Accounting Policies of Addi Industries Ltd. Company

Mar 31, 2015

I. Basis of Accounting

The financial statements are prepared under the historical cost convention on an accrual basis and in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) The company has prepared these financial statements to comply in all material respects with accounting standards notified under the Companies (Accounting Standard) Rules, 2006 and other relevant provisions of the Companies Act, 1956 and guidelines issued by the Security Exchange Board of India as adopted consistently by the Company.

ii. Uses of Estimates

The financial statements are prepared using estimates and assumptions that effect the reported balances of the assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of balance sheet and the statement of profit and loss during the year. Contingencies are recorded when it is probable that a liability has been incurred and amount can be reasonably estimated. Actual results could differ from these estimates. The actual results are recognized in the year in which the results are known/materialised.

iii. Fixed Assets

- Fixed Assets are stated at cost, less accumulated depreciation.

- Leasehold Land is shown at Cost less amortisation.

iv. Method of Depreciation & Amortisation

a) Depredation is provided at the rates calculated on the basis of life(s) specified in the Schedule II of the Companies Act, 2013 by using the Straight Line Method.

b) Depredation on additions to Fixed Assets is calculated prorata from the date of such addition.

c) Assets costing less than 5,000/-has been depredated fully in the year of purchase.

d) Leasehold Improvements have been written off on prorata basis during the period of lease.

v. Inventories

Valuation of Inventories Method of Valuation

a) Raw Material At Lower of Cost or Net realisable value.*

The cost is determined on Weighted Average basis.

b) Finished Goods At Lower of Cost or Net realisable value.

c) Stock-in-Process At Cost

d) Stores & Spares At Cost

* Cost comprises expenditure incurred in the normal course of business in bringing such inventories to the present location and condition. Finished Goods and Work- in Progress includes cost of conversion.

vi. Foreign Currency Transactions

a) Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

b) Monetary Items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the statement of profit and loss.

vii. Employee Benefits

Expenses and Liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15

- Employees Benefits (Revised 2005).

a) Post Employment Benefit Plans

Payments to Defined Contribution Retirements Benefit Schemes are charged as an expense as they fall due.

For Defined Benefit Shemes: the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the statement of profit and loss for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

b) Short Term Employee Benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.

viii. Revenue Recognition

a) Export Sales are booked on the basis of date of Foreign Cargo Receipt.

b) Domestic sales are recognised (net of sales tax, sales returns and trade discount) at the point of despatch of goods.

c) Duty Drawbacks, DEPB and Other exports benefits are recognised in the Statement of Profit & Loss on accrual basis.

d) Interest income is recognized on accrual basis.

ix. Purchases

Purchases are booked at the time of receipt of material at Factory Gate.

x. Investments

a) Current Investments are stated at lower of cost and fair value.

b) Long Term Investments are stated at Cost unless there is a diminution of permanent nature, if any in the opinion of the management.

xi. Earnings Per Share

a) Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the year.

b) For calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of options outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

xii. Cash Flow Statement

Cash flow Statement is made as per the indirect method prescribed under Accounting Standard - 3" Cash Flow Statement notified under Companies (Accounting Standard) Rules, 2006.

xiii. Taxes on Income Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax

Deferred Tax resulting from timing difference between book and taxable profit is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred Tax assets subject to consider- ation of prudence, are recognized and carried forward 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.

xiv. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes, contingent Assets are neither recognized nor disclosed in the financial statements.

xv. Leases

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are charged to statement of profit & loss.

b) Lease transactions entered into on or after April 1,2001:

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classi- fied as finance leases. Such assets are capitalised at the inception of the lease at the lower of the value or the present value of minimum lease payments and a liability is created for an equivalent amount .Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the liability for each period.

Assets acquired under leases where a significant portion of all risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the statement of profit & loss on accrual basis.

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Mar 31, 2014

I. Basis of Accounting

The financial statements are prepared under the historical cost convention on an accrual basis and in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) The company has prepared these financial state- ments to comply in all material respects with accounting standards notified under the Companies (Accounting Stan- dard) Rules, 2006 and other relevant provisions of the Companies Act, 1956 and guidelines issued by the Security & Exchange Board of India as adopted consistently by the Company.

ii. Uses of Estimates

The financial statements are prepared using estimates and assumptions that effect the reported balances of the assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of balance sheet and the statement of profit and loss during the year. Contingencies are recorded when it is probable that a liability has been incurred and amount can be reasonably estimated. Actual results could differ from these estimates. The actual results are recognized in the year in which the results are known/materialised.

iii. Fixed Assets

* Fixed Assets are stated at cost, less accumulated depreciation.

* Leasehold Land is shown at Cost less amortisation.

iv. Method of Depreciation & Amortisation

a) Depreciation is provided at the rates specified in the Schedule XIV of the Companies Act,1956 by using the Straight Line Method.

b) Depreciation on additions to Fixed Assets is calculated prorata from the date of such addition.

c) Assets costing less than Rs. 5,000/- has been depreciated fully in the year of purchase.

d) Leasehold Improvements have been written off on prorata basis during the period of lease.

v. Inventories

Valuation of Inventories Method of Valuation

a) Raw Material At Lower of Cost or Net realisable value.*

*The cost is determined on Weighted Average basis.

b) Finished Goods At Lower of Cost or Net realisable value.

c) Stock-in-Process At Cost

d) Stores & Spares At Cost

* Cost comprises expenditure incurred in the normal course of business in bringing such inventories to the present location and condition. Finished Goods and Work- in Progress includes cost of conversion.

vi. Foreign Currency Transactions

a) Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

b) Monetary Items denominated in foreign currency at the year end and not covered by forward exchange contracts are trans-

lated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the statement of profit and loss.

vii. Employee Benefits

Expenses and Liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Stan- dard 15 - Employees Benefits (Revised 2005).

a) Post Employment Benefit Plans

Payments to Defined Contribution Retirements Benefit Schemes are charged as an expense as they fall due.

For Defined Benefit Shemes: the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the statment of profit and loss for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined ben- efit obligation as adjusted for unrecognized past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

b) Short Term Employee Benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services ren- dered by employees is recognized during the period when the employee renders the service.

viii. Revenue Recognition

a) Export Sales are booked on the basis of date of Foreign Cargo Receipt.

b) Domestic sales are recognised (net of sales tax, sales returns and trade discount) at the point of despatch of goods.

c) Duty Drawbacks, DEPB and Other exports benefits are recognised in the Statement of Profit & Loss on accrual basis.

d) Interest income is recognized on accrual basis.

ix. Purchases

Purchases are booked at the time of receipt of material at Factory Gate.

x. Investments

a) Current Investments are stated at lower of cost and fair value.

b) Long Term Investments are stated at Cost unless there is a diminution of permanent nature, if any in the opinion of the management.

xi. Earnings Per Share

a) Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity sharehold- ers by weighted average number of equity shares outstanding during the year.

b) For calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of options outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

xii. Cash Flow Statement

Cash flow Statement is made as per the indirect method prescribed under Accounting Standard - 3 " Cash Flow State- ment notified under Companies (Accounting Standard) Rules, 2006.

xiii. Taxes on Income Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax

Deferred Tax resulting from timing difference between book and taxable profit is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred Tax assets subject to consideration of prudence, are recognized and carried forward 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.

xiv. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liablilities are not recog- nized but are disclosed in the notes. contingent Assets are neither recognized nor disclosed in the financial statements.

xv. Leases

a) In respect of lease transactions entered into prior to April 1,2001, lease rentals of assets acquired are charged to statement of profit & loss.

b) Lease transactions entered into on or after April 1,2001:

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance leases.Such assets are capitalised at the inception of the lease at the lower of the value or the present value of minimum lease payments and a liability is created for an equivalent amount .Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the liability for each period.

Assets acquired under leases where a significant portion of all risks and rewards of ownership are retained by the lessor are classified as operating leases.Lease rentals are charged to the statement of profit & loss on accrual basis.

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Mar 31, 2013

I. Basis of Accounting

The financial statements are prepared under the historical cost convention on an accrual basis and in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) The company has prepared these financial statements to comply in all material respects with accounting standards notified under the Companies (Accounting Standard) Rules, 2006 and other relevant provisions of the Companies Act, 1956 and guidelines issued by the Securities & Exchange Board of India as adopted consistently by the Company.

ii. Uses of Estimates

The financial statements are prepared using estimates and assumptions that effect the reported balances of the assets .

and liabilities and disclosures relating to contingent assets and liabilities as at the date of balance sheet and the statement of profit and loss during the year. Contingencies are recorded when it is probable that a liability has been incurred and amount can be reasonably estimated. Actual results could differ from these estimates. The actual results are recognized in the year in which the results are known/materialized.

iii. Fixed Assets

- Fixed Assets are stated at cost, less accumulated depreciation.

- Leasehold Land is shown at Cost less amortization.

iv. Method of Depreciation & Amortization

a) Depreciation is provided at the rates specified in the Schedule XIV of the Companies Act, 1956 by using the Straight Line Method.

b) Depreciation on additions to Fixed Assets is calculated prorata from the date of such addition.

c) Assets costing less than Rs. 5,000/- has been depreciated fully in the year of purchase.

d) Leasehold Improvements have been written off on prorata basis during the period of lease.

v. Inventories

Valuation of Inventories Method of Valuation

a) Raw Material At Lower of Cost or Net realizable value.*

*The cost is determined on Weighted Average basis.

b) Finished Goods At Lower of Cost or Net realizable value.

c) Stock-in-Process At Cost

d) Stores & Spares At Cost

*Cost comprises expenditure incurred in the normal course of business in bringing such inventories to the present location and condition. Finished Goods and Work-in Progress includes cost of conversion.

vi. Foreign Currency Transactions

a) Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

b) Monetary Items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognized over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the statement of profit and loss.

vii. Employee Benefits

Expenses and Liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 - Employees Benefits (Revised 2005).

a) Post Employment Benefit Plans

Payments to Defined Contribution Retirements Benefit Schemes are charged as an expense as they fall due.

For Defined Benefit Shemes: the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the statement of profit and loss for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested.

The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, plus the present value of available refunds and reductions in future contributions to the scheme, b) Short Term Employee Benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service

viii. Revenue Recognition

a) Export Sales are booked on the basis of date of Foreign Cargo Receipt.

b) Domestic sales are recognized (net of sales tax, sales returns and trade discount) at the point of dispatch of goods.

c) Duty Drawbacks, DEPB and Other exports benefits are recognized in the Statement of Profit & Loss on accrual basis.

d) Interest income is recognized on accrual basis.

Ix. Purchases

Purchases are booked at the time of receipt of material at Factory Gate.

x. Investments

a) Current Investments are stated at lower of cost and fair value.

b) Long Term Investments are stated at Cost unless there is a diminution of permanent nature, if any in the opinion of the management.

xl. Earnings Per Share

a) Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the year.

b) For calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of options outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

xil. Cash Flow Statement

Cash flow Statement is made as per the indirect method prescribed under Accounting Standard - 3 " Cash Flow Statement notified under Companies (Accounting Standard) Rules, 2006.

xlll. Taxes on Income Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax

Deferred Tax resulting from timing difference between book and taxable profit is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred Tax assets subject to consideration of prudence, are recognized and carried forward 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.

xiv. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes, contingent Assets are neither recognized nor disclosed in the financial statements.

xv. Leases

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are charged to statement of profit & loss.

b) Lease transactions entered into on or after April 1, 2001:

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalized at the inception of the lease at the lower of the value or the present value of minimum lease payments and a liability is created for an equivalent amount .Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the liability for each period.

Assets acquired under leases where a significant portion of all risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the statement of profit & loss on accrual basis.

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Mar 31, 2010

1. Accounting Concepts :

The financial statements are prepared under the historical cost convention on an accrual basis and in accordance with the mandatory Accounting Standards and relevant presentational requirements of the Companies Act, 1956.

2. Uses of Estimates

The financial statements are prepared using estimates and assumptions that effect the reported balances of the assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of balance sheet and the profit and loss account during the year. Contingencies are recorded when it is probable that a liability has been incurred and amount can be reasonably estimated. Actual results could differ from these estimates. The actual results are recognized in the year in which the results are known/materialised.

3. Fixed Assets:

- Fixed Assets are stated at cost, less accumulated depreciation.

- Leasehold Land is shown at Cost less amortisation.

4. Method of Depreciation & Amortisation

a) Depreciation is provided at the rates specified in the Schedule XIV of the Companies Act,1956 by using the Straight Line Method.

b) Depreciation on additions to Fixed Assets is calculated prorata from the date of such addition.

c) Assets costing less than Rs. 5,000/- has been depreciated fully in the year of purchase.

d) Leasehold Improvements have been written off on prorata basis during the period of lease.

5. Valuation of Inventories Method of Valuation

a) Raw Material At Lower of Cost or Net realisable value.*

*The cost is determined on Weighted Average basis.

b) Finished Goods At Lower of Cost or Net realisable value.

c) Stock-in-Process At Cost.

d) Stores & Spares At Cost



* Cost comprises expenditure incurred in the normal course of business in bringing such inventories to the present location and condition. Finished Goods and Work- in Progress includes cost of conversion.

6. Foreign Currency Transactions

a) Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

b) Monetary Items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account.

7. Employee Benefits

Expenses and Liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 - Employees Benefits (Revised 2005).

(i) Post Employment Benefit Plans

Payments to Defined Contribution Retirements Benefit Schemes are charged as an expense as they fall due. For Defined Benefit Shemes: the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the profit and loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

(ii) Short Term Employee Benefits.

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service

8. Revenue Recognition

a) Export Sales are booked on the basis of date of Foreign Cargo Receipt.

b) Domestic sales are recognised (net of sales tax, sales returns and trade discount) at the point of despatch of goods.

c) Duty Drawbacks, DEPB and Other exports benefits are recognised in the Profit & Loss Account on accrual basis.

d) Interest income is recognized on accrual basis.

9. Purchases

Purchases are booked at the time of receipt of material at Factory Gate.

10. Investments

a) Current Investments are stated at lower of cost and fair value.

b) Long Term Investments are stated at Cost unless there is a diminution of permanent nature, if any in the opinion of the management.

11. Earnings Per Share

a) Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the year.

b) For calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of options outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

12. Cash Flow Statement

Cash flow Statement is made as per the indirect method prescribed under Accounting Standard - 3 " Cash Flow Statement notified under Companies ( Accounting Standard) Rules, 2006.

13. Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax

Deferred Tax resulting from timing difference between book and taxable profit is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred Tax assets subject to consideration of prudence, are recognized and carried forward 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 .

14. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liablilities are not recognized but are disclosed in the notes. contingent Assets are neither recognized nor disclosed in the financial statements.

15. Leases

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are charged to profit & loss account.

b) Lease transections entered into on or after April 1, 2001:

- Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance leases.Such assets are capitalised at the inception of the lease at the lower of the value or the present value of minimum lease payments and a liability is created for an equivalent amount .Each lease rental paid is allocated beteen the liability and the interest cost, so as to obtain a constant periodic rate of interest on the liability for each period.

- Assets acquired under leases where a significant portion of all risks and rewards of ownership are retained by the lessor are classified as operating leases.Lease rentals are charged to the profit & loss Account on accrual basis.

---

Mar 31, 2009

1. Accounting Concepts :

The financial statements are prepared under the historical cost convention on an accrual basis and in accordance with the mandatory Accounting Standards and relevant presentational requirements of the Companies Act, 1956.

2. Uses of Estimates

The financial statements are prepared using estimates and assumptions that effect the reported balances of the assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of balance sheet and the profit and loss account during the year. Contingencies are recorded when it is probable that a liability has been incurred and amount can be reasonably estimated. Actual results could differ from these estimates. The actual results are recognized in the year in which the results are known/materialised.

3. Fixed Assets:

- Fixed Assets are stated at cost , less accumulated depreciation.

- Leasehold Land is shown at Cost less amortisation.

4. Method of Depreciation & Amortisation

a) Depreciation is provided at the rates specified in the Schedule XIV of the Companies Act,1956 by using the Straight Line Method.

b) Depreciation on additions to Fixed Assets is calculated prorata from the date of such addition.

c) Assets costing less than Rs. 5,000/- has been depreciated fully in the year of purchase.

d) Leasehold Improvements have been written off on prorata basis during the period of lease.

5. Valuation of Inventories Method of Valuation

a) Raw Material At Lower of Cost or Net realisable value.*

*The cost is determined on Weighted Average basis.

b) Finished Goods At Lower of Cost or Net realisable value.

c) Stock-in-Process At Cost.

d) Stores & Spares At Cost

- Cost comprises expenditure incurred in the normal course of business in bringing such inventories to the present location and condition. Finished Goods and Work- in Progress includes cost of conversion.

6. Foreign Currency Transactions

a) Transactions denominated in Foreign Currencies are recorded at the exchange rate prevailing at the time of the transaction.

b) Monetary Items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling on the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account.

7. Employee Benefits

Expenses and Liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 - Employees Benefits (Revised 2005).

(i) Post Employment Benefit Plans

Payments to Defined Contribution Retirements Benefit Schemes are charged as an expense as they fall due.

For Defined Benefit Shemes: the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balane sheet date. Actuarial gains and losses are recognized in full in the profit and loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

(ii) Short Term Employee Benefits.

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service

8. Revenue Recognition

a) Export Sales are booked on the basis of date of Foreign Cargo Receipt.

b) Domestic sales are recognised (net of sales tax, sales returns and trade discount) at the point of despatch of goods.

c) Duty Drawbacks, DEPB and Other exports benefits are recognised in the Profit & Loss Account on accrual basis.

d) Interest income is recognized on accrual basis.

9. Purchases

Purchases are booked at the time of receipt of material at Factory Gate.

10. Investments

a) Current Investments are stated at lower of cost and fair value.

b) Long Term Investments are stated at Cost unless there is a diminution of permanent nature, if any in the opinion of the management.

11. Earnings Per Share

a) Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by weighted average number of equity shares outstanding during the year.

b) For calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of options outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

12. Cash Flow Statement

Cash flow Statement is made as per the indirect method prescribed under Accounting Standard - 3 “ Cash Flow Statement issued by the Institute of Chartered Accountants of India.

13. Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of Income Tax Act, 1961.

Deferred Tax:

Deferred Tax resulting from timing difference between book and taxable profit is accounted for using the tax rate and laws that have been enacted or substantively enacted as on the Balance Sheet Date. Deferred Tax assets subject to consideration of prudence, are recognized and carried forward 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.

14. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liablilities are not recognized but are disclosed in the notes. contingent Assets are neither recognized nor disclosed in the financial statements.

15. Leases

a) In respect of lease transactions entered into prior to April 1, 2001, lease rentals of assets acquired are charged to profit & loss account.

b) Lease transections entered into on or after April 1, 2001:

- Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance leases.Such assets are capitalised at the inception of the lease at the lower of the value or the present value of minimum lease payments and a liability is created for an equivalent amount .Each lease rental paid is allocated beteen the liability and the interest cost, so as to obtain a constant periodic rate of interest on the liability for each period.

- Assets acquired under leases where a significant portion of all risks and rewards of ownership are retained by the lessor are classified as operating leases.Lease rentals are charged to the profit & loss Account on accrual basis.