1.1 Basis of preparation of financial statements
The financial statements are prepared under historical cost convention,
on a going concern basis and in accordance with the applicable
accounting standards prescribed in the Companies (Accounting Standards)
Rules, 2006 issued by the Central Government, in consultation with the
National Advisory Committee on Accounting Standards and relevant
provisions of the Companies Act, 1956. Accounting policies have been
consistently applied except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting standard
requires a change in the accounting policy hitherto in use.
1.2 Use of Estimates
The preparation of financial statements requires management to make
certain estimates and assumptions that affect the amounts reported in
the financial statements and notes thereto. Differences between actual
results and estimates are recognized in the period in which they
1.3 Sale/Revenue Recognition
Revenue (income) is recognized where no significant uncertainty as to
determination or realization exists. Sales are recognized ex works and
are including of excise duty but net of trade discounts and sales tax.
Job work income is recognized on delivery of finished goods.
Raw Material, Packing Materials : At Cost*.
Finished Goods : Cost* or Net realizable value, Whichever is lower.
* Cost is determined on the basis of first in first out (FIFO) method.
1.5 Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation and
impairment loss, if any. The cost of assets comprises of purchase price
and directly attributable cost of bringing the assets to working
condition for its intended use including borrowing cost and incidental
expenditure during construction incurred up to the date when the assets
are ready to use and share issue expenses related to funds raised for
financing the project.
1.6 Depreciation/ Amortisation
i) Depreciation on fixed assets is provided on straight line method as
per Schedule-XIV of the Companies Act, 1956.
ii) Depreciation is provided on pro-rata basis from the date on which
assets are put to use in case of addition and provided up to the date of
sale/disposal in case of sale/disposal.
iii) Leasehold improvement assets are amortised over the period of
1.7 Employee Benefits
a) Contribution to the Provident Fund and Employees State Insurance is
deposited in accordance with the provisions of the relevant acts and is
charged to profit and loss account.
b) Provision for gratuity and leave encashment is made on the basis of
actuarial valuation at the end of the year. Actuarial gains or losses
are recognized in the Statement of Profit and Loss.
A provision is made based on a realizable estimate made. It is probable
that an outflow of resources embodying economic benefits will be
realized to settle an obligation. Contingent liabilities, if material,
are disclosed by way of notes to accounts. Contingent assets are not
recognized or disclosed in the financial statements.