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Accounting Policies of Premco Global Ltd. Company

Mar 31, 2018

NOTE 1 : General Information

PREMCO GLOBAL LIMITED ( the Company) ( CIN : L18100MH1986PLC040911 ) is a public limited company and is listed on Bombay Stock Exchange ( BSE ). The Company is engaged interalia, in the business of manufacturing of Knitted & Narrow woven Elastics.

These financial statements were approved for issue by board of directors on May 29, 2018.

NOTE 2 : Significant Accounting Policies

1. Basis of preparation of Financial Statements

a) These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS), notified under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies ( Indian Accounting Standards) Rules, 2015, under the historical cost convention on accrual basis, except for certain financial instruments (including derivatives instruments) and defined benefit plans - Plan assets, which are measured at fair values, as specified at places of respective categories.

The financial statements up to year ended March 31, 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2014 and other relevant provisions of the Act (âPrevious GAAPâ).

These financial statements are the first financial statements of the Company under Ind AS. Refer note 48 related to First-time Adoption of Ind AS for an explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows.

b) All the assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be twelve months for the purpose of current - non-current classification of assets and liabilities.

c) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

2. Property, Plant and Equipment and Depreciation

A) Property Plant and Equipment:

a) Freehold land is carried at historical cost. All other Tangible Fixed assets are stated at cost of acquisition or construction, less accumulated depreciation. All costs, including borrowing cost till respective assets is put to use, are capitalized.

b) Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

c) Losses arising from the retirement of and gains & losses arising from disposal of fixed assets, which are carried at cost, are recognized in the statement of profit & loss.

d) Transition to Ind AS,

On transition to Ind AS, the Company has opted to continue with the carrying value of all of its property, plant and equipment recognized as at April 01, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment on the transition date.

B) Depreciation:

Depreciation has been provided as under:

(i) For assets existing on 1^st April 2014 the carrying amount will be amortized over the remaining useful lives on straight line method as prescribed in the schedule II of Companies Act, 2013.

(ii) For the assets added after the 1^st April 2014 :- On straight line method at the useful Lives prescribed in Schedule II to The Companies Act, 2013.

(iii) Leasehold Improvements are written off over the period of lease or lease term whichever is shorter.

(iv) Intangible assets comprising of software capitalized is amortized over a period of 3 years. Intangible assets comprising of cost incurred, Patent capitalized is amortized over a period of 5 years.

(v) Depreciation on assets added/ disposed off during the year has been provided on pro-rata basis with reference to the days of addition/ disposal.

(vi) The residual values are not more than 5% of the original cost of the asset

3. Foreign Exchange Transaction

(i) Functional currency and presentation currency :

The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees, which is the Companyâs functional and presentation currency.

(ii) Transactions and balances :

Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the time of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from Monetary assets and liabilities in foreign currency, outstanding at the end of the year are converted into Indian currency at the rate prevailing on the Balance Sheet date. Resulting gain or loss is recognized in statement of profit or loss.

At the reporting date, non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction.

Forward Exchange Contracts:-

The premium or discount arising at the inception of the forward exchange contracts entered into to hedge an existing assets/ liability, is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit & loss in the reporting period in which the exchange rate changes.

Transition to Ind AS

On transition to Ind AS, exchange differences on Forward Contracts Entered are recognized in the statement of profit & loss in the reporting period in which the exchange rate changes, under the head Other Comprehensive Income (OCI).

Forward exchange contracts outstanding as at the yearend on account of firm commitment/ highly probable forecast transaction are marked to market and the gains or the losses, if any, is recognized as Other Comprehensive Income (OCI) , in line with Ind As 21 and 39.

4. Investments

a) Investment in subsidiary which is of equity in nature is carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investment individually.

b) Other Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All the other investments are classified as long-term investments. Current investments and Long Term Investments are carried at fair value. Long-term investments are carried at Fair Market Value / Net realizable value at the Balance sheet date .

Transition to Ind AS :

(a) Equity in subsidiary :

Upon first time adoption of Ind AS, the Company has opted to continue with the carrying value of all of its investment in subsidiary recognized as at April 1, 2016 measured as per previous GAAP, and use that carrying value as the deemed cost of investment in subsidiary on the transition date.

(b) Other Investments :

Upon first time adoption of Ind AS, the Company has opted to value at fair Price to all of its other investments as at April 1, 2016 and use that carrying value as the deemed cost of such other investment on the transition date. The resulting gain or loss arising from such a transition is added to retained earnings in balance sheet as on the April 1, 2016.

5. Inventories

Inventories are stated at lower of cost and net realizable value.

Cost of raw materials is determined using FIFO method. 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.

The cost of finished goods and Stock-in-process comprises raw materials, direct labour, other direct costs and related production overheads upto the relevant stage of completion.

Waste material are valued at Net Realizable value.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

License stock are stated at the Duty credit entitlement value.

6. Recognition of Income & Expenditure

(i) Revenue/ Incomes and Costs/ Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) a) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

b) Sales of goods are accounted excluding taxes, wherever applicable.

(iii) Export incentives under the âDuty Drawback Schemeâ etc. is accounted as income in the year of export.

(iv) Interest Income/ expenditure is recognized on the time proportion basis taking into account of the amount outstanding and the rate applicable.

(v) Dividend income is recognized when the right to received dividend is established.

(vi) Government Grants in the form of Market Linked Focus Product License (MLFPL Scheme)/M.E.I.S are recognized based on export on an accrual basis.

7. Government Grants & Subsidies

Government Grants are recognized when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Revenue grants are recognized in the Statement of Profit and Loss. Capital grants relating to specific tangible / Intangible Assets are shown separately as Current/Non-Current Liability and has not been reduced from the gross value of the respective Tangible / Intangible Assets.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) Provident fund:-

The contribution of the Company on a monthly basis towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue. The company has paid to regulatory authority & has no further obligations other than these contributions.

b) Escrow Deposits Scheme:-

The company has a defined contribution plan towards employee escrow deposit scheme for eligible employeeâs as per terms of employment.

The company also under obligation to pay interest on the escrow deposit contribution made by Company as well as the equivalent amount of cumulative escrow deposit monthly retention recovered from the employee covered in the scheme. The interest is provided as liability to be paid upon Retirement, resignation, termination of employment subject to fulfillment of agreed term & Conditions.

Ind AS Transition

Upon introduction to Ind AS, The Company has re-assessed its liability based on (using the Projected Unit Credit method) as at April 1, 2016 and thereafter at the end of each year. Actuarial losses/ gains are recognized in the statement of profit & loss in the year in which they arise.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income, which are included in retained earnings in the statement of changes in equity and in the balance sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the statement of profit and loss as past service cost.

c) Employee Security Deposit scheme:-

The company retains an amount as a security deposit on monthly basis for eligible employees as a part of employee retention policy for 3 years from the date of appointment. The company also under an obligation to pay interest on the security deposit retention received from the employee covered in the scheme. The interest is provided as liability to be paid upon Retirement, resignation, termination of employment subject to fulfillment of agreed term & Conditions.

d) Leave Encashment:-

Leave Encashment towards accumulated Compensated Absences are the companyâs defined benefit plan payable upon Retirement, resignation, termination of employment. The present value of the obligation under such defined benefit plan is determined based on actuarial Valuation using the Projected Unit Credit Method.

e) Gratuity:-

The company provides for gratuity, a defined benefit plan (the Gratuity plan) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment. The companyâs liability is actually determined under (using the Projected Unit Credit method) at the end of each year.

Actuarial losses/ gains are recognized in the statement of profit & loss in the year in which they arise.

The company has subscribed to a gratuity plan which is administrated through HDFC Standard life and a trust which is administrated through trustees.

10. Provision & Contingent Liabilities Provision

provision are recognized when there is a present obligation as a result of a past event and it is probable that an outflow of benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.

Contingent liabilities

Contingent liabilities are disclosed when there is a possible obligation arising from the past events, the existence of which will be confirmed only on the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not portable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

11. Income Tax, Deferred Tax and Dividend Distribution Tax

a) Current and Deferred Tax

Tax expense for the period, comprising Current tax and Deferred Tax are included in the determination of net profit or loss for the period.

Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in India.

Deferred Tax is recognized for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax assets and liabilities are measured using the tax rates and tax laws that have been enacted and substantively enacted by the Balance Sheet date. At each Balance Sheet date, the company re-assesses unrecognized deferred tax assets, if any.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances related to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognized in the statement of profit and loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity.

b) Dividend Distribution Tax :

Dividend distribution tax paid in the dividends is recognized consistently with the presentation of the transaction that creates the income tax consequence. Dividend distribution tax is charged to Statement of Profit and Loss, if the dividend itself is charged to statement of profit and loss. If the dividend is recognized in equity, the presentation of dividend distribution tax is recognized in equity.

12. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, construction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense over the period of Term Loan.

13. Impairment of Assets

Assessment is done at each Balance Sheet date as to whether there is any indication that a tangible asset may be impaired. For the purpose of assessing impairment, the smallest identifiable group of asset that generates cash inflows from continuing use that are largely independent of the cash inflow from other assets or groups of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the asset/cash generating unit is made.

Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an assetâs or cash generating unitâs net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an assets and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased.

14. Lease Rentals:

Leases in which a significant portion and rewards of ownership are not transferred to the company as lessee are classified as operating leases. Lease Rentals for assets taken on operating lease are recognized as under expenses in Profit and Loss Account over the lease term on accrual basis.

15. Cash and Cash Equivalents:

In the Cash flow statement, cash and cash equivalents include cash on hand, demand deposits with bank, other short term highly liquid investments with original maturity of three months or less.

16. Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. The Weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for the events, such as bonus shares, other than conversion of potential equity share that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

17. Financial Instruments

A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

1) Financial Assets

i) Classification

The Company classifies its financial assets in the following measurement categories:

a) at fair value either through other comprehensive income (FVOCI) or through profit and loss (FVTPL); and

b) at amortized cost.

The classification depends on the entityâs business model for managing the financial assets and the contractual terms of the cash lows.

Gains and losses will either be recorded in the statement of profit and loss or other comprehensive income for assets measured at fair value.

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

For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value or through other comprehensive income.

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

ii) Measurement

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

a) Debt instruments

There are three measurement categories into which the Company classifies its debt instruments:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at Amortized cost. Gain or loss on a debt investment that is subsequently measured at Amortized cost and is not part of a hedging relationship is recognized in the statement of profit and loss when the asset is derecognized or impaired. Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assetsâ 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 income and foreign exchange gains and losses which are recognized in profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to the statement of profit and loss and recognized in other income or other expenses (as applicable). Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through proit and loss (FVTPL) : Assets that do not meet the criteria for Amortized cost or FVOCI are measured at fair value through the profit and loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit and loss and is not part of a hedging relationship is recognized in the statement of profit and loss and within other income or other expenses (as applicable) in the period in which it arises. Interest income from these financial assets is included in other income or other expenses, as applicable.

b) Equity instruments

The Company measures all equity investments (except Equity investment in subsidiaries and joint ventures) at fair value. The Companyâs management has opted to present fair value gains and losses on equity investments through profit and loss account. Dividends from such investments are recognized in the statement of profit and loss as other income when the Companyâs right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit and loss are recognized in other income or other expenses, as applicable in the statement of profit and loss.

iii) Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at Amortized cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

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.

iv) Derecognition of financial assets

A financial asset is derecognized only when -

a) The Company has transferred the rights to receive cash flows from the financial asset or

b) Retains the contractual rights to receive the cash lows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

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

Where the company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.

v) Income Recognition Interest income

Interest income from debt instruments is recognized using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

Dividend income

Dividends are recognized in the statement of profit and loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.

vi) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short- term, highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

vii) Trade Receivables

Trade receivables are recognized initially at their fair value and subsequently measured at Amortized cost using the effective interest rate method, less provision for impairment.

2) Financial Liabilities

i) Measurement

Financial liabilities are initially recognized at fair value, reduced by transaction costs (in case of financial liabilities not recorded at fair value through profit and loss), that are directly attributable to the issue of financial liability. All financial liabilities are subsequently measured at Amortized cost using effective interest method. Under the effective interest method, future cash outflow are exactly discounted to the initial recognition value using the effective interest rate, over the expected life of the financial liability, or, where appropriate, a shorter period. At the time of initial recognition, there is no financial liability irrevocably designated as measured at fair value through profit and loss.

ii) Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially 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 original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.

iii) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid as per payment terms.

iv) Derivatives and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. Resulting gains/(losses) are recorded in statement of profit and loss under other income/other expenses. Derivatives are classified as a current asset or liability when expected to be realized/settled within 12 months of the balance sheet date.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

NOTE : 3A Critical estimates and judgments

In the application of the companyâs accounting policies, which are described in note 2, the management is required to make judgment, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other process. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future period if the revision affects both current and future period.

The following are the critical estimates and judgments that have the significant effect on the amounts recognized in the financial statements.

Critical estimates and judgments

i) Estimation of current tax expense and deferred tax

The calculation of the companyâs tax charge necessarily involves a degree of estimation and judgment 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. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax in the period in which such determination is made.

Recognition of deferred tax assets / liabilities

The recognition of deferred tax assets is based upon whether it is probable that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable profits, reference is made to the approved budgets of the company. Where the temporary differences are related to losses, local tax law is considered to determine the availability of the losses to offset against the future taxable profits as well as whether there is convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the company. Significant items on which the Company has exercised accounting judgment include recognition of deferred tax assets in respect of losses. The amounts recognized in the financial statements in respect of each matter are derived from the Companyâs best estimation and judgment as described above.

ii) Estimation of Provisions and Contingent Liabilities

The company exercises judgment in measuring and recognizing provisions and the exposures to contingent liabilities, which is related to pending litigation or other outstanding claims. Judgment is necessary in assessing the likelihood that a pending claim will succeed, or a liability will arise, and to quantify the possible range of the financial settlement.

Because of the inherent uncertainty in this evaluation process, actual liability may be different from the originally estimated as provision. Although there can be no assurance of the final outcome of the legal proceedings in which the company is involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.

iii) Estimation of useful life of Property, Plant and Equipment, Intangible assets, Investment properties

Property, Plant and Equipment, Intangible assets, Investment properties represent a significant proportion of the asset base of the company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and the expected residual value at the end of its life. The useful lives and residual values of companyâs assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The useful lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.

iv) Estimation of provision for inventory

The company writes down inventories to net realizable value based on an estimate of the reliability of inventories. Write downs on inventories are recorded where events or changes in circumstances indicate that the balances may not realized. The identification of write-downs requires the use of estimates of net selling prices of the down-graded inventories. Where the expectation is different from the original estimate, such difference will impact the carrying value of inventories and write-downs of inventories in the periods in which such estimate has been changed.

v) Estimation of defined benefit obligation

The present value of the defined benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for post employments plans include the discount rate. Any changes in these assumptions will impact the carrying amount of such obligations.

The company determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit obligations. In determining the appropriate discount rate, the company considers the interest rates of government bonds of maturity approximating the terms of the related plan liability.

vi) Estimated fair value of Financial Instruments

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Management uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

vii) Impairment of Trade Receivable

The impairment provisions for trade receivable are based on assumptions about risk of default and expected loss rates. The company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

3B New accounting standards/ amendments to existing standards issued but not yet effective

Following are the amendments to existing standards which have been issued by The Ministry of corporate Affairs (-MCA) that are not effective for the reporting period and have not been early adopted by the company:

a) Amendments to Ind AS 115, Revenue from contracts with customers:

Ind AS 115, Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entityâs contracts with customers. Revenue is recognized when a customer obtains control of a promised good or service and thus has the ability to direct the use and obtain the benefits from the good or service in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard replaces Ind AS 18 Revenue and related appendices.

A new five-step process must be applied before revenue can be recognized:

1. identify contracts with customers

2. identify the separate performance obligation

3. determine the transaction price of the contract

4. allocate the transaction price to each of the separate performance obligations, and

5. recognize the revenue as each performance obligation is satisfied.

The Company is currently under the process of assessing the potential impact of this amendment. These amendments are mandatory for the reporting period beginning on or after April 01, 2018.

b) Amendments to Appendix B to Ind AS 21 Foreign currency transactions and advance consideration:

The MCA has notified Appendix B to Ind AS 21, foreign currency transactions and advance consideration. The appendix clarifies how to determine the date of transaction for the exchange rate to be used on initial recognition of a related asset, expense or income where an entity pays or receives consideration in advance for foreign currency- denominated contracts.

For a single payment or receipt, the date of the transaction should be the date on which the entity initially recognizes the non-monetary asset or liability arising from the advance consideration (the prepayment or deferred income/ contract liability). If there are multiple payments or receipts for one item, date of transaction should be determined as above for each payment or receipt.

The Company is currently assessing the potential impact of this amendment. These amendments will be applied prospectively to items in scope, for the reporting period beginning on or after April 01, 2018.

c) Amendments to Ind AS 40 Investment property - Transfers of investment property:

The amendments clarify that transfers to, or from, investment property can only be made if there has been a change in use that is supported by evidence. A change in use occurs when the property meets, or ceases to meet, the definition of investment property. A change in intention alone is not sufficient to support a transfer. The list of evidence for a change of use in the standard was re-characterized as a non-exhaustive list of examples and scope of these examples have been expanded to include assets under construction/development and not only transfer of completed properties.

The Company is currently assessing the potential impact of this amendment.

The Company has opted to apply these amendments prospectively to changes in use that occur on or after the date of initial application i.e. April 01, 2018. On April 01, 2018, the Company shall reassess the classification of properties held at that date and, if applicable, reclassify properties to reflect the conditions that exist as at that date.

d) Amendments to Ind AS 12 Income taxes regarding recognition of deferred tax assets on unrealized losses:

The amendment clarify the accounting for deferred taxes where an asset is measured at fair value and at fair value is below the assetâs tax base. The management is in the process of assessing the impact of above amendments. The company will adopt the amendment from April 1, 2018.

There are no other standards that are not yet effective and that would be expected to have a material impact on the company in the current of future reporting periods and on foreseeable future transactions.

Mar 31, 2017

1. Basis of preparation of Financial Statements

a) These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis and accounting standards notified under section 133 of the Companies Act, 2013.

b) All the assets and liabilities have been classified as current or non current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be twelve months for the purpose of current - non-current classification of assets and liabilities.

c) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

d) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period .The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

A) Fixed Assets:

a) Tangible Fixed assets stated at cost of acquisition or construction, less accumulated depreciation. All costs, including borrowing cost till respective assets is put to use, are capitalized.

b) Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

c) Losses arising from the retirement of and gains & losses arising from disposal of fixed assets which are carried at cost are recognized in the statement of profit & loss.

B) Depreciation:

d) Depreciation has been provided as under:

(i) For assets existing on 1st April 2014 the carrying amount will be amortized over the remaining useful lives on straight line method as prescribed in the schedule II of Companies Act, 2013.

(ii) For the assets added after the 1st April 2014 :- On straight line method at the useful Lives prescribed in Schedule II to The Companies Act, 2013.

(iii) Leasehold Improvements are written off over the period of lease.

(iv) Intangible assets include Cost of software capitalized is amortized over a period of 3 years.

(v) Depreciation on assets added/ disposed off during the year has been provided on pro-rata basis with reference to the days of addition/ disposal.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transaction. Monetary assets and liabilities in foreign currency, outstanding at the end of the year are converted into Indian currency at the rate prevailing on the Balance Sheet date. Resulting gain or loss is recognized in statement of profit or loss.

At the reporting date, non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction.

Forward Exchange Contracts:-

Forward exchange contracts outstanding as at the year end on account of firm commitment/ highly probable forecast transaction are marked to market and the gains or the losses, if any , are recognized in the statement of profit & loss.

4. Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All the other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investment individually.

5. Inventories

Inventories are stated at lower of cost and net realizable value.

The cost of finished goods and Stock-in-process comprises raw materials, direct labour, other direct costs and related production overheads upto the relevant stage of completion.

Waste material are valued at Net Realizable value.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

License stock are stated at the Duty credit entitlement value.

6. Recognition of Income & Expenditure

(i) Revenue/ Incomes and Costs/ Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) a) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods.

b) Sales of goods are accounted inclusive of taxes, wherever applicable.

(iii) Export incentives under the âDuty Drawback Schemeâ etc. is accounted as income in the year of export.

(iv) Interest Income/ expenditure is recognized on the time proportion basis taking into account of the amount outstanding and the rate applicable.

(v) Dividend income is recognized when the right to received dividend is established.

(vi) Government Grants in the form of Market Linked Focus Product License ( MLFPL Scheme) are recognized when the respective license is issued to the company at the Duty credit entitlement value

7. Government Grants & Subsidies

Government Grants are recognized when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Revenue grants are recognized in the Statement of Profit and Loss. Capital grants relating to specific tangible / Intangible Assets are reduced from the gross value of the respective Tangible / Intangible Assets. Other capital grants in the nature of promoterâs contribution are credited to capital reserve.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) Provident fund:-

b) Escrow Deposits Scheme:-

The company has a defined contribution plan towards employee escrow deposit scheme for eligible employeeâs as per terms of employment. The contribution of the Company on Monthly basis are charged to revenue and provided as liability to be paid upon Retirement, resignation, termination of employment subject to fulfillment of agreed term & Conditions.

c) Employee Security Deposit scheme:-

d) Leave Encashment:-

e) Gratuity:-

Actuarial losses/ gains are recognized in the statement of profit & loss in the year in which they arise.

The company has subscribed to a gratuity plan which is administrated through HDFC Standard life and a trust which is administrated through trustees.

The plan assets for funding the liability are insurer managed funds. The shortfall, if any in the Actuarially determined liability and the value of plan assets as on reporting date is provided as liability and recognized in statement of profit & loss in the year whereas the surplus is ignored as it would be available to fund future incremental liability.

The actuarial losses/ gains are recognized in the year in which they arise.

10. Provision & Contingent Liabilities Provision:-

Contingent liabilities:-

Contingent liabilities are disclosed when there is a possible obligation arising from the past events, the existence of which will be confirmed only on the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not portable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

11. Current and Deferred Tax

Tax expense for the period, comprising Current tax and Deferred Tax are included in the determination of net profit or loss for the period.

Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in India.

12. Borrowing Cost

13. Impairment of Assets

14. Lease Rentals:

Lease Rentals for assets taken on operating lease are recognized as under expenses in Profit and Loss Account over the lease term on accrual basis.

15. Cash and Cash Equivalents:

In the Cash flow statement, cash and cash equivalents include cash on hand, demand deposits with bank, other short term highly liquid investments with original maturity of three months or less.

16. Earnings per share:

Mar 31, 2016

1. Basis of preparation of Financial Statements

b) All the assets and liabilities have been classified as current or noncurrent 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 products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be twelve months for the purpose of current - non-current classification of assets and liabilities.

c) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

2. Fixed Assets and Depreciation

A) Fixed Assets:

a) Tangible Fixed assets stated at cost of acquisition or construction, less accumulated depreciation. All costs, including borrowing cost till respective assets is put to use, are capitalized.

b) Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

c) Losses arising from the retirement of and gains & losses arising from disposal of fixed assets which are carried at cost are recognized in the statement of profit & loss.

B) Depreciation:

d) Depreciation has been provided as under:

(i) For assets existing on 1st April 2014 the carrying amount will be amortized over the remaining useful lives on straight line method as prescribed in the schedule II of Companies Act, 2013.

(ii) For the assets added after the 1st April 2014 :-On straight line method at the useful

Lives prescribed in Schedule II to The Companies Act, 2013.

(iii) Leasehold Improvements are written off over the period of lease.

(iv) Intangible assets include Cost of software capitalized is amortized over a period of 3 years.

(v) Depreciation on assets added/ disposed off during the year has been provided on pro-rata basis with reference to the days of addition/ disposal.

3. Foreign Exchange Transaction

At the reporting date, non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction.

Forward Exchange Contracts:-

Forward exchange contracts outstanding as at the year end on account of firm commitment/ highly probable forecast transaction are marked to market and the gains or the losses, if any , are recognized in the statement of profit & loss.

4. Investments

5. Inventories

Inventories are stated at lower of cost and net realizable value.

The cost of finished goods and Stock-in-process comprises raw materials, direct labour, other direct costs and related production overheads up to the relevant stage of completion.

Waste material are valued at Net Realizable value.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

License stock are stated at the Duty credit entitlement value.

6. Recognition of Income & Expenditure

(i) Revenue/ Incomes and Costs/ Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) a) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the

dispatch of goods.

b) Sales of goods are accounted inclusive of taxes, wherever applicable.

(iii) Export incentives under the "Duty Drawback Scheme" etc. is accounted as income in the year of export.

(iv) Interest Income/ expenditure is recognized on the time proportion basis taking into account of the amount outstanding and the rate applicable.

(v) Dividend income is recognized when the right to received dividend is established.

(vi) Government Grants in the form of Market Linked Focus Product License ( MLFPL Scheme) are recognized when the respective license is issued to the company at the Duty credit entitlement value

7. Government Grants & Subsidies

Government Grants are recognized when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Revenue grants are recognized in the Statement of Profit and Loss. Capital grants relating to specific tangible / Intangible Assets are reduced from the gross value of the respective Tangible / Intangible Assets. Other capital grants in the nature of promoter''s contribution are credited to capital reserve.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) Provident fund:-

b) Escrow Deposits Scheme:-

i) The company has a defined contribution plan towards employee escrow deposit scheme for eligible employee''s as per terms of employment. The contribution of the Company on Monthly basis are charged to revenue and provided as liability to be paid upon Retirement, resignation, termination of employment subject to fulfillment of agreed term & Conditions.

c) Employee Security Deposit scheme:-

d) Leave Encashment:-

Leave Encashment towards accumulated Compensated Absences are the company''s defined benefit plan payable upon Retirement, resignation, termination of employment. The present value of the obligation under such defined benefit plan is determined based on actuarial Valuation using the Projected Unit Credit Method.

e) Gratuity:-

The company provides for gratuity, a defined benefit plan (the Gratuity plan) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. The company''s liability is actually determined under (using the Projected Unit Credit method) at the end of each year.

Actuarial losses/ gains are recognized in the statement of profit & loss in the year in which they arise.

The company has subscribed to a gratuity plan which is administrated through HDFC Standard life and a trust which is administrated through trustees.

The plan assets for funding the liability are insurer managed funds. The shortfall in the Actuarially determined liability and the value of plan assets as on reporting date is provided as liability and recognized in statement of profit & loss in the year.

The actuarial losses/ gains are recognized in the year in which they arise.

10. Provision & Contingent Liabilities Provision:-

Contingent liabilities:-

Contingent liabilities are disclosed when there is a possible obligation arising from the past events, the existence of which will be confirmed only on the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not portable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

11. Current and Deferred Tax

Tax expense for the period, comprising Current tax and Deferred Tax are included in the determination of net profit or loss for the period.

Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in India.

12. Borrowing Cost

13. Impairment of Assets

Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an asset''s or cash generating unit''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an assets and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased.

14. Lease Rentals:

Lease Rentals for assets taken on operating lease are recognized as under expenses in Profit and Loss Account over the lease term on accrual basis.

15. Cash and Cash Equivalents:

In the Cash flow statement, cash and cash equivalents include cash on hand, demand deposits with bank, other short term highly liquid investments with original maturity of three months or less.

16. Earnings per share:

Mar 31, 2015

1. Basis of preparation of Financial Statements

a) These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rule, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspect with the Accounting Standards notified under Section 211(3C) of Companies Act, 1956 [ Companies (Accounting Standards ), 2006 as amended ] and other relevant provisions of the Companies Act, 2013.

b) 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 products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be twelve months for the purpose of current - non-current classification of assets and liabilities.

c) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

d) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

A) Fixed Assets:

a) Tangible Fixed assets stated at cost of acquisition or construction, less accumulated depreciation. All costs, including borrowing costtill respective assets is put to use, are capitalized.

b) intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

c) Losses arising from the retirement of and gains & losses arising from disposal of fixed assets which are carried at cost are recognized in the statement of profit & loss.

B) Depreciation:

d) Depreciation has been provided as under:

(i) For assets existing on 1st April 2014 the carrying amount will be amortized over the remaining useful lives on straight line method as prescribed in the schedule II of Companies Act, 2013.

(ii) For the assets added after the 1st April 2014 On straight line method at the useful Lives prescribed in Schedule II to The Companies Act, 2013.

(iii) Leasehold Improvements are written off over the period of lease.

(iv) Intangible assets include Cost of software capitalized is amortized over a period of 3 years.

(v) Depreciation on assets added/ disposed off during the year has been provided on pro-rata basis with reference to the days of addition/ disposal.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transaction. Monetary assets and liabilities in foreign currency, outstanding at the end of the year are converted into Indian currency at the rate prevailing on the Balance Sheet date. Resulting gain or loss is recognized in statement of profit or loss.

At the reporting date, non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction.

Forward Exchange Contracts:

The premium or discount arising at the inception of the forward exchange contracts entered into to hedge an existing assets/ liability, is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit & loss in the reporting period in which the exchange rate changes. Any profit or loss arising on cancellation or renewal of such forward exchange contracts is recognized as income or expense for the period.

Forward exchange contracts outstanding as at the year end on account of firm commitment/ highly probable forecast transaction are marked to market gains & the losses, if any, are recognized in the statement of profit & loss.

4. Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. Ail the other investments are classified as long-term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of investments, such reduction being determined and made for each investment individually.

5. Inventories

Inventories are stated at lower of cost and net realizable value.

Cost of raw materials is determined using FIFO method. 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.

The cost of finished goods and Stock-in-process comprises raw materials, direct labour, other direct costs and related production overheads upto the relevant stage of completion.

Waste materials are valued at Net Realizable value.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

6. Recognition of Income & Expenditure

(i) Revenue / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(ii) a) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is gene rally on the dispatch of goods.

b) Sales of goods are accounted inclusive of taxes, wherever applicable.

(iii) Export incentives underthe"Duty Drawback Scheme" etc. is accounted as income in the year of export.

(iv) Interest Income/ expenditure is recognized on the time proportion basis taking into account of the amount outstanding and the rate applicable.

(v) Dividend income is recognized when the right to received dividend is established.

7. Government Grants & Subsidies

Government grants are recognized when there is a reasonable assurance that the same will be received and ail attaching conditions will be complied with. Revenue grants are recognized in the Statement of Profit and Loss. Capital grants relating to specific tangible / Intangible Assets are reduced from the gross value of the respective Tangible / Intangible Assets. Other capital grants in the nature of promoter's contribution are credited to capital reserve.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) Provident Fund:

The contribution of the Company on a monthly basis towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue. The company has paid to regulatory authority & has no further obligations other than these contributions.

b) Escrow Deposits Scheme:

The company has a defined contribution plan towards employee escrow deposit scheme for eligible employees as perterms of employment. The contribution ofthe Company on monthly basis are charged to revenue and provided as liability to be paid upon Retirement, Resignation or Termination of employment subject to fulfillment of agreed term & Conditions.

The company also under obligation to pay interest on the escrow deposit contribution made by Company as well as the equivalent amount of cumulative escrow deposit monthly retention recovered from the employee covered in the scheme. The interest is provided as liability to be paid upon Retirement, Resignation or Termination of employment subject to fulfillment of agreed term & Conditions.

c) Employee Security Deposit Scheme:

The company retains an amount as a security deposit on monthly basis for eligible employees as a part of employee retention policy for 3 years from the date of appointment. The Company also under an obligation to pay interest on the security deposit retention received from the employee covered in the scheme. The interest is provided as liability to be paid upon Retirement, Resignation or Termination of employment subject to fulfillment of agreed term & Conditions.

d) Leave Encashment:

Leave Encashment towards accumulated Compensated Absences are the Company's defined benefit plan payable upon Retirement, Resignation or Termination of employment. The present value of the obligation under such defined benefit plan is determined based on actuarial Valuation using the Projected Unit Credit Method.

e) Gratuity:

The Company provides for gratuity, a defined benefit plan (the Gratuity plan) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity plan provides a lumpsum payment to vested employees at retirement, death, incapacitation ortermination of employment, of an amount based on the respective employee's salary and the tenure of employment. The Company's liability is actually determined under (using the Projected Unit Credit method) at the end of each year. Actuarial losses/gains are recognized in the statement of profit & loss in the year in which they arise.

The Company has subscribed to a gratuity plan which is administrated through HDFC Standard life Insurance Company Limited and a trust which is administrated through trustees.

The plan assets for funding the liability are insurer managed funds. The shortfall in the actuarially determined liability and the value of plan assets as on reporting date is provided as liability and recognized in statement of profit & loss in the year.

The actuarial losses / gains are recognized in the year in which they arise.

10. Provision & Contingent Liabilities Provision:

Provision are recognized when there is a present obligation as a result of a past event and it is probable that an outflow of benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.

Contingent Liabilities:

Contingent liabilities are disclosed when there is a possible obligation arising from the past events, the existence of which will be confirmed only on the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not portable that an outflow of resources will be required to settle ora reliable estimate of the amount cannot be made.

11. Current and Deferred Tax

Tax expense for the period, comprising Current tax and Deferred Tax are included in the determination of net profit or loss for the period.

Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in India.

Deferred Tax is recognized for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax assets and liabilities are measured using the tax rates and tax laws that have been enacted and substantively enacted by the Balance Sheet date. At each Balance Sheet date, the company re-assesses unrecognized deferred tax assets, if any.

12. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, construction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

13. Impairment of Assets

Assessment is done at each Balance Sheet date as to whether there is any indication that a tangible asset may be impaired. For the purpose of assessing impairment, the smallest identifiable group of asset that generates cash inflows from continuing use that are largely independent of the cash inflow from other assets or groups of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the asset/cash generating unit is made.

Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. Recoverable amount is higher of an asset's or cash generating unit's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an assets and from its disposal at the end of its useful life. Assessment is aiso done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased.

14. Lease Rentals

Lease Rentals for assets taken on operating lease are recognized as under expenses in Profit and Loss Account over the lease term on accrual basis.

15. Cash and Cash Equivalents:

In the Cash flow statement, cash and cash equivalents include cash on hand, demand deposits with bank, other short term highly liquid investments with original maturity of three months or less.

16. Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. The Weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for the events, such as bonus shares, other than conversion of potential equity share that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

Mar 31, 2014

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principles and the provision of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

c) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period .The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

a) Fixed assets stated at cost of acquisition or construction or less accumulated depreciation. All costs, including financial cost till commencements of commercial production, net charges on Foreign Exchange Contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalized.

b) Depreciation on fixed assets provided on straight-line method at the rates prescribed by Schedule XIV of the Companies Act, 1956.

c) Leasehold Improvements are written off over the period of lease.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Outstanding balances are valued at the rate prevailing on the Balance Sheet date.

4. Investments

The Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

5. Inventories

The inventories are valued as follows:

a) Raw materials, Stores, Spares and Stock in transit are valued at cost.

b) Stock in process is valued at cost.

c) Finished goods are valued at cost or market value whichever is lower.

6. Sales

Sales include related services, and Taxes.

7. Government Grants & Subsidies

a) The government grants received are accounted in the year of receipt.

b) Interest subsidy on term loans under TUF scheme is provided on accrual basis only to the extent of certainty of receipt & filling of claim in respect thereof.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) The contribution of the Company towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue.

b) The Employee''s Gratuity and Leave Encashment are the company''s defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on Actuarial Valuation using the Projected Unit Credit Method.

10. Contingent Liabilities

Contingent liabilities are not provided for and are disclosed by way of notes.

11. Provisions for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable and virtual certainty that the assets will be realised in future.

12. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, construction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

13. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

14. Lease Rentals :

Lease Rentals for assets taken on operating lease are recognized as on expenses in Profit and Loss Account over the lease term on accrual basis.

Mar 31, 2013

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principles and the provision of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

c) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period .The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

a) Fixed assets stated at cost of acquisition or construction or less accumulated depreciation. All costs, including financial cost till commencements of commercial production, net charges on Foreign Exchange Contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalized.

b) Depreciation on fixed assets provided on straight-line method at the rates prescribed by Schedule XIV of the CompaniesAct, 1956.

c) Leasehold Improvementsarewrittenoffovertheperiodoflease.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the

time of the transaction. Outstanding balances are valued at the rate prevailing on the Balance Sheet date.

4. Investments

The Investments are stated at cost. Provision for diminution in the value of long-term investments is made only

if such a decline is other than temporary in the opinion of the management.

5. Inventories

The inventories are valued as follows:

a) Raw materials, Stores, Spares and Stock in transit are valued at cost.

b) Stock in process is valued at cost.

c) Finished goods are valued at cost or market value whichever is lower.

6. Sales

Sales include related services, and Taxes.

7. Government Grants & Subsidies

a) The government grants received are accounted in the year of receipt.

b) Interest subsidy on term loans under TUF scheme is provided on accrual basis only to the extent of certainty of receipt & filling of claim in respect thereof.

8. Customs Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home Consumption.

9. Employees Retirement and other benefits

a) The contribution of the Company towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue.

b) The Employee''s Gratuity and Leave Encashment are the company''s defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on Actuarial Valuation using the Projected Unit Credit Method.

10. Contingent Liabilities

Contingent liabilities are not provided for and are disclosed by way of notes.

11. Provisions for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable and virtual certainty that the assets will be realised in future.

12. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, construction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

13. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

14. Lease Rentals:

Lease Rentals for assets taken on operating lease are recognized as on expenses in Profit and Loss Account over the lease term on accrual basis.

Mar 31, 2012

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principles and the provision of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

c) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period .The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

a) Fixed assets stated at cost of acquisition or construction or less accumulated depreciation. All costs, including financial cost till commencements of commercial production, net charges on Foreign Exchange Contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalized.

b) Depreciation on fixed assets provided on straight-line method at the rates prescribed by Schedule XIV of the Companies Act, 1956.

C) Leasehold Improvements are written off over the period of lease.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Outstanding balances are valued at the rate prevailing on the Balance Sheet date.

4. Investments

The Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

5. Inventories

The inventories are valued as follows:

a) Raw materials, Stores, Spares and Stock in transit are valued at cost.

b) Stock in process is valued at cost.

c) Finished goods are valued at cost or market value whichever is lower.

6. Sales

Sales include related services, and Taxes. The company has changed the method of accounting Sales by excluding the value of interdivision Sales in the current year. The above change has no effect in overall profit / loss of the year.

7. Government Grants & Subsidies

a) The government grants received are accounted in the year of receipt.

b) Interest subsidy on term loans under TUF scheme is provided on accrual basis only to the extent of certainty of receipt & filling of claim in respect thereof.

8. Customs

Custom Duty is accounted for as and when paid on the clearance of the goods for home consumption.

9. Employees Retirement and other benefits

a) The contribution of the Company towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue.

b) The Employee's Gratuity and Leave Encashment are the company's defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on Actuarial Valuation using the Projected Unit Credit Method.

10. Contingent Liabilities

Contingent liabilities are not provided for and are disclosed by way of notes.

11. Inter Divisional Transfers

Inter divisional transfers of goods and services for internal use of captive consumption in plant located at different places/states were erstwhile upto FY 2010-11 shown as contra items in the Profit and Loss Account as interdivision Sales and Purchases. The company has changed the method of accounting Sales revenue from operations & consumption of raw material by excluding the value of interdivision Sales/purchases in the current year. The above change has no effect in overall profit /loss of the year

12. Provisions for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable and virtual certainty that the assets will be realized in future.

13. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, constriction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

14. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

15. Lease Rentals :

Lease Rentals for assets taken on operating lease are recognized as on expenses in Profit and Loss Account over the lease term on accrual basis.

Mar 31, 2010

1. Basis of preparation of Financial Statements

a) The financial statements have been prepared under historical cost convention, in accordance with the generally accepted accounting principles and the provision of the Companies Act, 1956 as adopted consistently by the Company.

b) Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

c) The preparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period The Difference between the actual and estimate are recognized in the period in which results are known/materialized.

2. Fixed Assets and Depreciation

a) Fixed assets stated at cost of acquisition or construction or less accumulated depreciation. All costs, including financial cost till commencements of commercial production, net charges on Foreign Exchange Contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalized.

b) Depreciation on fixed assets provided on straight-line method at the rates prescribed by Schedule XIV of the Companies Act, 1956.

3. Foreign Exchange Transaction

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Outstanding balances are valued at the rate prevailing on the Balance Sheet date.

4. Investments

The Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

5. Inventories

The inventories are valued as follows:

a) Raw materials, Stores, Spares and Stock in transit are valued at cost.

b) Stock in process is valued at cost.

c) Finished goods are valued at cost or market value whichever is lower.

6. Sales

Sales include Inter-division transfers, related services, and Taxes.

7. Government Grants & Subsidies

a) The government grants received are accounted in the year of receipt.

b) Interest subsidy on term loans under TUF scheme is provided on accrual basis only to the extent of certainty of receipt & filling of claim in respect thereof.

8. Customs and Excise Duty

Custom Duty is accounted for as and when paid on the clearance of the goods for home consumption.

9. Employees Retirement and other benefits

a) The contribution of the Company towards Provident Fund and Employee State Insurance, which are, defined contributions plans are charged to revenue.

b) The Employees Gratuity and Leave Encashment are the companys defined benefit plan. The present value of the obligation under such defined benefit plan is determined based on Acturial Valuation using the Projected Unit Credit Method.

10. Contingent Liabilities

Contingent liabilities are not provided for and are disclosed by way of notes.

11. Inter Divisional Transfers

Inter divisional transfers of goods and services for internal use of captive consumption in plant located at different places/states are shown as contra items in the Profit and Loss Account to reflect the true economical value of the production inter-se the divisions. Any unrealized profit on unsold stocks is ignored while valuing inventories. This accounting treatment has no impact on the profit of the company.

12. Provisions for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognized and carried forward only to the extent that there is a reasonable and virtual certainty that the assets will be realised in future.

13. Borrowing Cost

Borrowing cost incurred in relation to the acquisition, constriction of assets are capitalized as the part of cost of such assets up to date which such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

14. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

15. Lease Rentals:

Lease Rentals for assets taken on operating lease are recognized as on expenses in Profit and Loss Account over the lease term on accrual basis.

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