Accounting Policies of Schablona India Ltd. Company

Mar 31, 2015

A) Method of Accounting

These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

The financial statements are prepared on accrual basis under the historical cost convention, except for certain Fixed Assets which are carried at revalued amounts. The financial statements are presented in Indian rupees rounded off to the nearest rupees in Lacs.

b) Use of Estimates

The preparation of financial statements are in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period.

c) Fixed Assets & Depreciation

i) Fixed assets are accounted for at cost of acquisition inclusive of freight, duties, taxes, erection, installation and other incidentals related to acquisitions and installation but exclusive of Excise Modvat recoverable on purchase of Capital Goods.

ii) Cost of fixed assets acquired from outside India is converted into Indian rupees at the exchange rates prevailing on the date of disbursements.

iii) Fixed assets are stated at cost less accumulated depreciation.

iv) However, Fixed Assets relating to "Transfers Division" have been stated at the revalued cost as on 31st August 2003; pursuant to order dt. 14-12-2004 of Hon'ble Calcutta High Court, under the Capital Reduction Scheme approved by them as per provisions of Section 100(1)(b) of the Companies Act, 1956.

v) Depreciation on Fixed Assets has been provided on a straight line method, considering the estimated useful life as specified in Schedule II to the Companies Act, 2013 as notified by the Department of Company Affairs vide notification no. GSR. 237(E) dated 31.03.2014. Impaired assets are amortized over the estimated balance useful life.

vi) On assets sold/discarded during the year, depreciation is provided up to the date of sale/discarding of such assets.

vii) On the assets acquired during the year, depreciation is calculated on pro-rata basis from the date of acquisition/ installation of the assets except the assets costing upto Rs. 5000/- each which are fully depreciated in the year of purchase.

d) Inventories

i) Raw material, Stores and Spare parts, Tools & Implements and Packing material are valued at average weighted cost.

ii) Stock of Work in process is valued at cost of Raw Material.

iii) Finished stocks are valued at lower of cost or net realizable value. Cost includes raw material cost and appropriate share of manufacturing expenses and other expenses directly attributable to production and are inclusive of depreciation on plant and machinery and factory building and excise duty paid/payable thereon.

iv) Traded goods are valued at lower of cost and net realisable value by adopting FIFO method. Cost includes purchase price and other associated cost directly incurred in bringing the inventory to its present location.

e) Foreign Exchange Transaction

Transaction in foreign currency is recorded in Indian rupees using the rates of exchange prevailing on the date of transaction. At each balance sheet date, recorded monetary balances are reported in Indian rupees at rates of exchange prevailing at the balance sheet date. All realized or unrealized exchange adjustment, gains and losses are dealt with in the Statement of Profit and Loss.

f) Excise & Customs Duty

Excise duty is accounted on the basis of both payments made in respect of goods cleared and also provision made for finished goods lying in bonded warehouse.

g) CENVAT Credit

The CENVAT credit available on purchase of raw material, other eligible inputs and capital goods is adjusted against excise duty payable on clearance of goods produced. The un-availed CENVAT credit is shown under the head "Short Term Loans and Advances".

h) Research & Development Expenditure

Revenue expenditure is charged to Statement of Profit and Loss and capital expenditure is added to the cost of fixed assets in the year in which it is incurred.

i) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue and share split, if any. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

j) Taxes on Income

Provision for tax for the year comprises estimated current income tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is calculated in accordance with the relevant domestic tax laws. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will available against which such deferred tax assets can be realized.

k) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belong. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that asset may be impaired.

l) Revenue Recognition

i) Sales represent invoiced value of goods, net of sales return and trade discount but inclusive of Excise Duty, wherever applicable.

ii) Domestic Sale of goods is recognized at the point of dispatch of material to customers. Export Sales are accounted for on the basis of Bill of Lading.

iii) Profit/Loss on sale of fixed assets are recognized in the year of sale.

iv) Interest is accounted on accrual basis.

m) Borrowing Cost

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized up to the date of its commissioning as part of the cost of such assets. All other borrowing costs are charged to Statement of Profit and Loss.

n) Gratuity and Other Retirement Benefits

i) Retirement benefits in the form of Provident Fund are treated as a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

ii) Gratuity liability is a defined obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.

iii) Provision for Leave encashment is made on the basis of estimation made by actuarial.

iv) Other short term compensated absences are provided for based on past experience of leave availed.

o) Provisions and Contingent Liabilities

A provision is recognized if material when the Company has a present obligation as a result of past event and 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 based on technical valuation and past experience. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. No provision is recognized for liabilities whose future outcome cannot be ascertained with reasonable certainties. Such contingent liabilities are not recognized but are disclosed in the schedule of contingent liability on the basis of judgment of the management/independent expert. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate.

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Mar 31, 2014

A) Method of Accounting

The Financial Statements are prepared on historical cost basis and in accordance with generally accepted accounting principles in India, applicable Accounting Standards and the relevant presentational requirements of the Companies Act, 1956. The Company follows accrual system of accounting in preparation of accounts except where otherwise stated.

b) Use of Estimates

The preparation of financial statements are in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period.

c) Fixed Assets & Depreciation

i) Fixed assets are accounted for at cost of acquisition inclusive of freight, duties, taxes, erection, installation and other incidentals related to acquisitions and installation but exclusive of Excise Modvat recoverable on purchase of Capital Goods.

ii) Cost of fixed assets acquired from outside India is converted into Indian rupees at the exchange rates prevailing on the date of disbursements.

iii) Fixed assets are stated at cost less accumulated depreciation.

iv) However, Fixed Assets relating to "Transfers Division" have been stated at the revalued cost as on 31st August 2003; pursuant to the order dt. 14-12-2004 of Hon''ble Calcutta High Court, under the Capital Reduction Scheme approved by them as per provisions of Section 100(1)(b) of the Companies Act, 1956.

v) Depreciation on Fixed Assets has been provided at the rates in accordance with Schedule XIV to the Companies Act, 1956 as notified by the Department of Company Affairs vide notification no. GSR. 756(E) dated 16.12.1993 using Straight Line method. Double shift rates of depreciation are provided wherever applicable.

vi) On assets sold/discarded during the year, depreciation is provided up to the date of sale/discarding of such assets.

vii) On the assets acquired during the year, depreciation is calculated on pro-rata basis from the date of acquisition/ installation of the assets.

viii) 100% depreciation is charged on assets costing Rs. 5000/- or less.

d) Inventories

i) Raw material, Stores and Spare parts, Tools & Implements and Packing material are valued at average weighted cost.

ii) Stock of Work in process is valued at cost of Raw Material.

iii) Finished stocks are valued at lower of costs or net realizable value. Costs includes raw material cost and appropriate share of manufacturing expenses and other expenses directly attributable to production and are inclusive of depreciation on plant and machinery and factory building and excise duty paid/payable thereon.

iv) Traded goods are valued at lower of cost and net realisable value by adopting FIFO method. Cost includes purchase price and other associated cost directly incurred in bringing the inventory to its present location.

e) Foreign Exchange Transaction

Transaction in foreign currency is recorded in Indian rupees using the rates of exchange prevailing on the dates of transactions. At each balance sheet date, recorded monetary balances are reported in Indian rupees at rates of exchange prevailing at the balance sheet date. All realizes and unrealized exchange adjustment, gain and losses are dealt with in the Statement of Profit and Loss.

f) Excise & Customs Duty

Excise duty is accounted on the basis of both payments made in respect of goods cleared and also provision made for finished goods lying in bonded warehouse.

g) CENVAT Credit

The CENVAT credit available on purchase of raw material, other eligible inputs and capital goods is adjusted against excise duty payable on clearance of goods produced. The un-availed CENVAT credit is shown under the head "Short-Term Loans and Advances".

h) Research & Development Expenditure

Revenue expenditure is charged to Statement of Profit and Loss and capital expenditure is added to the cost of fixed assets in the year in which it is incurred.

i) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue and share split, if any. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

j) Taxes on Income

Provision for tax for the year comprises estimated current income tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is calculated in accordance with the relevant domestic tax laws. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

k) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belong. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that asset may be impaired.

l) Gratuity and Other Retirement Benefits

i) Retirement benefits in the form of Provident Fund are treated as a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

ii) Gratuity liability is a defined obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.

iii) Provision for Leave encashment has been made on the basis of estimation made by actuarial.

iv) Other short term compensated absences are provided for based on past experience of leave availed. m) Revenue Recognition

i) Sales represent invoiced value of goods, net of sales return and trade discount but inclusive of Excise Duty, wherever applicable.

ii) Domestic Sale of goods is recognized at the point of dispatch of material to customers. Export Sales are accounted for on the basis of Bill of Lading.

iii) Profit/Loss on sale of fixed assets are recognized in the year of sale.

iv) Interest is accounted on accrual basis.

n) Borrowing Cost

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized upto the date of its commissioning as part of the cost of such assets. All other borrowing costs are charged to Statement of Profit and Loss.

o) Provisions and Contingent Liabilities

A provision is recognized if material when the Company has a present obligation as a result of past event and 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 based on technical valuation and past experience. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. No provision is recognized for liabilities whose future outcome cannot be ascertained with reasonable certainties.

Such contingent liabilities are not recognized but are disclosed in the schedule of contingent liability on the basis of judgment of the management/independent expert. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate.

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Mar 31, 2013

A) Method of Accounting

The Financial Statements are prepared on historical cost basis and in accordance with generally accepted accounting principles in India, applicable Accounting Standards and the relevant presentational requirements of the Companies Act, 1956. The Company follows accrual system of accounting in preparation of accounts except where otherwise stated.

b) Use of Estimates

The preparation of financial statements are in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period.

c) Fixed Assets & Depreciation

i) Fixed assets are accounted for at cost of acquisition inclusive of freight, duties, taxes, erection, installation and other incidentals related to acquisitions and installation but exclusive of Excise Modvat recoverable on purchase of Capital Goods.

ii) Cost of fixed assets acquired from outside India is converted into Indian rupees at the exchange rates prevailing on the date of disbursements.

iii) Fixed assets are stated at cost less accumulated depreciation.

iv) However, Fixed Assets relating to "Transfers Division" have been stated at the revalued cost as on 31st August 2003; pursuant to the order dt. 14-12-2004 of Hon''ble Calcutta High Court, under the Capital Reduction Scheme approved by them as per provisions of Section 100(1)(b) of the Companies Act, 1956.

v) Depreciation on Fixed Assets has been provided at the rates in accordance with Schedule XIV to the Companies Act, 1956 as notified by the Department of Company Affairs vide notification no. GSR. 756(E) dated 16.12.1993 using Straight Line method. Double shift rates of depreciation are provided wherever applicable.

vi) On assets sold/discarded during the year, depreciation is provided up to the date of sale/discarding of such assets.

vii) On the assets acquired during the year, depreciation is calculated on pro-rata basis from the date of acquisition/ installation of the assets.

viii) 100% depreciation is charged on assets costing Rs. 5000/- or less.

d) Inventories

i) Raw material, Stores and Spare parts, Tools & Implements and Packing material are valued at average weighted cost.

ii) Stock of Work in process is valued at cost of Raw Material.

iii) Finished stocks are valued at lower of costs or net realizable value. Costs includes raw material cost and appropriate share of manufacturing expenses and other expenses directly attributable to production and are inclusive of depreciation on plant and machinery and factory building and excise duty paid/payable thereon.

iv) Traded goods are valued at lower of cost and net realisable value by adopting FIFO method. Cost includes purchase price and other associated cost directly incurred in bringing the inventory to its present location.

e) Foreign Exchange Transaction

Transaction in foreign currency is recorded in Indian rupees using the rates of exchange prevailing on the dates of transactions. At each balance sheet date, recorded monetary balances are reported in Indian rupees at rates of exchange prevailing at the balance sheet date. All realizes and unrealized exchange adjustment, gain and losses are dealt with in the Statement of Profit and Loss.

f) Excise & Customs Duty

Excise duty is accounted on the basis of both payments made in respect of goods cleared and also provision made for finished goods lying in bonded warehouse.

g) CENVAT Credit

The CENVAT credit available on purchase of raw material, other eligible inputs and capital goods is adjusted against excise duty payable on clearance of goods produced. The un-availed CENVAT credit is shown under the head "Short-Term Loans and Advances".

h) Research & Development Expenditure

Revenue expenditure is charged to Statement of Profit and Loss and capital expenditure is added to the cost of fixed assets in the year in which it is incurred.

i) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue and share split, if any. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

j) Taxes on Income

Provision for tax for the year comprises estimated current income tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is calculated in accordance with the relevant domestic tax laws. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will available against which such deferred tax assets can be realized.

k) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belong. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that asset may be impaired.

l) Gratuity and Other Retirement Benefits

i) Retirement benefits in the form of Provident Fund is treated as a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

ii) Gratuity liability is a defined obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.

iii) Provision for Leave encashment has been made on the basis of estimation made by actuarial.

iv) Other short term compensated absences are provided for based on past experience of leave availed.

m) Revenue Recognition

i) Sales represent invoiced value of goods, net of sales return and trade discount but inclusive of Excise Duty, wherever applicable.

ii) Domestic Sale of goods is recognized at the point of dispatch of material to customers. Export Sales are accounted for on the basis of Bill of Lading.

iii) Profit/Loss on sale of fixed assets are recognized in the year of sale.

iv) Interest is accounted on accrual basis.

n) Borrowing Cost

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized upto the date of its commissioning as part of the cost of such assets. All other borrowing costs are charged to Statement of Profit and Loss.

o) Provisions and Contingent Liabilities

A provision is recognized if material when the Company has a present obligation as a result of past event and 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 based on technical valuation and past experience. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. No provision is recognized for liabilities whose future outcome cannot be ascertained with reasonable certainties. Such contingent liabilities are not recognized but are disclosed in the schedule of contingent liability on the basis of judgment of the management/independent expert. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate.

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Mar 31, 2012

A) Method of Accounting

The Financial Statements are prepared on historical cost basis and in accordance with generally accepted accounting principles in India, applicable Accounting Standards and the relevant presentational requirements of the Companies Act, 1956. The Company follows accrual system of accounting in preparation of accounts except where otherwise stated.

b) Use of Estimates

The preparation of financial statements are in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period.

c) Fixed Assets & Depreciation

i) Fixed assets are accounted for at cost of acquisition inclusive of freight, duties, taxes, erection, installation and other incidentals related to acquisitions and installation but exclusive of Excise Modvat recoverable on purchase of Capital Goods.

ii) Cost of fixed assets acquired from outside India is converted into Indian rupees at the exchange rates prevailing on the date of disbursements.

iii) Fixed assets are stated at cost less accumulated depreciation.

iv) However, Fixed Assets relating to "Transfers Division" have been stated at the revalued cost as on 31st August 2003; pursuant to the order dt. 14-12-2004 of Hon'ble Calcutta High Court, under the Capital Reduction Scheme approved by them as per provisions of Section 100(1)(b) of the Companies Act, 1956.

v) Depreciation on Fixed Assets has been provided at the rates in accordance with Schedule XIV to the Companies Act, 1956 as notified by the Department of Company Affairs vide notification no. GSR. 756(E) dated 16.12.1993 using Straight Line method. Double shift rates of depreciation are provided wherever applicable.

vi) On assets sold/discarded during the year, depreciation is provided up to the date of sale/discarding of such assets.

vii) On the assets acquired during the year, depreciation is calculated on pro-rata basis from the date of acquisition/installation of the assets.

viii) 100% depreciation is charged on assets costing Rs. 5000/- or less.

d) Inventories

i) Raw material, Stores and Spare parts, Tools & Implements and Packing material are valued at average weighted cost.

ii) Stock of Work in process is valued at cost of Raw Material.

iii) Finished stocks are valued at lower of costs or net realizable value. Costs includes raw material cost and appropriate share of manufacturing expenses and other expenses directly attributable to production and are inclusive of depreciation on plant and machinery and factory building and excise duty paid/payable thereon.

iv) Traded goods are valued at lower of cost and net realisable value by adopting FIFO method. Cost includes purchase price and other associated cost directly incurred in bringing the inventory to its present location.

e) Foreign Exchange Transaction

Transaction in foreign currency is recorded in Indian rupees using the rates of exchange prevailing on the dates of transactions. At each balance sheet date, recorded monetary balances are reported in Indian rupees at rates of exchange prevailing at the balance sheet date. All realizes and unrealized exchange adjustment, gain and losses are dealt with in the Statement of Profit and Loss.

f) Excise & Customs Duty

Excise duty is accounted on the basis of both payments made in respect of goods cleared and also provision made for finished goods lying in bonded warehouse.

g) CENVAT Credit

The CENVAT credit available on purchase of raw material, other eligible inputs and capital goods is adjusted against excise duty payable on clearance of goods produced. The un-availed CENVAT credit is shown under the head "Short-Term Loans and Advances".

h) Research & Development Expenditure

Revenue expenditure is charged to Statement of Profit and Loss and capital expenditure is added to the cost of fixed assets in the year in which it is incurred.

i) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue and share split, if any. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

j) Taxes on Income

Provision for tax for the year comprises estimated current income tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is calculated in accordance with the relevant domestic tax laws. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will available against which such deferred tax assets can be realized.

k) Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belong. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that asset may be impaired.

l) Gratuity and Other Retirement Benefits

i) Retirement benefits in the form of Provident Fund is treated as a defined contribution scheme and the contributions are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

ii) Gratuity liability is a defined obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.

iii) Leave encashment has been provided on basis of estimation made by actuarial.

iv) Other short term compensated absences are provided for based on past experience of leave availed.

m) Revenue Recognition

i) Sales represent invoiced value of goods, net of sales return and trade discount but inclusive of Excise Duty, wherever applicable.

ii) Domestic Sale of goods is recognized at the point of dispatch of material to customers. Export Sales are accounted on the basis of Bill of Lading.

iii) Profit/Loss on sale of fixed assets are recognized in the year of sale.

iv) Interest is accounted on accrual basis.

n) Borrowing Cost

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are charged to Statement of Profit and Loss.

o) Provisions and Contingent Liabilities

A provision is recognized if material when the Company has a present obligation as a result of past event and 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 based on technical valuation and past experience. Provision are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. No provision is recognized for liabilities whose future outcome cannot be ascertained with reasonable certainties. Such contingent liabilities are not recognized but are disclosed in the schedule of contingent liability on the basis of judgment of the management/independent expert. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate.

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Mar 31, 2010

A) Method of Accounting

The Financial Statements are prepared on historical cost basis and in accordance with generally accepted accounting principles. The Company follows accrual system of accounting in the preparation of accounts except where otherwise stated.

b) Fixed Assets & Depreciation

i) Fixed assets are stated at cost less accumulated depreciation.

ii) However, Fixed Assets relating to "Transfers Division" have been stated at the revalued cost as on 31st August, 2003; pursuant to the order dt. 14-12-2004 of Honble Calcutta High Court, under the Capital Reduction Scheme approved by them as per provisions of Section 100(1)(b) of the Companies Act, 1956.

iii) Depreciation on Fixed Assets has been provided at the rates in accordance with Schedule XIV of the Companies Act, 1956 as notified by the Department of Company Affairs vide notification no. GSR. 756(E) dated 16.12.1993 using Straight Line method. Double shift rates of depreciation are provided wherever applicable.

iv) 100% depreciation has been charged on assets costing Rs. 5000/- or less.

c) Inventories

Finished stocks and trading stocks are valued at lower of estimated cost or net realizable value. Stock in process is taken at cost. Raw material, Stores and Spare parts and Tools & implements are valued at cost. Cost of finished goods includes excise duty.

d) Foreign Exchange Transaction

All Monetary assets and liabilities related to foreign currency transaction have been translated into Indian Rupees at the appropriate year end exchange rates as per Revised Accounting Standard-11. The difference in transaction of monetary assets and liabilities and realised gains and losses on foreign exchange transactions, other than those relating to fixed assets are recognized in Profit and Loss Account.

e) Excise & Customs Duty

Excise duty has been accounted on the basis of both payments made in respect of goods cleared and also provision made for goods lying in bonded warehouse.

f) CENVAT Credit

The CENVAT credit available on purchase of raw material, other eligible inputs and capital goods is adjusted against excise duty payable on clearance of goods produced. The un-availed CENVAT credit is shown under the head “Loans & Advances”.

g) Research & Development Expenditure

Revenue expenditure is charged to Profit & Loss account and capital expenditure is added to the cost of fixed assets in the year in which it is incurred.

h) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue and share split. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

i) Taxes on Income

Provision for tax for the year comprises estimated current income tax determined to be payable in respect of taxable income and deferred tax being the tax effect of timing differences representing the difference between taxable and accounting income that originate in one period and are capable of

reversal in one or more subsequent periods and is calculated in accordance with the relevant domestic tax laws. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will available against which such deferred tax assets can be realized.

j) Impairment of Assets

The Company on an annual basis makes an assessment of any indicator that may lead to impairment of assets. If any such indication exists, the Company estimates the recoverable amount of the assets. If such recoverable amount is less than the carrying amount, then the carrying amount is reduced to its recoverable amount by treating the difference between them as impairment loss and is charged to profit & loss account.

k) Gratuity and Other Retirement Benefits

i) Retirement benefit in the form of Provident Fund are treated as a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due.

ii) Gratuity liability is a defined obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.

iii) Leave encashment has been provided on basis of estimation made by actuarial.

iv) Other short term compensated absences are provided for based on past experience of leave availed.

l) Sales

Sales represent invoiced value of goods, net of sales return and trade discount but inclusive of Excise duty, wherever applicable.

m) Provisions and Contingent Liabilities

A provision is recognized if material when the Company has a present obligation as a result of past event and 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 based on technical valuation and past experience. Provisions are not discounted to its present value and are determined based on management estimate required to settle the obligation at the balance sheet date. No provision is recognized for liabilities whose future outcome cannot be ascertained with reasonable certainties. Such contingent liabilities are not recognized but are disclosed in the schedule of contingent liability on the basis of judgment of the management/independent expert. These are reviewed at each balance sheet date and adjusted to reflect the current management estimate.