Accounting Policies of Emmbi Industries Ltd. Company

Mar 31, 2018

NOTE: 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 Property, Plant and Equipment (PPE)

i. Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.

ii. The cost of property, plant and equipment includes those incurred directly for the construction or acquisition of the assets, and directly attributable to bringing it to the location and condition necessary for it to be capable of operating in the manner intended by the management.

iii. The cost of major spares is recognised in the carrying amount of the item of property, plant and equipment, in accordance with the recognition criteria set out in the standard. The carrying amount of the replaced part is derecognized at the time of actual replacement. The costs of day-to-day servicing of the item are recognised in statement of profit and loss as incurred.

iv. Depreciation on tangible assets including those on leasehold premises is provided under straight line method over the useful life of assets specified in Part C of Schedule II to the Companies At, 2013 and in the manner specified therein, except in respect of dies and moulds which are depreciated over their technically estimated useful lives on straight line method.

v. Depreciation methods, useful lives and residual values are reviewed at each reporting date and accounted as change in accounting estimate.

vi. Each component / part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately only when it has a different useful life. The gain or loss arising from the de-recognition of an item or property, plant and equipment is included in statement of profit or loss when the item is derecognized.

vii. Expenditure attributable / relating to PPE under construction / erection is accounted as below:

A. To the extent directly identifiable to any specific plant /unit, trial run expenditure net of revenue is included in the cost of property, plant and equipment.

B. To the extent work not completed to any specific plant /unit, is grouped under ‘capital work-in-progress’.

1.2Intangible Assets

i. Intangible asset is recognised when it is probable that future economic benefits are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.

ii. Acquired Brand and Knowledge Development Cost is recognized as intangible asset upon completion of development and commencement of commercial production.

iii. Intangibles asset are amortized on straight line method over their technically estimated useful lives.

iv. Residual values and useful lives for all intangible assets are reviewed at each reporting date. Changes, if any, are accounted for as changes in accounting estimates.

1.3 Assets taken under lease

i. Cost of acquisition of leasehold land is amortized over leasehold period.

1.4 Investments in Subsidiary Company

i. Investment in subsidiary company is measured at fair value through Profit & Loss.

1.6 Revenue recognitions

i. Revenue on sale of goods is recognised when significant risks and rewards of ownership and effective control on goods have been transferred to the buyer. Sales revenue is measured at fair value net of returns, trade discounts and volume rebates, inclusive of excise duty.

ii. Claims against outside agencies are accounted on certainty of realization.

1.7 Employee Benefits

i) Short term benefits:

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits. The cost of the benefits like salaries, wages, medical, leave travel assistance, short term compensated absences, bonus, exgratia, etc. is recognised in the period in which the employee renders the related service.

ii) Post Employment benefits:

A) Defined contribution plans:

The contribution paid/ payable under provident fund scheme, ESI, scheme and employee pension scheme is recognised as expenditure in the period in which the employee renders the related service.

B) Defined benefit plans:

The company’s obligation towards gratuity is a benefit plan. The present value of the estimated future cash flows of the obligation under such plan is determined based on actuarial valuation using the projected unit credit method. Any difference between the interest income on plan assets and the return actually achieved and any changes in the liabilities over the year due to changes in actuarial assumptions or experienced adjustments within the plan are recognised immediately in other comprehensive income and subsequently not reclassified to the statement of profit and loss.

1.8 Foreign currency transactions

i. Transactions relating to non-monetary items and sale of goods/ services denominated in foreign currency are recorded at the exchange rate prevailing or a rate that approximates the actual rate on the date of transactions.

ii. Assets and liabilities in the nature of monetary items denominated in foreign currency are restated at prevailing exchange rate as at the end of the reporting period.

iii. Exchange differences arising on account of settlement/conversion of foreign currency monetary items are recognised as expense or income in the period in which they arise.

1.9 Current Tax and Deferred Tax

i) Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

ii) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profits differ as reported in the statement of profit and loss because of items of income and expense that are taxable or deductible in other years and items that are never taxable or deductible.

The company’s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

iii Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all temporary differences to the extent that it is possible that taxable profits will be available against those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates(and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Minimum Alternate Tax

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

1.10 Borrowing Costs

i. Borrowing costs incurred for obtaining assets which take substantial period to get ready for their intended use are capitalized to the respective assets wherever the costs are directly attributable to such assets and in other case by applying weighted average cost of borrowings to the expenditure on such assets. Post the commercial production or trial run, borrowing cost will be treated as expense for the year.

ii. Other borrowing costs are treated as expense for the year.

1.11 Financial instruments (Financial assets and financial liabilities)

i. All financial instruments are recognised initially at fair value. The classification of financial of financial instruments depends on the objective of the business model for which it is held and the contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. For the purpose of subsequent measurement, financial instruments of the company are classified into (a) Non-Derivative financial instruments and (b) Derivative financial instruments.

ii. Financial instruments.

A) Security deposits, cash and cash equivalents, employee and other advances, trade receivables and eligible current and non-current financial assets are classified as financial assets under this clause.

B) Loans and borrowings, trade and other payables including deposits collected from various parties and eligible current and non-current financial liabilities are classified as financial liabilities under this clause.

C) Financial instruments are subsequently carried at amortized cost wherever applicable using effective interest rate method (EIR) less impairment loss.

D) Transaction cost that are attributable financial recognized at amortized cost are included in the fair value of such instruments.

E) Investments in equity shares, including investment in subsidiary company, are measured at fair value through profit and loss as permitted by Ind AS 27 read with Ind AS 109.

1.12 Impairment

i. Financial Assets

A) The company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure.

- Financial assets that are debt instruments, and are measured at amortized cost wherever applicable for e.g. loans, debt securities, deposits, and bank balance.

- Trade Receivables

B) The company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables which do not contain a significant financing component. The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

ii. Non-financial Assets

The Company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group of non-financial asset is impaired. If any such indication exists, the company estimates the amount of impairment loss.

1.13 Provisions

i. Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefit will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

ii. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risk and uncertainties surrounding the obligation.

iii. When some or all of the economic benefits require to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset, if it is virtually certain that reimbursement will be received and the amount if the receivable can be measured reliably.

1.14 Earnings per share (EPS)

i. Basic EPS is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year/ period.

ii. Diluted EPS is computed by dividing the profit after tax, as adjusted for dividend, interest and other charges to expenses or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic EPS and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

1.15 Accounting Pronouncements

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 115, ‘Revenue from contracts with customers’ and amendments to other Ind AS standards. The amendments are applicable to the Company from April 1, 2018. The Management is in the process of assessing the impact of these amendments/ new standard.

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Mar 31, 2015

1. Basis of 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 Accounting Standards specified under Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the Act 1956") as applicable. Financial Statements have been prepared on accrual basis under Historical Cost Convention. The Accounting Policies adopted in preparation of Financial Statements are consistent with those followed in the previous year.

2. Use of Estimates

The Preparation of Financial Statements in confirmity with India GAAP requires judgements, estimates and assumption to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities if any on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which results are known and materialised.

3. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. The cost is inclusive of interest incidental expenses incurred during construction period and is net of cenvat credit availed and exchange rate difference arising on long term foreign currency monetary items in so far as they relate to the acquisition of depreciable asset. The fixed assets are tested for impairment. There is no impairment loss. Subsequent Expenditure related to tangible fixed asset are added to its book value only if they increase future benfits from the existing asset beyond its previously assessed standard of performance.

4. Depreciation and Amortization

In respect of Fixed Assets (other than Freehold Land) acquired during the year, Depreciation / Amortization is charged on a Straight Line Basis so as to write off the cost of the assets over the useful lives and for the assets acquired prior to 1st April 2014, the carrying amount as on 1st April 2014 is depreciated over remaining useful life based on evaluation.

5. Investments

Non Current investments are valued at cost less provision for dimunition other than temporary dimunition in the carrying value of investment.

6. Valuation of Inventories

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials, Stores and Spares are valued at weighted average cost. Processed stocks and finished goods are valued at material cost plus appropriate value of overheads. Provision for Excise duty on opening and closing inventory of finished goods (domestic stock and wastage) is included under Note No. 10.

7. Revenue Recognition

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made and after all the risks and rewards of ownership is transferred to the customer.

Interest on Investments is recognised on a time proportion basis taking into account amounts invested and the rate of interest applicable Dividend Income on Investments is recognised for when the right to receive the payment is established.

8. Sales

Sales are recognised on dispatch of material to customers. Sales are net of indirect taxes payable.

9. Provisions, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. There are no Contingent Assets.

10. Employee Benefits

a) Gratuity is accounted on the basis of valuation made by the LIC. Company created Trust with LIC for Gratuity. Contribution is paid to LIC Empolyees Group Gratuity Fund.

b) Short Term Employee benefits

The undiscounted amount of Short Term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services.

c) Bonus and Leave Encashment is paid during the year.

11. Foreign Exchange Transactions

a) Transactions in Foreign Currency are accounted at the exchange rate prevailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transactions are recognized in Profit & Loss A/c.

b) All export proceeds not realised at the year end are restated at the rate prescribed in the month of March by Central Board of Excise and Customs. The exchange difference arising there from has been recognised as income / expenses in the Current Year's Profit & Loss A/c.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss statement except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

12. 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 a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

13. Research and Development Expenses

Research and Development Expenses were mainly divided into four main categories viz Raw Material Consumed, Manpower Cost Involved, Energy Cost and various incidental charges. Company is involved in developing special kind of Technical Textile which can be used as a Crop Protection cover from all hailstorms and sudden downpowers. This product has special property that it will allow the sunlight to pass without hurting the crop. Company has to conduct various trials and experiments to develop exact blend to suit and sustain the products in varried indian territory and with varied level of chemical substrate present in atmosphere.

14. Taxes on Income

Tax Expense comprises of Current Tax and Deferred Tax:

a) Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

b) Deferred tax liabilities are recognised for future tax consequences attributable to the "timing differences" between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset is not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

15. Earning Per Share

Basic Earning per share is calculated by dividing the Net Profit for the period attributable to equity hareholders by the weighted average number of equity shares outstanding during the period.

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Mar 31, 2012

1 Basis of preparation of Financial Statements

a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and as per the Accounting Standards referred tc in Section 211 (3C) of the Companies Act,1956.

The Company generally follows mercantile system of accounting and recognises significant items of income and ' expenditure on accrual basis.

2 Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. The cost is inclusive of interest and incidental expenses incurred during construction period and is net of cenvat credit availed. The fixed assets are tested for impairment. There is no impairment loss.

3 Depreciation

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year. No depreciation has been provided on Vat, Excise Duty, Education cess and Higher Education Cess which has been claimed as CENVAT/Vat set off.

4 Investments

Long term investments are valued at cost.

5 Valuation of Inventories

Items of inventories are valued at lower of cost or net realisble value. Cost of Inventories comprise of all cost of purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials, Stores and Spares are valued at weighted average cost.

Processed stocks and finished goods are valued at material cost plus appropriate value of overheads. Provision for Excise duty on opening and closing inventory of finished goods'domestic stock and wastage) is included under Note No. 10

6 Revenue Recognition

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made. Revenue and Expenses are accounted on accrual basis and at historical cost. Dividend income is accounted when right to receive is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

7 Sales

Sales are recognised on dispatch of material to customers. Sales are net of indirect taxes payable. Rebates and discounts are accounted for as and when determined.

8 Expenses

Material known liabilities are provided for on the basis of available information/estimates. Expenses are accounted on accrual basis and at historical cost.

9 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. There are no Contingent Assets.

10 Employee Benefits

a) Provision for Gratuity and leave encashment are accounted on the basis of valuation made by the actuary'. The Company has created a Trust with LIC for Gratuity which is under approval.

b) Short Term Employee benefits The undiscounted amount of Short Term employee benefits expected to be paid in exchange for the services rendered by employees is recognised during the period when the employee renders the services. These benefit includes compensated absences such as paid annual leave and performance Incentives.

11 Foreign Exchange Transactions

a) Transactions in Foreign Currency are accounted at the exchange rate prevailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transactions are recognized in Profit & Loss A/c

b) All export proceeds not realised at the year end are restated at the rate prescribed in the month of March by Central Board of Excise and customs. The exchange difference arising there from has been recognised as income / expenses in the Current Year's Profit & Loss A/c alongwith underlying Transactions.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

12 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 a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

13 Taxes on Income

a) Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

b) Minimum Alternate Tax (MAT) paid in accordance with the Income Tax Act, 1961, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset in the Balance Sheet, when it is probable that the future economic benefits associated with it will flow to the company and the asset can be measured.

c) Deferred tax liabilities are recognised for future tax consequences attributable to the "timing differences" between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset is not recognised unless there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

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Mar 31, 2010

1 Basis of preparation of Financial Statements :-

(a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and as per the Accounting Standards referred to in Section 211 (3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 Fixed Assets :-

Fixed Assets are stated at cost less accumulated depreciation. The cost is inclusive of interest and incidental expenses incurred during construction period and is net of cenvet credit availed. The fixed assets are tested for impairment. There is no impairment loss.

3 Depreciation :-

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year. No depreciation has been provided on Vat, Excise Duty, Education cess and Higher Education Cess which has been claimed as CENVAT

4 Investments :

Long term investments are carried at cost.

5 Valuation of Inventories :-

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials , stores and spares are valued at weighted average cost. Processed stocks and finished goods are valued at mateiral cost plus appropriate value of overheads Excise duty related to finished goods(domestic stock) is included under Schedule 15

6 Revenue Recognition :-

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made. Revenue and Expenses are accounted on an accrual basis and at historical cost. Dividend income is accounted when right to receive is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and the rate applicable.

7 Sales:-

Sales are recognised on despatch of material to customers. Sales are net of trade discount, rebates and indirect taxes payable. Rebates and discounts are accounted for as and when determined.

8 Expenses :-

Material known liabilities are provided for on the basis of available information/estimates. Expenses are accounted on an accrual basis and at historical cost.

B. SIGNIFICANT ACCOUNTING POLICIES :

9 Contingent Liabilities :-

Contingent Liabilities are disclosed by way of Notes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Finalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

10 Employee benefits :

Provision for Gratuity and leave encashment are accounted on the basis of valuation made by the actuary.

11 Foreign Exchange Transactions :

a) Transactions in Foreign Currency are accounted at the exchange rate prevailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transactions are recognized in Profit & Loss A/c

b) All export proceeds not realised at the year end are restated at the rate prevailing at the year end. The exchange difference arising there from has been recognised as income / expenses in the Current Years Profit & Loss A/c alongwith underlying transaction.

c) The premium or discount arising at the inception of forward exchange contract is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contracts is recognised as income or as expense for the year. None of the forward exchange contracts are taken for trading or speculation purpose.

12 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 a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

13 Taxes on Income :-

Tax expense comprises both current and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the Balance Sheet date. Deferred Tax Asset is not recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

14 Earning per Share :

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on "Earnings per share".

15 Excise : Excise duty deducted from turnover represents excise duty collected on sale of goods. Excise duty shown under expenditure represents differene between excise duty on opening and closing stocks of finished goods.

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Mar 31, 2009

1 Basis of preparation of Financial Statements:

(a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and as per the Accounting Standards referred to in Section 211 (3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 Fixed Assets:

Fixed Assets are stated at cost less depreciation. The cost is inclusive of interest and incidental expenses incurred during construction period and is net of cenvet credit availed. The fixed assets are tested for impairment. There is no impairment loss.

3 Depreciation:

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b)of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year.

No depreciation has been provided on Vat, Excise Duty, Education cess and Higher e.c. which has been claimed as MODVAT

4 Investments:

Long term investments are carried at cost.

5 Valuation of Inventories:

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials are valued at weighted average cost.

Manufactured goods and process stock are valued at lower of cost of production and net realisable value whichever is lower.

Excise duty related to finished goods(domestic stock) is included under Schedule 15

6 Revenue Recognition:

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made.

Revenue and Expenses are accounted on an accrual basis and at historical cost.

Dividend income is accounted for when right to receive is established.

7 Sales:

Sales are recognised on despatch of material to customers. Sales are not of trade discount, rebates and indirect taxes payable. Rebates and discounts are accounted for as and when determined.

8 Expenses:

Material known liabilities are provided for on the basis of available information/estimates. Expenses are accounted on an accrual basis and at historical cost

9 Contingent Liabilities:

Contingent Liabilities are disclosed by way of Notes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Finalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

10 Employee benefits:

There is a change in accounting policy with respect of provision for Gratuity and Leave encashement benefits. Provision for Gratuity and leave encashment are accounted on actuarial valuation from current year. Hitherto the company has not provided for Gratuity and Leave encashment benefits till last year. The retirement benefits were debited as and when paid. Due to provision, the profit is decreased to the extent of Rs. 1,683,401.

11 Foreign Exchange Transactions:

(a) Transactions in Foreign Currency are accounted at the exchange rate prevailing on the date of Transactions. Exchange fluctuations between the transaction date and the settlement date in respect of Revenue Transaction are recognized in Profit & Loss A/c.

b) All export proceeds not realised at the year end are restated at the rate prevailing at the year end. The exchange difference arising there from has been recognised as income / expenses in the Current Years Prof it & Loss A/c along with underlying transaction.

c) The premium or discount arising at the inception of forward exchange contract is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellaton or renewal of forward exchange contracts is recognised as income or as expense for the year. None of the forward exchange contracts are taken for trading or speculation purpose.

12 Borrowing Costs:

Borrowing Costs that are attriubutable to the acquisition or construction of qualifing assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

13 Taxes on Income:

Tax expense comprises both current and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, after taking into

consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences

between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the BalanceSheet date. Deferred Tax Asset is not recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

14 Earning per Share:

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on " Earnings per share". Further 5,10,000 shares arealloted on Dt: 31.03.2009

15 Disclosures required by AS 29 "Provisions, Contingent liabilities and contingent Assets."

a) Movement in provisions:

Sr. Particulars of disclosure Provision for Provision for Totals No. Excise duty Others

1 Balance as at 1-4-2008 965,811 77,039 1,042,850

2 Additional provision during the year 402,043 89,870 491,913

3 Provision used during the year 965,811 77,039 1,042,850

4 Provision reversed during the year - - -

5 Balanceasat31-3-2009 402,043 89,870 491,913

b) Nature of Provisions:

i. Provision for Excise duty of Rs. 402,043 on Finished stock at the end of the year.It is expected that the majority of this expenditure will be incurred in the next Financial Year. ii. Other provision includes Provision for Contribution to PF.

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Mar 31, 2008

1 Basis of preparation of Financial Statements :-

(a) The financial statements have been prepared under the historical cost convention in accordance with

the generally accepted accounting principles and as per the Accounting Standards referred to in -Section 211 (3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 Fixed Assets :-

Fixed Assets are stated at cost, net of Modvat. All costs, including financing costs till commencement of commercial production attributable to the fixed assets are capitalised.

3 Depreciation :-

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b) of the Companies Act 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year. No depreciation has been provided on Excise Duty and Education cess which has been claimed as MODVAT.

4 Valuation of Inventories :-

Item? of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials are valued at weighted average cost.

Manufactured goods and process stock are valued at lower of cost of production and net realisable value whichever is lower Excise duty related to finished goods(domestic stock) is included uner Schedule 15

5 Research & Development :-

Revenue expenditure pertaining to Research and Development is charged to revenue under respective heads of accounts in the year in which they are incurred.

6 Revenue Recognition :-

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made.

7 Sales:-

Sales are net of sales tax/value Added Tax. Excise duty recovered is presented as a reduction from gross sales- -

8 Expenses :-

Material known liabilities are provided for on the basis of available information/estimates. Material items of prior period expenses, non-recurring and extraordinary are disclosed separately.

9 Contingent Liabilities :-

Contingent Liabilities are disclosed by way of Notes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Finalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

10 Retirement benefits :

Gratuity to staff and leave salary are accounted as and when paid and no provision is made for further payments of gratuity and leave encashment on actuarial basis.

11 Borrowing Costs :-

Borrowing Costs that are attriubutable to the acquisition or construction of qualifing assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

12 Taxes on Income :-

Tax expense comprises both current and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted or substantively enacted as on the BalanceSheet date. Deferred Tax Asset is npt recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

13 Earning per Share :

The Company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on "Earnings per share".

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Mar 31, 2007

1 Basis of preparation of Financial Statements :-

(a) The financial statements have been prepared under the historical cost convention in accordance with

the generally accepted accounting principles and as per the Accounting Standards referred to in Section 211(3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 Fixed Assets :-

Fixed Assets are stated at cost, net of Modvat. All costs, including financing costs till commencement of commercial production attributable to the fixed assets are capitalised.

3 Depreciation :-

Depreciation on all Tangible assets is provided on Straight Line Method (SLM) as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year. No depreciation has been provided on Excise Duty and Education cess which has been claimed as MODVAT.

4 Valuation of Inventories :-

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials are valued at weighted average cost.

Manufactured goods and process stock are valued at lower of cost of production and net realisable value whichever is lower

5 Research & Development :-

Revenue expenditure pertaining to Research and Development is charged to revenue under respective heads of accounts in the year in which they are incurred.

6 Revenue Recognition :-

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made.

7 Sales:-

Sales are inclusive of excise duty and exclusive of sales tax.

7. Expenses :-

Material known liabilities are provided for on the basis of available information/estimates. Material items of prior period expenses, non-recurring and extraordinary are disclosed separately.

8. Contingent Liabilities :-

Contingent Liabilities are disclosed by way of Notes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Finalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

9. Retirement benefits :

Gratuity to staff and leave salary are accounted as and when paid and no provision is made for further payments of gratuity and leave encashment on actuarial basis since the same is not ascertained.

11 Borrowing Costs :-

Borrowing Costs that are attriubutable to the acquisition or construction of qualifing assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

12 Taxes on Income :-

Tax expense comprises both current and deferred tax.

Current4ax-is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, 1961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax rates and laws that have been enacted Or substantively enacted as on the BalanceSheet date. Deferred Tax Asset is not recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

---

Mar 31, 2006

1 Basis of preparation of Financial Statements :-

(a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and as per the Accounting Standards referred to in Section 21 1 (3C) of the Companies Act.

(b) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

2 fixed Assets :-

Fixed Assets are stated at cost, net of Modvat. All costs, including financing costs till commencement of commercial production attributable to the fixed assets are capitalised.

3 Depreciation :-

Depreciation on all Tangible assets is provided on Straighl Line Method (SLM) as per Section 205(2)(b) of the Companies Act, 1956 at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

Depreciation on assets purchased or acquired during the year is provided on pro rata basis according to the period each asset was put to use during the year.

No depreciation has been provided on Excise Duty and Hducation cess which has been claimed as MODVAT.

4 Valuation of Inventories :-

Items of inventories are valued at lower of cost or net realisble value. Cost of inventories comprise of all cost purchase, cost of conversion and other costs incurred in bringing the inventory to their present location and condition. Raw materials are valued at weighted average cost.

Manufactured goods and process stock are valued at lower of cost of production and net realisable value whichever is lower

5 Research & Development :-

Revenue expenditure pertaining to Research and Development is charged to revenue under respective heads of accounts in the year in which they are incurred.

6 Revenue Recognition :.-

Revenue (Income) is recognised only when it is reasonably certain that the ultimate collection will be made.

7 Sales:-

Sales are inclusive of excise duty and exclusive of sales tax.

8 Lxpcnses :-

Material known liabilities are provided for on the basis of available information/estimates. Material items of prior period expenses, non-recurring and extraordinary are disclosed separately.

9 Contingent Liabilities :-

Contingent, Liabilities are disclosed by way of Motes on Accounts. Provision is made in the accounts for those liabilities which are likely to materialise after the year end till the Penalisation of accounts and having effect on the position stated in the Balance Sheet as at the year end.

10 Gratuity :-

Gratuity to staff is accounted as and when paid and no provision is made for further payments of gratuity on actuarial basis since the same is not ascertained.

11 Borrowing Costs :-

Borrowing Costs that are attriubutable to the acquisition or construction of qualifing assets are capitalised as part of the cost of such assets. A qualifying asset is one thai necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.

12 Taxes on Income :-

Tax expense comprises both current and deferred tax.

Current tax is measured at the amount expected to be paid to the tax authorities, after taking into consideration benefits admissible under the provisions of the Income - Tax Act, l961.

Deferred tax liabilities are recognised for future tax consequences attributable to the timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent periods and are measured using the tax-rates and laws that have been enacted or substantively enacted as on the BalanceSheet date. Deferred Tax Asset is not recognised unless, in the management judgement, there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.