Account as per AS-7.
h) Investments:
Current Investments are valued at cost or market price whichever is lower and in the absence of market
quotation, cost price is adopted. Long Term I nvestments are valued at cost.
i) R&D Expenditure:
Capital expenditure is included in the fixed assets and depreciation as per Company's policy.
Revenue expenditure is charged to profit & loss account of the year in which they are incurred and included in
the respective heads of expenditure.
j) Borrowing Costs:
Borrowings costs that are directly attributable to the acquisition of qualifying assets are capitalized as part of
cost of such asset. 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.
k) Cash Flow Statement:
The Cash Flow Statement has been compiled with and is based on the Balance Sheet as at 31st March, 2024
and the related Profit and Loss Account for the year ended on that date. The Cash Flow Statement has been
prepared under the indirect method as set out in the Accounting Standard-3 on Cash Flow statement issued by
ICAI.
l) Accounting for Taxes on Income:
Current Tax: Provision for Current Income Tax is made on the basis of the taxable income for the year as
determined in accordance with the provisions of Income Tax Act, 1961.
Deferred Tax: Deferred income tax is recognized, on 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. The tax effect is calculated on the accumulated timing differences at the year end based on
tax rates and laws. Enacted or substantially enacted as of the Balance Sheet date.
m) Impairment of Assets:
The management assesses using external and internal sources whether there is any indication that an asset
may be impaired. Impairment of an asset occurs where the carrying value exceeds the present value of cash
flow expected to arise from the continuing use of the asset and its eventual disposal. The provision for
impairment loss is made when recoverable amount of the asset is lower than the carrying amount.
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