Accounting Policies of Panchsheel Organics Ltd. Company

Mar 31, 2018

1 Company Overview

Panchsheel Organics Limned (the ''Company'') is a public limited Company domiciled in India with its registered office address being B6 S 87 Sector C Industrial Estate Sanwer Road Indor. M P 452015 The company is listed on the Bombay Stock Exchange (BSE; The company''s principal business is manufacturing and trading of Bulk Drug and Intermediate

2(A) Summary of significant accounting policies

2.01 Basis of preparation

a) Compliance with Indian Accounting Standards (Ind AS)

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act. 2013 (''the Act'') [Companies (Indian Accounting Standards) Rules 2015] and other relevant provisions of the Act.

The financial statements up to year ended March 31, 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules 2006 (as amended) and other relevant provisions of the Act (previous GAAP)

These financial statements are the first financial statements o( the Company under Ind AS Refer note 43 for an explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position financial performance and cash flows

b) Historical cost convention

The financial statements have been prepared on a host cancel cost basis, except tor following items''

Items Measurement Basis

Certain financial assets and liabilities Fair Value

Net defined benefit (asset)/ liability Fair Value of plan assets less present value of defined benign obligations

- Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that is directly observable or estimated using another valuation technique In determining the fair value of an asset or a liability, the Company lakes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement dale

c) Current versus non-current classification

All the 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 to the Companies Act 2013 Based on the nature of the products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents the company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities-

2.02 Segment reporting

Operating segments are reported in a manner consistent with the Internal reporting provided to the chief operating decision maker (CODM) dairyman and Managing Director of the Company has been identified as CODM who assesses the financial performance and position of the company, and makes strategic decisions

2.03 Foreign Currency Transactions

a) Functional and presentation currency

The financial statements are presented in Indian Rupee? INR) which is the Company''s functional and presentation currency

b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions Foreign exchange gams and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated In foreign currencies are recognised in the Statement to profit and lass

Non-monetary items that are measured at fair value In a foreign currency are translated using the exchange rates at the date when the fair value was determined Non-monetary items that are measured at nistoncal cost in foreign currency are translated using the exchange rate at the date of the transaction

2.04 Revenue Recognition

Revenue is measured at the fair value of consideration received or receivable Amounts disclosed as revenue is exclusive ot excise duty and net of discounts volume rebates value added taxes, goods & services tax and amounts collected on behalf of third parties

a) Sale of goods

Revenue from the sale of goods is recognised when the goods are delivered and titles have passed at which time all the following conditions are satisfied

- the Company has transferred to the buyer the significant asks and rewards of ownership of the goods.

- the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold

- the amount of revenue can be measured reliably:

- it is probable that the economic benefits associated with the transaction will flow lo the Company, and

- the costs incurred or to be incurred in respect of the transaction can be measured reliably

b) Export incentives

Benefits on account of entitlement of export incentives ate recognized as and when the night to receive is established

c) Interest Income

interest income from it is probable that the economic benefits win Mow to the Company and the amount of Income citify measured reliant)i3fil3tesi income is accrued on a time bastes by reference to the amortised cost \ and at the effective

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d) Dividend income

Dividend income is recognized when the right to receive is established

2 05 Borrowing costs

General and specific borrowing costs that are attendance to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use or sale and borrowing costs are being incurred Qualifying assets are assets that incessantly takes a substantial period of time to get ready for its intended use All other borrowing costs are recognised as an expense m the penned in which they are incurred

2.06 Leasing - As a lessee

Leases of property , plant and equipment whey the company as lessee has substantially all the risks and rewards of ownership are classified as finance leases Finance leases are capitalised at the lease s inception at the fair value of the leased property or. if loader the present value of the minimum lease payments The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as apocopate Each lease payment is allocated between the liability and finance cost The finance cost is charged to the statement to profit and loss over the lease paned so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period

Leases in which a significant portion of the asks and rewards of ownership are not transferred to the company as lessee are classified as operating leases Payments made under operating leases (net of any incentives received from the lessor) are charged to statement of profit and loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor ''s expected inflationary cost increases

2.07 Employee benefits

a) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after

- the end of the paned in which the employees render the related service are recognised in respect of employees services up to the end of the reporting period and are measured at the amounts expected to be paid when Itie liabilities are settled The liabilities are presented as current employee benefit obligations in the balance sheet

b) Post employee obligations

The Company operates the following post-employment schemes

- defined benefit plans such as gratuity defined contribution plans such as provident fund

I) Gratuity obligations

The liability or asset recognised In the balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting pined less the fair value of plan assets The defined benefit obligation is determined at the yearend by independent actuary using the projected unit credit method

The present value of the defined benefit obligation de^r "minted in Indian Rupees is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government funds that have terms approximating to the terms of the related obligation

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of loan assess This cost is included in employee benefit expense in the statement of profit and loss Measurement gains and losses anomy from experience adjustments and changes In actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive Income They are included in retained eating’s in the statement of changes In equity Remeasurements are not to profit and loss in the subsequent periods

it) Defined contribution plans

Provident fund

The Company pays contributions toward provident fund to the regulatory authorities as per local regulations where the Company has no further payment obligations The contributions are recognised as employee benefit expense when they are due

c) Bonus plans

The Company recognise a liability and an expense for bonuses The Company recognise a provision where contractually obliged or where there is a past practice that has created a customs active obligation

2.08 Current and deferred tax

Income tax expense or credit represents the sum of the current tax and deferred tax

Current and deferred tax is recognised in the Statement of Profit and Loss except to the extent it relates to items recognised in Other comprehensive income or directly in equity In which case it is recognised in Other comprehensive income or directly in respectively

Current tax , _

Current tax payable is based on taxable profit for the year Taxable profit differs from profit as reported in the Statement of profit V { ,_Y and loss because some items of income or expense are taxable or deductible in different years or may never be 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 pined

Current tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against cutlet tax liabilities and when they relate to Income taxes levied by the same taxation authority The Company periodically evaluates positions taken in the tax returns with respect to situate rarest in which applicable tax regulations are subject to Interpretation and establishes provisions where apocopate It establishes provisions where appropriate op the basis of amounts expected to be (j paid to the tax authorities Deferred tax

Deferred tax is the tax expected to be payable or recoverable in the differences between the carrying amounts of assets and liabilities in the balance sheet and in the computation of taxable profit It is accounted for using the balance sheet liability recognised for all taxable temporary differences and deferred tax assets are recognise extent that .it is taxable profits will available against which deductible temporary differences can tie tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised, based on fay iates1liat have been enacted or substantively enacted by the reporting dale

A deferred tax asset shall be recognised for the carry forward of unused lax losses and unused tax credits lo the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised

Deferred income tax assets and liabilities are off-set against each other and the resultant net amount is presented in the Balance sheet, if and only when (a) the Company currently has a legally enforceable right to set-off the current income tax assets and liabilities, and (be when the Deferred income tax assets and liabilities relate to Income tax levied by the same taxation authority

Deferred income tax is not accounted for it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss)

The carrying -amount of deferred tax assets is reviewed at each reporting date and adjusted to reflect changes in probability that sufficient taxable profits will be available to allow all or part of the asset to be recovered

2.09 Property, plant and equipment

All Hems of property, plant and equipment ("PPE'') are stated at historical cost less accumulated depredation less accumulated impairment losses The cost of property pi3nt and equipment includes purchase price including import duties non-refundable taxes and expenditure that is directly attestable to acquisition and installation, cost of dismantling and removing the item and restoring the site on which it is located

Capital work in progress is carried at cost, less any recognised impairment loss Depreciation of these assets commences when the assets are substantially ready for their intended use Advances giver towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under ‘Other non-current Assets''

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it its probable that future economic benefits associated with the Item will flow to the Company and the cost of the Item can be measured reliably

The carrying amount of any component accounted for as a separate asset is derecognised when replaced All other repairs and maintenance are charged to the stateliest of profit and loss dung the reporting pined in which they are incurred.

An Item of property plant and equipment is derecognised upon disposal or when no future economic benefits are expected to acnes from the continued use of the asset Any gain or loss arising on the disposal or retirement of an item of property plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit and loss

Transition lo Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property plant and equipment recognised as at April 01 2016 measured as per the previous GAAP and use that carrying value as the deemed cos! of the property, plant and equipment

Depreciation methods, estimated useful lives and residual value

Estimated useful lives residual values and depreciation methods are reviewed annually, taking into account commercial and technological obsolescence as well as normal wear and tear and adjusted prospectively. if apocopate

2.10 Impairment of non-financial assets

Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable An impairment loss is recognised for the amount by which the asset s candying amount exceeds its recoverable amount 1 he recoverable amount is the higher of an asset s fair value less costs of disposal and value in use For the purposes of assessing impairment, assets are grouted at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash infix from other assets or group of assets (cash-generating units) Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment al the end of each reporting penod

2.11 Government grants

Government grant is recognized only when there is ,i reasonable assurance that the entity will comply with the conditions attaching to them and the grants will be received Government grant related to assets is recognized as deterred income which is recognized in the statement of profit & loss on systematic oasis over the useful life of the assets

2.12 Inventories

Inventories are stated at the lower of cost and net realisable value Cost of raw materials packing maleness and fuels comprises cost of purchases Cost of work-in progress and finished goods comprises direct materials direct labour, other direct costs and related production overheads Cost of inventions also include all other costs incurred in banging the inventories lo their present location and condition Cost is determined using the first in first out (FIFO) Costs of purchased inventory are determined after deducting rebates and discounts Net realisable value is the estimated selling pence m the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale

However these items are considered to be realizable al cost if the finished products in to be sold at or above cost

2.13 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows cash and cash eauftalents precludes cash on demand deposits with banks short term highly liquid investments with an original maternity or three months or less convertible Into known amounts of cash and which are subject to insignificant risk of chances m value

2.14 Financial Instruments

A financial instrument is any contract that gives nose lo a financial asset of one entity and a financial liability or equity instrument of another entity Financial Assets

I) Classification

The Company classifies its financial assets in the following measurement categories

- those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss).

- those measured at amortised cost the classification depends on the entity s business model (or managing the financial assets and the contractual terms of the cash flows -

For assets measured at fair value gains and losses will either be recorded in statement of profit or loss or other comprehensive income

For investments in debt instruments, this will depend or the business model in which the investment is held

The Company reclassifies debt investments When and only when its business model for managing those assets changes

II) Measurement

At initial recognition the Company measures a financial asset at its fair value plus In the case of a financial asset not at fair value through statement of profit or loss transaction costs that are directly attributable to the acquisition of the financial asset Transaction costs of financial assets carried at fair value through statement of profit or loss are expensed in statement of profit or loss

Deb* instruments

Subsequent measurement of debt instruments depends on the Company''s business model for managing the asset and the cash now charactenstics of the asset There are three measurement categories into which the Company classifies its debt Instruments;

Amortised cost Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of punctual and interest are measured at amortised cost A gain or loss on a debt investment that is subsequently measured at erotised cost is recognised in statement of profit or loss when the asset is oerecogmsec or impaired Interest income from these financial assets is included in finance income using the effective interest rate method

Fair value through other comprehensive income Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest are measured at fair value through other comprehensive income (FVOCI) Movements In the carrying amount are taken through OCI except for the recognition of impairment gains or losses interest revenue and foreign exchange gains and losses which are recognised in profit and loss When the financial asset is derecognised, the cumulative gam or loss previously recognised in OCI is reclassified from equity to statement of profit or loss and recognised in timer income Interest income from these financial assets is included in other income using the effective interest rate method

Fair value through statement of statement profit or loss (FVTPLI Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through statement of profit or loss A gain or loss on a debt investment that is subsequently measured at fair value through statement of profit or issue is recognised in statement of profit or loss in the period In which it anises Interest income from these financial assets Is included in other income

ill) Impairment of financial assets

The Company recognizes toss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through statement of profit or Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL For all other financial assets credit risk is considered to be low

For trade receivables only the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments which requires expected lifetime losses to be recognized from initial recognition of the receivables As a practical expedient, the company uses a provision main lo determine impairment loss of its trade receivables The provision matrix is eased on its historically observed default rates over the expected life of the trade receivable and is hoisted for forward looking estimates The ECL loss allowance (or reversal) dungs the year is recognized in the statement of profit and loss,

Iv) De-recognition of financial assets

A financial asset 15 derecognised only when

- the Company has transferred the rights to receive cash flows from the financial asset

- retains the contractual nights to receive the cash flow:, of the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients

Where the entity has transferred an asset the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset In such cases the financial asset is derecognised Where the entity has not transferred substantially all asks and rewards of ownership of the financial asset the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset the financial asset is derecognised if the Company has not retained control of the financial asset Where the Company retains control of the financial asset the asset s continued to be recognised to the extent of continuing involvement in the financial asset

v) Trade Receivable

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment

Financial Liabilities

i) Classification

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument

An equity instrument Is any contract that evidences are''.-dual interest in the assets of an entity after deducting all of its liabilities

ill) Derecognition:

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires When an existing financial liability is replaced by another from the same lander on substantial ally different terms or the terms of an existing liability are substantially modified such an exchange or modification is treated as the de-recognition of the nominal liability and the recognition of a new liability The difference in the respective carrying amounts is recognised in the statement of profit or loss

iv) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred Borrowings are subsequently measured at amortised cost Any difference between the proceeds net of transaction costs) and the redemption amount is recognised in statement to profit or loss over the penned of the borrowings using the effective interest method

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged cancelled or expired The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid including any non-cash assets transferred or liabilities assumed, is recognised m statement of profit or loss

v) Trade and other payables

Trade and other payables represent liabilities for goods and services provided to me company nor to me end of financial year which are unpaid They ate recognised initially a! their fair value and subsequently measured at amortised cost using The effective interest method Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in me balance sheet where there is a legally enforceable right to offset the recognised amounts and there Is an intention to settle on a net basis 01 realise the asset and settle the liability simultaneously The legally enforceable night must not be contingent on future events and must be enforceable in the normal course of business and In the evenly to default, insolvency or bankruptcy of the company of me counterparty

2.15 Provisions and contingent liabilities Provision

Provisions are recognised when the company has a present legal or constructive obligation as a result to a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a mown of me obligation can be reliably estimated Provisions are not recognised for future operating losses

Provisions are measured at the managements best estimate of the expenditure required to settle the present obligation at The Balance sheet date If the effect of the time value of money is maternal. provisions are determined by discounting the expected future cash flows at a pre-tax rule that reflects current market assessments of me time value of money and the asks specific to the liability Where discounting is used the increase in the provision due to the passage of time is recognised as an metres expense

Contingent liabilities

Contingent liabilities are disclosed when there is a possible obligation an sing from past events the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation mat arses from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made

Contingent Assets

A contingent asset is disclosed where an inflow of economic benefits Is probable

2.16 Contributed equity

Equity shares are classified as equity Incremental costs directly attributable to me issue of new shares or options are shown in equity as a deduction net of tax from me proceeds

2.17 Earnings per share

Baste earnings per share is calculated by dividing the profit or loss attributable to owners of the Company by me weighted average number of equity shares outstanding during the financial year The weighted average number of equity shares outstanding during me period and tor ail pends presented is adjusted for events, such as bonus shares other than The conversion of potential equity shares that nave changed me number of equity shares outstanding without a corresponding change in resources

Diluted earnings per share, adjusts the figures used

2.18 New standards/ amendments to existing standards Issued but not yet adopted ind AS 115 Revenue from Contracts with Customers

The Ministry of Corporate Affairs (MCA) has notified The Companies (Indian Accounting Standards) Amendment Rules, 2018 on March 2B. 2018 notifying Ind AS 115 Revenue from Contracts with Customers

- These amendments are In accordance with the recent amendments made by International Accounting Standards Board (IASB)

lnd AS 115 replaces lnd AS 18 which covers contracts for goods and services and Ind AS 11 which covers construction contracts The new standard is based on the principle that revenue Is recognised when control of a good or service transfers to a customer - so the notion of control replaces the existing notion of risks and rewards

It establishes a five-step model to account for revenue arising from contracts with customer Under Ind AS 115 revenue is recognised at an amount mat reflects the consideration to when an entity expects to be entitled in exchange lion transferring goods or services to a customer The Company is in the process of analysing the impact of the new standard This standard will come into force from accounting period commencing on or after April 01 2018.

There are no other standards, changes in standards and interpretations that are not m force up to reporting period that me _ Company expects to have a material Impact arising from its application in its financial statements

The preparation Of financial statements requires the use of accounting estimates Management also needs to applying me Company s accounting policies This note provides an overview of me areas that involved a higher degree of judgement or complexity and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different man those originally assessed The areas involving critical estimates or judgements are

a) Estimation of Provisions & Contingent Liabilities

The Company exercises judgement in measuring and recognising provisions and the exposures to contingent liabilities which is related to pending litigation or other outstanding claims It a loss arising from these litigations and/or claims is probable and can be reasonably estimated the management record the amount of the estimated loss If a loss as reasonably possible but not probable, the management discloses the nature of the significant contingency and If quantifiable the possible loss that could result from the resolution of the matter As additional information becomes available, the management reassess any potential liability elated to these litigations and dims and may need to revise the estimates Such revisions or ultimate resolution of these matters could materially impact the results of operations cash flows or financial statements of the company (Refer Note 25)

b) Estimation of current tax expense and deferred tax

The calculation of the Company s tax charge necessarily involves a degree of estimation and judgement in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or as appropriate through a formal legal process. The final resolution to some of these items may give rise to material adjustment to taxable profits/losses (Refer note 22)

Recognition of deferred tax assets/ liabilities

The recognition of deferred tax assets/ liabilities is based upon whether it is more likely than not that sufficient taxable profits will be available in the future against which the reversal rift temporary differences will be offset To determine the future taxable profits, the management considers the nature of the deferred tax assets recent operating results, More market growth forecasted earnings and future taxable income in the jurisdictions in which the company operate (Refer Note 8)

c) Useful lives of property, plant and equipment

The Company reviews the estimated useful lives of property, plant and equipment at the end of each reporting penned or even earlier in case, circumstances change such that the recorded value of an asset may not be recoverable The estimate of useful life requires significant management judgment and requires assumptions that can include planned use of equipment’s, future volume trends revenue and expense growth rates and annual operating plans and in addition, external factors such as changes In macroeconomic trends which are developed in connection with the Company''s long-term strategic planning

d) Employee benefit plans

The Company s obligation on account of gratuity and compensated absences is determined based on actual valuations An actuarial valuation involves making various assumptions that may differ from actual development in the future These include the determination of the discount rate future salary increases and mortality rates Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly sensitive to changes in these assumptions All assumptions are reviewed at each reporting date

The parameter most subject to change is The discount rate In determining the appropriate discount late the management considers the interest rules of government bonds m currencies consistent with the currencies of the post-employment benefit obligation

The mortality rate is based on publicly available mortality tables Those mortality tables tend to change only at Interval in H response to dem6graphic changes Future salary increases are based on expected future inflation rates^ Further details about ^ gratuity obligations are given In note 30A

The discount rates reflects the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations

The estimates of future salary increases considered in actuarial valuation, takes into account, inflation seniority, promotions and other relevant factors such as demand and supply in the employment market

The expected rate of return of plan assets is the Company''s expectation of the average Iona term rate of return expected on investments of the fund during the estimated term of the obligations Sensitivity Analysis

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions by 1% is

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant In practice, this is unlikely to occur and changes in some ot the assumptions may be correlated When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied which has been used for calculating the defined benefit liability recognised in the Balance Sheet.

The methods and types of assumptions used in prepanng the sensitivity analysis did not change compared to the prior penod

iv) Risk Exposure

The Gratuity scheme is a final salary Defined Benefit Plan that provides for a lump sum payment made on exit either by way of ^ retirement death, disability or voluntary withdrawal The benefits are defined on the basis of final salary and the period of '' service and paid as lump sum at exit The risks commonly affecting the defined benefit plan are expected to be

Demographic Risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal disability and retirement The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria It is important not to overstate withdrawals , because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a

Salary Inflation Risk : Higher than expected increases in salary will increase the defined benefit obligation

Interest-Rate Risk: The defined benefit obligation calculated uses a discount rate based on government bonds If bond yields . fall the defined benefit obligation will tend to increase

v) Defined Benefit Liability and Employer Contributions

The company considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficit over the agreed penod and that regular contributions, which are based on service costs, will not increase significantly The weighted average duration of the defined benefit obligation is 6 59 years (2017 - 1213 years) The expected matunty analysis of undiscounted gratuity is as follows

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Mar 31, 2015

A. Basis of Preparation of financial statement

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles (GAAP) and provisions of The Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 as adopted consistently by the company, except where a newly issued Accounting Standards initially adopted or a revision in to an existing accounting standard requires a change in the accounting policy hitherto in use.

B. Basis of Accounting:

a. The company follows the mercantile system of accounting.

b. All income and expenditure items having material bearing on financial statement are recognized on accrual basis, except Dividend income and insurance claim, if any.

C. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

D. Fixed Assets

a. All fixed assets are valued at cost of acquisition/ construction. The cost of fixed assets comprises of its purchase price and attributable costs, including finance cost, of bringing the assets to its working condition for its intended use,

b. The expenses incurred during construction period, incidental to the Expansion i New Project are allocated to respective Fixed Assets in the year of commencement of the commercial operation.

E. Depreciation

a. Depreciation on fixed assets is provided on the ''Written down Value Method" at the rates and in the manner prescribed under Schedule XIV of the Companies Act, 1956.

b. Depreciation on Fixed Assets Purchased / Sold during the period is proportionately charged.

F. Investments

Long term investments are stated at cost, less provision for diminution (other than temporary) in value.

G. Valuation of Inventories

Raw materials, packing materials. Work in Process, Finished Goods and Traded Goods are valued at lower of cost or net realizable value after providing for obsolescence, if any. However, these items are considered to be realizable at cost if the finished products, In which they with be used, are expected to be sold at or above cost.

Cost comprises expenditure incurred in normal course of business in bringing such inventories to their present location and condition, Cost of inventories is arrived on FIFO basis.

H. Cash and Cash Equivalents

Cash and Cash equivalent for purpose of cash flow statement comprise cash at bank and in hand and short term investment with an original maturity of 3 months or less.

J. Foreign Exchange Transaction

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets & liabilities and forward contracts are restated at year end exchange rates.

Exchange Gain/Loss is credited / debited as Other Income / Other Expenses in the statement of Profit and Loss under the head "Foreign Exchange Fluctuation Account".

J. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settee the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date.

Contingent Liability are not recognized, but are disclosed in the Notes.

Contingent assets are neither recognized nor disclosed in the financial statements.

K. Revenue Recognition

Revenue is recognized to the extent that is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from safe of goods is recognized when significant risks and rewards of ownership of the goods have been passed to the buyer, which ordinarily coincides with dispatch of goods to customers. Revenues are recorded at invoice value, but net of Sales 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 on time proportion basis.

Dividend income is recognized when the right to receive is established.

Employee Benefits

Liabilities in respect of Retirement Benefits are provided by monthly payment to Pension and Provident Fund under the Employees Provident Funds (and Miscellaneous Provisions), AcT 1952.

The Gratuity payable at the time of retirement are charged to the Statement of Profit and Loss on basis of independent external actuarial valuation determined and basis of Projected Unit Credit method carried out annually. Actuarial gains and losses are immediately recognized in the Statement of Profit and Loss.

Company has not framed policy to pay Leave Encashment to the employees. Benefit in terms of workmen demand pending settlement, medical reimbursement, leave travel concession, are accounted when paid.

M. Income Tax

The amount of Income Tax is provided in accordance with the provisions of Income Tax Act. 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized.

N. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets, A qualifying asset is one that necessarily takes substantial periods of time to get ready for intended use. All other borrowing costs are charged to the revenue.

Interest and other cost in connection with the borrowing of fund are charged to the Statement of Profit and Loss.

0. Impairment of Assets

An assets is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which the assets are identified as impaired. The impairment loss recognized in the prior periods is reversed if there has been a change in the estimate of recoverable amount.

P. Research and Development

Revenue expenditure on Research and Development is recognized as expense in the year in which it is incurred. Capital expenditure on Research and Development is shown as addition to Fixed Assets.

Q. Expenditure on Regulatory Approvals

Expenditure incurred for obtaining regulatory approvals and registration of products for overseas markets is charged to revenue.

R. Government Grants and Subsidies

Capita! subsidy/Government grants are accounted for where it is reasonably certain that the ultimate collection will be made- Capital subsidy /Government grants related to specific depreciable assets are shown as deduction from the grass value of the asset concerned in arriving at its book value. The grant/subsidy is thus recognized in the Statement of Profit and Loss over the useful life of such depreciable assets by way of a reduced depreciation charge.

S. Leases

Lease rentals on assets taken on operating lease are recognized as expense in the Statement of Profit and Loss on an accrual basis over the lease term in accordance with the lease agreement.

T. Events after the date of Balance Sheet:

Wherever material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

U. Claims:

Claims against the company not acknowledged as debts are disclosed after a careful evolution of the facts and legal aspects of the matter involved.

V. Prior Period & Extra Ordinary Items:

Prior Period adjustment, extra ordinary items and changes in the accounting policies having material impact on the financial affairs of the Company are disclosed.

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Mar 31, 2014

A. Basis of Preparation

The financial statements are prepared in accordance with generally accepted accounting principles in India. The Company has prepared these financial statements to comply in alt material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 issued under section 211(3C) of the Companies Act, 1956 The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in preparation of the financial statements are consistent with those of the previous year,

B. Use of Estimates

The preparation of financial statements requires the Management of the Company to make estimates and assumptions that affect the reported baiance of assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision of accounting estimates is recognized prospectively in the current and future periods.

C Fixed Assets

a. All fixed assets are valued at cost of acquisition/ construction The cost of fixed assets comprises of its purchase price and attributable costs, including finance cost, of bringing the assets to its working condition for its intended use

b. The expenses Incurred during construction period, incidental to the Expansion / New Project are allocated to respective Fixed Assets in the year of commencement of the commercial operation.

D Depredation

Depreciation on fixed assets is provided on the "Written down Value Method" at the rates and in the manner prescribed under Schedule XIV of the Companies Act, 1956.

E Investments

Long term investments are stated at cost, less provision for diminution (other than temporary) in value

F Valuation of Inventories

Raw materials, Packing materials, Work in Process, Finished Goods and Traded Goods are valued at lower of cost or net realizable value after providing for obsolescence, if any. However, these items are considered to be realizable at cost if the finished products, In which they will be used, are expected to be sold at or above cost.

Cost comprises expenditure incurred in normal course of business in bringing such inventories to their present location and condition.

Cost of inventories is arrived on FIFO basis.

G Cash and Cash Equivalents

Cash and Cash equivalent for purpose of cash flow statement comprise cash at bank and in hand and short term investment with an original maturity of 3 months or less.

H Foreign Exchange Transaction

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction Foreign currency monetary assets & liabilities and forward contracts are restated at year end exchange rates.

Exchange Gain/Loss is credited / debited as Other Income / Other Expenses in the statement of Profit and Loss under the head "Foreign Exchange Fluctuation Account".

I Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date.

Contingent Liability are not recognized, but are disclosed in the Notes.

Contingent assets are neither recognized nor disclosed in the financial statements.

J Revenue Recognition

Revenue is recognized to the extent that is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when significant risks and rewards of ownership of the goods have been passed to the buyer, which ordinarily coincides with dispatch of goods to customers. Revenues are recorded at invoice value, but net of Sales 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 on time proportion basis.

Dividend income is recognized when the right to receive is established.

K Employee Benefits

Liabilities in respect of Retirement Benefits are provided by monthly payment to Pension and Provident Fund under the Employees Provident Funds (and Miscellaneous Provisions), Act, 1952.

The Gratuity payable at the time of retirement are charged to the Statement of Profit and Loss on basis of independent external actuarial valuation determined and basis of Projected Unit Credit method carried out annually. Actuarial gains and losses are immediately recognized in the Statement of Profit and Loss.

Company has not framed policy to pay Leave Encashment to the employees. Benefit in terms of workmen demand pending settlement, medical reimbursement, leave travel concession, are accounted when paid.

L Income Tax

The amount of Income Tax is provided in accordance with the provisions of Income Tax Act. 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized.

M Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial periods of time to get ready for intended use. Ail other borrowing costs are charged to the revenue.

Interest and other cost in connection with the borrowing of fund are charged to the Statement of Profit and Loss.

N Impairment of Assets

An assets is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which the assets are identified as impaired. The impairment loss recognized in the prior periods is reversed if there has been a change in the estimate of recoverable amount.

O Research and Development

Revenue expenditure on Research and Development is recognized as expense in the year in which it is incurred. Capital expenditure on Research and Development is shown as addition to Fixed Assets.

P Expenditure on Regulatory Approvals

Expenditure incurred for obtaining regulatory approvals and registration of products for overseas markets is charged to revenue.

Q Government Grants and Subsidies

Capital subsidy/Govemment grants are accounted for where it is reasonably certain that the ultimate collection will be made.

Capital subsidy/Govemment grants related to specific depreciable assets are shown as deduction from the gross value of the asset concerned in arriving at its book value. The grant/subsidy is thus recognized in the Statement of Profit and Loss over the useful life of such depreciable assets by way of a reduced depreciation charge.

R Leases

Lease rentals on assets taken on operating lease are recognized as expense in the Statement of Profit and Loss on an accrual basis over the lease term in accordance with the lease agreement.

S Events after the date of Balance Sheet:

Wherever material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts

T Claims:

Claims against the company not acknowledged as debts are disclosed after a careful evolution of the facts and legal aspects of the matter involved.

U Prior Period & Extra Ordinary Items:

Prior Period adjustment, extra ordinary items and changes in the accounting policies having material impact on the financial affairs of the Company are disclosed.

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Mar 31, 2013

A. Basis of Preparation

The financial statements are prepared in accordance with generally accepted accounting principles in India. The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 issued under section 211 (3C) of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in preparation of the financial statements are consistent with those of the previous year.

B. Use of Estimates

The preparation of financial statements requires the Management of the Company to make estimates and assumptions that affect the reported balance of assets and liabilities, revenue and expenses and disclosures relating to contingent liabilities. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates. Any revision of accounting estimates is recognized prospectively in the current and future periods.

C Fixed Assets

a. All fixed assets are valued at cost of acquisition/ construction. The cost of fixed assets comprises of its purchase price and attributable costs, including finance cost, of bringing the assets to its working condition for its intended use.

b. The expenses incurred during construction period, incidental to the Expansion / New Project are allocated to respective Fixed Assets in the year of commencement of the commercial operation.

D Depreciation

Depreciation on fixed assets is provided on the Written down Value Method at the rates and in the manner A prescribed under schedule XIV of the Companies Act, 1956.

E Investments

Long term investments are stated at cost, less provision for diminution (other than temporary) in value.

F Valuation of Inventories

Raw materials. Packing materials. Work in Process, Finished Goods and Traded

Goods are valued at lower of cost or net realizable value after providing for obsolescence, if any. However, these items are considered to be realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

Cost comprises expenditure incurred in normal course of business in bringing such inventories to their present location and condition.

Cost of inventories is arrived on FIFO basis.

G Cash and Cash Equivalents

Cash and Cash equivalent for purpose of cash flow statement comprise cash at bank and in hand and short term investment with an original maturity of 3 months or less.

I Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance Sheet date.

Contingent Liability are not recognized, but are disclosed in the Notes.

Contingent assets are neither recognized nor disclosed in the financial statements.

J Revenue Recognition

Revenue is recognized to the extent that is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from sale of goods is recognized when significant risks and rewards of ownership of the goods have been passed to the buyer, which ordinarily coincides with dispatch of goods to customers. Revenues are recorded at invoice value, but net of Sales returns and trade discounts. a

Benefits on account of entitlement of export incentives are recognized as and when the right to receive is established.

Interest income is recognized on time proportion basis.

Dividend income is recognized when the right to receive is established.

K Employee Benefits

Liabilities in respect of Retirement Benefits are provided by monthly payment to Pension and Provident Func under the Employees Provident Funds (and Miscellaneous Provisions), Act, 1952.

The Gratuity payable at the time of retirement are charged to the Statement of Profit and Loss on basis of independent external actuarial valuation determined and basis of Projected Unit Credit method carried out annually. Actuarial gains and losses are immediately recognized in the Statement of Profit and Loss.

Company has not framed policy to pay Leave Encashment to the employees. Benefit in terms of workmen demand pending set dement, medical reimbursement, leave travel concession, are accounted when paid.

L Income Tax

The amount of Income Tax is provided in accordance with the provisions of Income Tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being differences between taxable incomes and accounting income, that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is a virtual certainty that sufficient taxable profits will be available against which such deferred tax assets can be realized.

M Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial periods of time to get ready for intended use. All other borrowing costs are charged to the revenue.

Interest and other cost in connection with the borrowing of fund are charged to the Statement of Profit and Loss.

N Impairment of Assets

An assets is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which the assets are identified as impaired. The impairment loss recognized in the prior periods is reversed if there has been a change in the estimate of recoverable amount.

O Research and Development

Revenue expenditure on Research and Development is recognized as expense in the year in which it is incurred. Capital expenditure on Research and Development is shown as addition to Fixed Assets.

P Expenditure on Regulatory Approvals

Expenditure incurred for obtaining regulatory approvals and registration of products for overseas markets is charged to revenue.

Q Government Grants and Subsidies

Capital subsidy/Government grants are accounted for where it is reasonably certain that the ultimate collection will be

Capital subsidy/Government grants related to specific depreciable assets are shown as deduction from the gross value at the asset concerned in arriving at its book value. The grant/subsidy is thus recounted in the Statement of Profit and Loss over the useful life of such depreciable assets by way of a reduced depreciation charge.

R Leases

Lease rentals on assets taken on operating lease are recognized as expense in the Statement of Profit and Loss on an accrual basis over the lease term in accordance with the lease agreement.

S Events after the date of Balance Sheet:

Wherever material, events occurring after the date of Balance Sheet are considered up to the date of adoption of the accounts.

T Claims:

Claims against the company not acknowledged as debts are disclosed after a careful evolution of the facts and legal aspects of the matter involved.

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Mar 31, 2010

(i) Basics of Accounting:

The financial statements are prepared under historical cost convention on an accrual basis and comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956.

(ii) Fixed Assets:

Fixed Assets are stated at cost of acquisition less accumulated depreciation.

(iii) Sales:

Sales are shown net of returns and include Excise Duty and Sales Tax wherever applicable.

(iv) Depreciation:

Depreciation on fixed assets has been provided on straight-line method at the rates specified in Schedule XIV of the Companies Act, 1956.

(v)Inventories:

Inventories are valued at cost or market price, whichever is lower.

(vi) Investments:

Investments are valued at cost.

(vii) Excise duty:

Sales and Purchase are inclusive of excise duty.

(viii) Foreign Currency Transaction:

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of transaction any.

Exchange Gain/Loss is credited / debited in Export Sales Account.

(ix) Recognition of income & expenditure:

All income and expenditure are accounted on accrual basis. However, provision for leave encashment and retirement benefits are accounted for on cash basis.

(x) Miscellaneous Expenditure/Public Issue Expenses:

These are written off over the estimated period of utilisation in 10 years.