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Accounting Policies of Gokul Agro Resources Ltd. Company

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

3.1 Property, plant and equipment:

Property, plant and equipment are stated at original cost
net of tax / duty credit availed, less accumulated
depreciation and accumulated impairment losses, if any.
Cost includes purchase price and all other attributable cost
of bringing the asset to working condition for intended
use. Finance costs relating to borrowing funds attributable
to acquisition of fixed assets are also included in the cost,
for the period till such asset is put to use.

When significant parts of property, plant and equipment
are required to be replaced at intervals, the Company
derecognizes the replaced part, and recognizes the new
part with its own associated useful life and it is depreciated
accordingly. Where components of an asset are significant
in value in relation to the total value of the asset as a whole,
and they have substantially different economic lives as
compared to principal item of the asset, they are
recognized separately as independent items and are
depreciated over their estimated economic useful lives.

All other repair and maintenance costs are recognized in
the statement of profit and loss as incurred unless they
meet the recognition criteria for capitalization under
Property, Plantand Equipment

Tangible Fixed Assets:

Depreciation on tangible assets is provided on the
Straight-Line Method (SLM) over the useful life of the
assets as prescribed under Schedule II to the Companies
Act, 2013. In respect of the fixed assets purchased during
the year, depreciation is provided on pro rata basis from
the date on which such asset is ready to be put to use.

Intangible Assets:

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortization and accumulatedimpairment losses (if any).

An item of intangible asset initially recognized is
derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or
loss arising on de-recognition of the asset [calculated as
the difference between the net disposal proceeds and the
carrying amount of the asset] is included in the income
statement when the asset is derecognized. Intangible
fixed assets are amortized on straight line basis over their
estimated usefuleconomiclife.

Capital Work-in-progress

Capital work- in- progress represents directly attributable
costs of construction to be capitalized. All other expenses
including interest incurred during construction period are

capitalized as a part of the construction cost to the extent
to which these expenditures are attributable to the
construction as per Ind AS-23 "Borrowing Costs". Interest
income earned on temporary investmentof funds brought
in for the project during construction period are set off
from the interest expense accounted for as expenditure
during the construction period.

Rightof Useofasset

The right-of-use assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over the lease
term of the underlying asset.

Right-of-use assets are evaluated for recoverability
whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable. For the
purpose of impairment testing, the recoverable amount
(i.e. the higher of the fair value less cost to sell and the
value-in-use) is determined on an individual asset basis
unless the asset does not generate cash flows that are
largely independent of those from other assets. In such
cases, the recoverable amount is determined for the Cash
Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at
the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in
the lease or, if not readily determinable, using the
incremental borrowing rates in the country of domicile of
the leases. Lease liabilities are remeasured with a
corresponding adjustment to the related rightof use asset
if the Group changes its assessment if whether it will
exercise an extension or a termination option.

Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments have
been classified as financing cash flows.

3.2 Impairment of non-Financialassets

The carrying amounts of assets are reviewed at each
balance sheet date if there is any indication of impairment
based on internal/external factors. An impairment loss is
recognized wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount
is the greater of the asset''s net selling price and value in
use. In assessing value in use, the Company measures it on
the basis of discounted cash flows of next five years''
projections estimated based on current prices.
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. After impairment,

depreciation is provided on the revised carrying amountof
the asset over its remaining useful life.

3.3 Foreign Currency Transactions

The Company''s financial statements are presented in INR,
which isalso the Company''s functional currency.

Initial Recognition

Foreign currency transactions are recorded in the
reporting currency, by applying to the foreign currency
amount, the exchange rate between the reporting
currency and the foreign currency at the date of
transaction.

Conversion

Foreign currency monetary items are reported using the
closing rate. Non-monetary items, which are measured in
terms of historical costs denominated in foreign currency,
are reported using the exchange rate at the date of the
transaction. Non-monetary items, which are measured at
fair value or other similar valuation denominated in a
foreign currency, are translated using the exchange rate at
the date when such value was determined.

Exchange Differences

Exchange differences arising on the settlement of
monetary items or on reporting Company''s monetary
items at rates different from those at which they were
initially recorded during the year, or reported in previous
financial statements including receivables and payables
which are likely to be settled in foreseeable future, are
recognized as income or as expenses in the year in which
they arise. All other exchange differences are recognized
as income or as expenses in the period inwhich they arise.

Transactions covered under forward contracts are
accounted for at the contracted rate. All export proceeds
have been accounted for at a fixed rate of exchange at the
time of raising invoices. Foreign exchange fluctuations as a
result of the export sales have been adjusted in the
statement of profit and loss account and export proceeds
not realized at the balance sheet date are restated at the
rate prevailing as at the balance sheet date.

3.4 Revenue recognition

Revenue is recognized to the extent it is probable that the
economic benefits will flow to the Company and the
revenuecan be reliably measured. Specifically,

(i) Sale of goods is recognized on transfer of significant
risk and rewards of ownership which is generally on
shipment and dispatch to customers.

(ii) Revenue/Loss from bargain settlement of goods is
recognized at thetime of settlement of transactions.

(iii) Export benefits/Value added tax benefits are
recognized as Income when the right to receive credit
as per the terms of the scheme is established and
there isnosignificantuncertaintyregarding the claim.

(iv) For all debt instruments measured either at

amortized cost or at fair value through other
comprehensive income [OCI], interest income is
recorded using the effective interest rate [EIR]. EIR is
the rate that exactly discounts the estimated future
cash payments or receipts over the expected life of
the financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the
financial asset or to the amortized cost of a financial
liability. 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.

(v) Interest income is recognized on time proportion
basis taking into account the amount outstanding and
rate applicable.

(vi) Share of profit and loss from partnership firm is
recognized when company''s right/obligation to
receive/pay is established.

(vii) Dividend income from investments is recognized
when the Company''s right to receive payment is
established which is generally when shareholders
approve thedividend.

3.5 Financial Instruments

A financial instrument is any contract that gives rise to a

financial asset of one entity and a financial liability or

equityinstrumentofanotherentity.

A. Financial Assets

a. Initialrecognitionandmeasurement:

All financial assets are recognized initially at fair
value plus, in the case of financial assets not
recorded at fair value through profit or loss,
transaction costs that are attributable to the
acquisition of the financial asset. Purchases or
sales of financial assets that require delivery of
assets within a time frame established by
regulation or convention in the market place
[regular way trades] are recognized on the
settlement date, trade date, i.e., the date that the
Company settles commits to purchase or sell the
asset.

b. Subsequent measurement:

For purposes of subsequent measurement,
financial assets are classified in four categories

i. Debtinstrumentsatamortized cost:

A ''debt instrument'' is measured at the
amortized costif both the following conditions
are met:

- The asset is held with a basis objective of
collecting contractual cash flows

- Contractual terms of the asset give rise on

specified dates to cash flows that are
"solely payments of principal and interest"
[SPPI] on the principalamountoutstanding.

After initial measurement, such financial assets
are subsequently measured at amortized cost
using the effective interest rate [EIR] method.
Amortized cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortization is included in finance
income in the Statement of Profit and Loss. The
losses arising from impairment are recognized in
the profit or loss. This category generally applies
to trade and other receivables.

ii. Debt instruments at fair value through other
comprehensive income [FVTOCI]:

A''debt instrument'' is classified as at the FVTOCI if
both of the following criteria are met:

- The asset is held with objective of both - for
collecting contractual cash flows and selling
the financialassets

- The asset''s contractual cash flows represent
SPPI.

Debt instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements
are recognized in the other comprehensive
income [OCI]. However, the Company recognizes
interest income, impairment losses & reversals
and foreign exchange gain or loss in the
Statementof Profitand Loss. On derecognition of
the asset, cumulative gain or loss previously
recognized in OCI is reclassified from the equity to
Statement of Profit and Loss. Interest earned
whilst holding FVTOCI debt instrument is
reported as interest income using the EIR method.

iii. Debt instruments, derivatives and equity
instruments at fair value through profit or loss
[FVTPL]:

FVTPL is a residual category for debt instruments.
Any debt instrument, which does not meet the
criteria for categorization as at amortized cost or
as FVTOCI, is classified as at FVTPL. Debt
instruments included within the FVTPL category
are measured at fair value with all changes
recognized in the P&L.

iv. Equity instruments measured at fair value through
other comprehensive income [FVTOCI]:

All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which
are held for trading and contingent consideration
recognized by an acquirer in a business
combination to which Ind AS103 applies are
classified as at FVTPL. For all other equity

instruments, the Company may make an
irrevocable election to present in other
comprehensive income subsequent changes in
the fair value. The Company has made such
election on an instrument by instrument basis.
The classification is made on initial recognition
and is irrevocable. If the Company decides to
classify an equity instrument as at FVTOCI, then all
fair value changes on the instrument, excluding
dividends, are recognized in the OCI. There is no
recycling of the amounts from OCI to Statement
of Profit and Loss, even on sale of investment.
However, the Company may transfer the
cumulative gain or loss within equity. Equity
instruments included within the FVTPL category
are measured at fair value with all changes
recognized in the Statement of Profitand Loss.

c. Derecognition:

A financial asset is primarily derecognized when:

i. The Company has transferred its rights to
receive cash flows from the asset or has
assumed an obligation to pay the received
cash flows in full without material delay to a
third party under a ''pass-through''
arrangement and either [a] the Company has
transferred substantially all the risks and
rewards of the asset, or [b] the Company has
neither transferred nor retained substantially
all the risks and rewards of the asset, but has
transferred control of the asset.

ii. The Company has transferred its rights to
receive cash flows from an asset or has
entered into a pass-through arrangement, it
evaluates if and to what extent it has retained
the risks and rewardsof ownership.

B. Financialliabilities:

a. Initial recognition and measurement:

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at
fair value and, in the case of loans and borrowings
and payables, net of directly attributable
transaction costs.

b. Subsequent measurement:

The measurement of financial liabilities depends
on their classification, as described below:

i. Financial liabilities at fair value through profit
or loss:

Financial liabilities at fair value through profit
or loss include financial liabilities held for
trading and financial liabilities designated

upon initial recognition as at fair value through
profit or loss. This category also includes
derivative financial instruments entered into
by the Company that are not designated as
hedging instruments in hedge relationships as
defined by Ind AS 109. Separated embedded
derivatives are also classified as held for
trading unless they are designated as effective
hedging instruments. Gains or losses on
liabilities held for trading are recognized in the
profit or loss.

Financial liabilities designated upon initial
recognition at fair value through profit or loss
are designated as such at the initial date of
recognition, and only if the criteria in Ind AS
109 are satisfied for liabilities designated as
FVTPL, fair value gains/ losses attributable to
changes in own credit risk are recognized in
OCI. These gains/ losses are not subsequently
transferred to P&L. However, the Company
may transfer the cumulative gain or loss within
equity. All other changes in fair value of such
liability are recognized in the statement of
profit or loss. The Company has not designated
any financial liability as at fair value through
profit and loss.

ii. Loans and borrowings:

After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortized cost using the EIR method. Gains
and losses are recognized in profit or loss
when the liabilities are derecognized as well as
through the EIR amortization process.
Amortized cost is calculated by taking into
account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization is
included as finance costs in the statement of
profit and loss.

iii. Financialguaranteecontracts:

Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder
fora loss it incurs because the specified debtor
fails to make a payment when due in
accordance with the terms of a debt
instrument. Financial guarantee contracts are
recognized initially as a liability at fair value,
adjusted for transaction costs that are directly
attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the
higher of the amount of loss allowance
determined as per impairment requirements
of Ind AS 109 and the amount recognized less
cumulative amortization.

c. 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 derecognition 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 or loss.

C. Reclassification of financial assets:

The Company determines classification of financial
assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial
assets which are equity instruments and financial
liabilities. For financial assets which are debt
instruments, a reclassification is made only if there is a
change in the business model for managing those
assets. Changes to the business model are expected
to be infrequent. If the Company reclassifies financial
assets, it applies the reclassification prospectively
from the reclassification date which is the first day of
the immediately next reporting period following the
change in business model. The Company does not
restate any previously recognized gains, losses
[including impairment gains or losses] or interest.

D. Offsetting of financialinstruments:

Financial assets and financial liabilities are offset and
the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle
the liabilities simultaneously.

3.6 Fair Value Measurement

The Company measures financial instruments at fair value
at each balance sheet date. Fair value is the price that
would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market
participants at the measurement date. The fair value
measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes
place either:

a. In the principal market for the asset or liability, or

b. In the absence of a principal market, in the most
advantageous market for the asset or liability

The principal or the most advantageous market must be
accessible by the Company. The Company uses valuation
techniques that are appropriate in the circumstances and
for which sufficient data are available to measure fair
value, maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurementasa whole:

Level 1 — Quoted [unadjusted] market prices in active
markets for identical assets or liabilities.

Level 2 —Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable.

Level 3 —Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.

3.7 Inventories

Inventories comprises of Raw material, finished goods
(including By-products), packing material, consumables,
stores and spares. Inventories are valued at the lower of
cost or net realizable value except Raw Material, packing
material, consumables, stores and spares, which is valued
at the cost. The cost is determined by weighted average
method. The net realizable value is the estimated selling
price in the ordinary course of business less the estimated
costs of completion and estimated costs necessary to
make thesale.

3.8 Retirement benefits

Retirement benefit costs for the year are determined on
the following basis:

(i) Company provides for Retirement Benefits in the

form of Gratuity. Such Benefits are provided for as at
Balance Sheet date, based on the valuation made by
independent actuaries. Company has taken Group
Gratuity Policy of LIC of India and Premium paid is
recognized as expenses when it is incurred. Actuarial
gains or loss in respect of Gratuity are charged to
Profit & Loss Account and OCI based on the actuary
valuation report.

(ii) Provident fund is accrued on monthly basis in

accordance with the terms of contract with the
employees and is deposited with the Statutory
Provident Fund. The Company''s contribution is
charged to profit and loss account.

(iii) Company also provides for Leave Encashment as at

Balance Sheet date, based on the valuation made by
independent actuaries.

Re-measurements, comprising of actuarial gains and
losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability
and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability), are
recognized immediately in the balance sheet with a
corresponding debit or credit to retained earnings through
other comprehensive income in the period in which they
occur. Re-measurements are not classified to the
statement of profit and loss in subsequent periods.

Net interest is calculated by applying the discount rate to
the netdefined benefit liability or asset

3.9 Taxes on Income

Tax expense comprises current and deferred tax. Current
income tax is measured at the amount expected to be paid
to the tax authorities in accordance with the Income Tax
Act, 1961 and tax laws prevailing in the respective tax
jurisdictions where the Company operates. Current tax
items are recognized in correlation to the underlying
transaction either in P&L, OCI or directly in equity.

Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable
temporary differences. Deferred tax assets are recognized
for all deductible temporary differences, the carry forward
of unused tax credits and any unused tax losses. Deferred
tax assets are recognized on the basis of reasonable
certainty that the company will be having sufficient future
taxable profits and based on the same the DTA has been
recognizedin the books.

The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be
utilized. Unrecognized deferred tax assets are re-assessed
at each reporting date and are recognized to the extent
that it has become probable that future taxable profits will
allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realized, or the liability is settled, based on tax rates [and
tax laws] that have been enacted or substantively enacted
atthereportingdate.

Deferred tax items are recognized in correlation to the
underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if
a legally enforceable right exists to set off current tax
assets against current tax liabilities.

3.10 Borrowing costs

Borrowing cost includes interest, amortization of ancillary
costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign
currency borrowings to the extent they are regarded as an
adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalized as part of the cost of
the respective asset. All other borrowing costs are
expensed in the period they occur.

Borrowing costs which are not specifically attributable to
the acquisition, construction or production of a qualifying

asset, the amount of borrowing costs eligible for
capitalization is determined by applying a weighted
average capitalization rate. The weighted average rate is
taken of the borrowing costs applicable to the outstanding
borrowings of the company during the period, other than
borrowings made specifically for the purpose of obtaining
a qualifying asset. The amount of borrowing costs
capitalized cannot exceed the amount of borrowing costs
incurred during thatperiod.

3.11 Earnings per equity share

Basic earnings per share is calculated by dividing the net
profit or loss from continuing operation and total profit,
both attributable to equity shareholders of the Company
by the weighted average number of equity shares
outstanding during the period.


Mar 31, 2021

Note:-1: CORPORATE INFORMATION

Gokul Agro Resources Limited (the company) is a public limited company and listed on Bombay Stock Exchange (BSE) & National Stock Exchange (NSE), domiciled in India and incorporated under the provisions of the Companies Act, 2013. The company is engaged in business of Manufacturing &Trading of Edible & Non-Edible Oil, Meals and other Agro Products.

Note: -2: BASIS OF PREPARATION

a) Basis of preparation

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (''the Act'') (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the relevant amendment rules issued thereafter.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

b) Functional and presentation currency

These financial statements are presented in Indian rupee, which is the Company''s functional currency, unless otherwise indicated.

c) Basis of measurement

The financial statements have been prepared on historical cost basis, except certain financial assets and liabilities which have been measured at fair value, defined benefits plan and contingent consideration. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

All 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 Act. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle to be of 12 months for the purposes of current/ non-current classification of assets and liabilities.

Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is treated as current when it is:

a. Expected to be realized or intended to be sold or consumed in normal operating cycle

b. Held primarilyforthe purposeoftrading

c. Expected to be realized within twelve months after the reporting period, or

d. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

a. It is expected to be settled in normal operating cycle

b. It is held primarilyforthe purposeoftrading

c. It is due to be settled within twelve months after the reporting period, or

d. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Note:-2A: USEOFESTIMATES

The preparation of financial statements requires the use of accounting estimates which, by definition, will often equal the actual results. Management also needs to exercise judgment in applying the group''s accounting policies. This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be adjusted due to estimates and assumptions turning out to be different from those originally assessed. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the financial statements.

Critical estimates and judgments

The areas involving critical estimates or judgments are:

a) Estimation of current tax expense and payable- Refer accounting policies - 3.9

b) Estimated useful life of property, plant & equipment and intangible assets-Refer accounting policies-3.1

c) Estimation of defined benefit obligation-Refer accounting policies-3.8

d) Estimation of fair values of contingent liabilities - Refer accounting policies-3.12

e) Recognition of revenue - Refer accounting policies - 3.4

f) Recognition of deferred tax assets for carried forward tax losses- Refer accounting policies -3.9

g) Impairment of financial assets-Refer accounting policies-3.2 &3.5

Estimates and judgments are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the group and that are believed to be reasonable under the circumstances.

Note:-3:. SIGNIFICANTACCOUNTING POLICIES3.1 Property, plant and equipment:

Property, plant and equipment are stated at original cost net of tax/ duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price and all other attributable cost of bringing the asset to working condition for intended use. Finance costs relating to borrowing funds attributable to acquisition of fixed assets are also included in the cost, for the period till such asset is put to use.

When significant parts of property, plant and equipment are required to be replaced at intervals, the Company derecognizes the replaced part, and recognizes the new part with its own associated useful life and it is depreciated accordingly. Where components of an asset are significant in value in relation to the total value of the asset as a whole, and they have substantially different economic lives as compared to principal item of the asset, they are recognized separately as independent items and are depreciated over their estimated economic useful lives.

All other repair and maintenance costs are recognized in the statement of profit and loss as incurred unless they meet the recognition criteria for capitalization under Property, Plant and Equipment

Tangible Fixed Assets:

Depreciation on tangible assets is provided on the Straight-Line Method (SLM) over the useful life of the assets as prescribed under Schedule II to the Companies Act, 2013. In respect of the fixed assets purchased during the year, depreciation is provided on pro rata basis from the date on which such asset is ready to be put to use. On transition to Ind AS as on April 1, 2016, the Company has elected to measure its Property, Plant and Equipment at cost as per Ind AS.

Intangible Assets:

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses (if any).

An item of intangible asset initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset [calculated as the difference between the net disposal proceeds and the carrying amount of the asset] is included in the income statement when the asset is derecognized. Intangible fixed assets are amortized on straight line basis over their estimated useful economic life.

Capital Work-in-progress

Capital work- in- progress represents directly attributable costs of construction to be capitalized. All other expenses including interest incurred during construction period are capitalized as a part of the construction cost to the extent to which these expenditures are attributable to the construction as per Ind AS-23 "Borrowing Costs". Interest income earned on temporary investment of funds brought in for the project during construction period are set off from the interest expense accounted for as expenditure during the construction period.

Right of Use of asset

With effect from 1st April, 2019, the company has adopted Ind AS 116 "Leases" with the modified retrospective approach. Accordingly the company has not re-stated its comparative financial results. This has resulted in reorganization of right-of-use asset and corresponding lease liability as a 1st April, 2019. Depreciation/Amortization of Asset had been made on the basis of balance no of years of right to use such asset.

3.2 Impairment of non-financial 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. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the Company measures it on the basis of discounted cash flows of next five years'' projections estimated based on current prices. 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. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

3.3 Foreign Currency Transactions

The Company''s financial statements are presented in INR, which is also the Company''s functional currency.

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are measured in terms of historical costs denominated in foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements including receivables and payables which are likely to be settled in foreseeable future, are recognized as income or as expenses in the year in which they arise. All other exchange differences are recognized as income or as expenses in the period in which they arise.

Transactions covered under forward contracts are accounted for at the contracted rate. All export proceeds have been accounted for at a fixed rate of exchange at the time of raising invoices. Foreign exchange fluctuations as a result of the export sales have been adjusted in the statement of profit and loss account and export proceeds not realized at the balance sheet date are restated at the rate prevailing as at the balance sheet date.

3.4 Revenue recognition

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

(I) Sale of goods is recognized on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers.

(ii) Revenue/Lossfrom bargain settlement of goods is recognized at the time of settlement of transactions.

(iii) Export benefits/Value added tax benefits are recognized as Income when the right to receive credit as per the terms of the scheme is established and there is no significant uncertainty regarding the claim.

(iv) For all debt instruments measured either at amortized cost or at fair value through other comprehensive income [OCI], interest income is recorded using the effective interest rate [EIR]. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. 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.

(v) Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

(vi) Share of profit and loss from partnership firm is recognized when company''s right/obligation to receive/pay is established.

(vii) Dividend income from investments is recognized when the Company''s right to receive payment is established which is generally when shareholders approve the dividend.

3.5 Financial Instruments

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

A. Financial Assets

a. Initial recognition and measurement:

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place [regular way trades] are recognized on the settlement date, trade date, i.e., the date that the Company settles commits to purchase or sell the asset.

b. Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in four categories:

i. Debt instruments at amortized cost:

A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:

- The asset is held with an objective of collecting contractual cash flows

- Contractual terms of the asset give rise on specified dates to cash flows that are "solely payments of principal and interest" [SPPI] on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest

rate [EIR] method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.

ii. Debt instruments at fair value through other comprehensive income [FVTOCI]:

A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

- The asset is held with objective of both-for collecting contractual cash flows and selling the financial assets

- The asset''s contractual cashflows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income [OCI]. However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

iii. Debt instruments, derivatives and equity instruments at fair value through profit or loss [FVTPL]:

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

iv. Equity instruments measured at fair value through other comprehensive income [FVTOCI]:

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company has made such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

c. Derecognition:

A financial asset is primarily derecognized when:

i. The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either [a] the Company has transferred substantially all the risks and rewards of the asset, or [b] the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

ii. The Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.

B. Financial liabilities:

a. Initial recognition and measurement:

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

b. Subsequent measurement:

The measurement of financial liabilities depends on their classification, as described below:

I. Financial liabilities at fair value through profit or loss:

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied for liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are

recognized in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss.

ii. Loans and borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

iii. Financial guarantee contracts:

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative amortization.

c. 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 derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement ofprofitorloss.

C. Reclassification of financial assets:

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses [including impairment gains or losses] or interest.

D. Offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

3.6 Fair Value Measurement

The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

a. In the principal market for the asset or liability, or

b. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted [unadjusted] market prices in active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 —Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

3.7 Inventories

Inventories are valued at the lower of cost or net realizable value except Raw Material, which is valued at the cost. The cost is determined by weighted average method. The net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.

3.8 Retirement benefits

Retirement benefit costs for the year are determined on the following basis:

(i) Company provides for Retirement Benefits in the form of Gratuity. Such Benefits are provided for as at Balance Sheet date, based on the valuation made by independent actuaries. Company has taken Group Gratuity Policy of LIC of India and Premium paid is

recognized as expenses when it is incurred. Actuarial gains or loss in respect of Gratuity are charged to Profit & Loss Account and OCI based ontheactuary valuation report.

(ii) Provident fund is accrued on monthly basis in accordance with the terms of contract with the employees and is deposited with the Statutory Provident Fund. The Company''s contribution is charged to profit and loss account.

(iii) Company also provides for Leave Encashment as at Balance Sheet date, based on the valuation made by independent actuaries

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they occur. Re-measurements are not classified to the statement of profit and loss in subsequent periods.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset

3.9 TaxesonIncome

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 and tax laws prevailing in the respective tax jurisdictions where the Company operates. Current tax items are recognized in correlation to the underlyingtransaction either in P&L, OCI or directly in equity.

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized on the basis of reasonable certainty that the company will be having sufficient future taxable profits and based on the same the DTA has been recognized in the books.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized, or the liability is settled, based on tax rates [and tax laws] that have been enacted or substantively enacted at the reporting date.

Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities.

The Company has decided to continue with the existing tax structure until the utilization of accumulated Minimum Alternate Tax (MAT) credit.

3.10 Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arisingfrom foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

Borrowing costs which are not specifically attributable to the acquisition, construction or production of a qualifying asset, the amount of borrowing costs eligible for capitalization is determined by applying a weighted average capitalization rate. The weighted average rate is taken of the borrowing costs applicable to the outstanding borrowings of the company during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs capitalized cannot exceed the amount of borrowing costs incurred during that period.

3.11 Earnings per equity share

Basic earnings per share is calculated by dividing the net profit or loss from continuing operation and total profit, both attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

3.12 Provisions, Contingent Liabilities and Contingent Assets:

Provision is recognized when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that the outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made.

A disclosure for contingent liability is made when there is a possible obligation that may, but probably will not require an outflow of resources. When there is a possible obligation ora present obligation in respect of which the likelihood of outflow of resources is remote, no provision/ disclosure is made. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent assets are not recognized in the financial statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, using a current pretax rate that reflects, when appropriate, the risks specific to the liability. Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are renewed at each balance sheet date.

3.13 Cash and Cash Equivalents

Cash and cash equivalent comprise cash on hand and demand deposits with banks which are short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

3.14 Exceptional items

Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expense is classified as an exceptional item and accordingly, disclosed in the notes accompanying to the financial statements.


Mar 31, 2018

Note: -1 : SIGNIFICANT ACCOUNTING POLICIES

1.1 Property, plant and equipment:

Property, plant and equipment are stated at original cost net of tax / duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includespurchase price and all other attributable cost of bringing the asset to working condition for intended use. Finance costs relating to borrowing funds attributable to acquisition of fixed assets are also included in the cost, for the period till such asset is put to use.

When significant parts of property, plant and equipment are required to be replaced at intervals, the Company derecognizes the replaced part, and recognizes the new part with its own associated useful life and it is depreciated accordingly. Where components of an asset are significant in value in relation to the total value of the asset as a whole, and they have substantially different economic lives as compared to principal item of the asset, they are recognized separately as independent items and are depreciated over their estimated economic useful lives.

All other repair and maintenance costs are recognized in the statement of profit and loss as incurred unless they meet the recognition criteria for capitalization under Property, Plant and Equipment

Tangible Fixed Assets:

Depreciation on tangible assets is provided on the Straight-Line Method (SLM) over the useful life of the assets as prescribed under Schedule II to the Companies Act, 2013. In respect of the fixed assets purchased during the year, depreciation is provided on pro rata basis from the date on which such asset is ready to be put to use. On transition to Ind AS as on April 1, 2016, the Company has elected to measure its Property, Plant and Equipment at cost as per Ind AS.

Intangible Assets:

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses (if any).

An item of intangible asset initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset [calculated as the difference between the net disposal proceeds and the carrying amount of the asset] is included in the income statement when the asset is derecognized. Intangible fixed assets are amortized on straight line basis over their estimated useful economic life.

Capital Work- in- progress

Capital work- in- progress represents directly attributable costs of construction to be capitalized. All other expenses including interest incurred during construction period are capitalized as a part of the construction cost to the extent to which these expenditures are attributable to the construction as per Ind AS-23 "Borrowing Costs". Interest income earned on temporary investment of funds brought in for the project during construction period are set off from the interest expense accounted for as expenditure during the construction period.

2.2 Impairment of non-financial 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. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the Company measures it on the basis of discounted cash flows of next five years'' projections estimated based on current prices. 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. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

3.3 Foreign Currency Transactions

The Company''s financial statements are presented in INR, which is also the Company''s functional currency.

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items, which are measured in terms of historical costs denominated in foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements including receivables and payables which are likely to be settled in foreseeable future, are recognized as income or as expenses in the year in which they arise. All other exchange differences are recognized as income or as expenses in the period in which they arise.

Transactions covered under forward contracts are accounted for at the contracted rate. All export proceeds have been accounted for at a fixed rate of exchange at the time of raising invoices. Foreign exchange fluctuations as a result of the export sales have been adjusted in the statement of profit and loss account and export proceeds not realized at the balance sheet date are restated at the rate prevailing as at the balance sheet date.

3.4 Revenue recognition

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

(i) Sale of goods is recognized on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers. Sale up to June 2017 is inclusive of excise duty but exclusive of VAT and after that due to introduction of GST, sale from 1st July, 2017 to 31st March, 2018 doesn''t include GST.

(ii) Revenue/Loss from bargain settlement of goods is recognized at the time of settlement of transactions.

(iii) Export benefits/Value added tax benefits are recognized as Income when the right to receive credit as per the terms of the scheme is established and there is no significant uncertainty regarding the claim.

(iv) For all debt instruments measured either at amortized cost or at fair value through other comprehensive income [OCI], interest income is recorded using the effective interest rate [EIR]. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. 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.

(v) Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

(vi) Share of profit and loss from partnership firm is recognized when company''s right/obligation to receive/pay is established.

(vii) Dividend income from investments is recognized when the Company''s right to receive payment is established which is generally when shareholders approve the dividend.

3.5 Financial Instruments

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

A. Financial Assets

a. Initial recognition and measurement:

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place [regular way trades] are recognized on the settlement date, trade date, i.e., the date that the Company settle commits to purchase or sell the asset.

b. Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in four categories:

i. Debt instruments at amortized cost:

A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:

- The asset is held with an objective of collecting contractual cash flows

- Contractual terms of the asset give rise on specified dates to cash flows that are "solely payments of principal and interest" [SPPI] on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate [EIR] method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.

ii. Debt instruments at fair value through other comprehensive income [FVTOCI]:

A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

- The asset is held with objective of both - for collecting contractual cash flows and selling the financial assets

- The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income [OCI]. However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

iii. Debt instruments, derivatives and equity instruments at fair value through profit or loss [FVTPL]:

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

iv. Equity instruments measured at fair value through other comprehensive income [FVTOCI]:

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company has made such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

c. Derecognition:

A financial asset is primarily derecognized when:

i. The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement™ and either [a] the Company has transferred substantially all the risks and rewards of the asset, or [b] the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

ii. The Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.

B. Financial liabilities:

a. Initial recognition and measurement:

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

b. Subsequent measurement:

The measurement of financial liabilities depends on their classification, as described below:

i. Financial liabilities at fair value through profit or loss:

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognized in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied for liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss.

ii. Loans and borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

iii. Financial guarantee contracts:

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative amortization.

c. 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 derecognition 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 or loss.

C. Reclassification of financial assets:

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognized gains, losses [including impairment gains or losses] or interest.

D. Offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

3.6 Fair Value Measurement

The Company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

a. In the principal market for the asset or liability, or

b. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 — Quoted [unadjusted] market prices in active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

3.7 Inventories

Inventories are valued at the lower of cost or net realizable value except Raw Material, which is valued at the cost. The cost is determined by weighted average method. The net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.

3.8 Retirement benefits

Retirement benefit costs for the year are determined on the following basis:

(i) Company provides for Retirement Benefits in the form of Gratuity. Such Benefits are provided for as at Balance Sheet date, based on the valuation made by independent actuaries. Company has taken Group Gratuity Policy of LIC of India and Premium paid is recognized as expenses when it is incurred. Actuarial gains or loss in respect of Gratuity are charged to Profit & Loss Account and OCI based on the actuary valuation report.

(ii) Provident fund is accrued on monthly basis in accordance with the terms of contract with the employees and is deposited with the Statutory Provident Fund. The Company''s contribution is charged to profit and loss account.

(iii) Company also provides for Leave Encashment as at Balance Sheet date, based on the valuation made by independent actuaries

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they occur. Re-measurements are not classified to the statement of profit and loss in subsequent periods.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset

3.9 Taxes on Income

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 and tax laws prevailing in the respective tax jurisdictions where the Company operates. Current tax items are recognized in correlation to the underlying transaction either in P&L, OCI or directly in equity.

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized on the basis of reasonable certainty that the company will be having sufficient future taxable profits and based on the same the DTA has been recognized in the books.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized, or the liability is settled, based on tax rates [and tax laws] that have been enacted or substantively enacted at the reporting date.

Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities.

3.10 Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

Borrowing costs which are not specifically attributable to the acquisition, construction or production of a qualifying asset, the amount of borrowing costs eligible for capitalization is determined by applying a weighted average capitalization rate. The weighted average rate is taken of the borrowing costs applicable to the outstanding borrowings of the company during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs capitalized cannot exceed the amount of borrowing costs incurred during that period.

3.11 Earnings per equity share

Basic earnings per share is calculated by dividing the net profit or loss from continuing operation and total profit, both attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

3.12 Provisions, Contingent Liabilities and Contingent Assets:

Provision is recognized when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that the outflow of resources will be required to settle the obligation and in respect of which reliable estimates can be made.

A disclosure for contingent liability is made when there is a possible obligation, that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision/ disclosure is made. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

Contingent assets are not recognized in the financial statements. Provisions and contingencies are reviewed at each balance sheet date and adjusted to reflect the correct management estimates.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are renewed at each balance sheet date.

3.13 Cash and Cash Equivalents

Cash and cash equivalent comprise cash on hand and demand deposits with banks which are short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

3.14 Exceptional items

Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company is such that its disclosure improves the understanding of the performance of the Company, such income or expense is classified as an exceptional item and accordingly, disclosed in the notes accompanying to the financial statements.


Mar 31, 2015

A Basis of preparation of financial statements

1 The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013 as adopted consistently by the company.

2 Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the company.

B Use of Estimates

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

C Revenue Reorganization

Sale of goods is recognized on transfer of significant risk and rewards of ownership which is generally on shipment and dispatch to customers. Sale is inclusive of excise duty but exclusive of VAT. Sales includes income/loss on bargain settlements. Revenue/Loss from bargain settlement of goods is recognized at the time of settlement of transactions. Export benefits/Value Added tax benefits are recognized as Income when the right to receive credit as per the terms of the scheme is established and there is no significant uncertainty regarding the claim. Other revenue/cost are recognized on accrual basis. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking in to account the amount outstanding and the rate applicable. Share of profit and loss from partnership firm is recognized when the company's right/obligation to receive/pay is established.

D Fixed Assets

1 Tangible Assets

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

2 Intangible Assets

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

E Depreciation on fixed assets

1 Tangible Assets

Depreciation on Fixed Assets is provided on Straight Lime Method basis and according to the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

2 Intangible Assets

Intangible assets consists of Computer Software's and Trademark are depreciated over a period of ten years.

F Employee Retirement Benefit :-

Company makes contributions in respect of provident fund to Government authorities and the liability is limited to the extent of contributions. The employees of the company are entitled to leave as per leave policy of the company.

G Lease Rent:-

Lease rentals are expenses with reference to lease terms and other considerations. H Taxation:-

Taxation expense comprises current tax and deferred tax charge or credit. Provision for income tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year. Advance tax and tax deducted at source are adjusted against provision for taxation and balance, if any, are shown in the balance sheet under respective heads.

I Deferred Taxation

Deferred tax resulting from timing differences between book and tax profit is accounted for under the liability method at the current rate of Income tax to the extent that the timing differences are expected to crystallize as deferred tax charge/ benefit in the profit and loss a/c and as deferred tax Assets/Liability in the Balance-Sheet.

J Borrowing Cost

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

K Related Party Transaction

Parties are considered to be related if at any time during the year; one party has the ability to control the other party or to exercise significant influence over the other party in making financial and / or operating decision.

L Earning Per Share (EPS)

The earning considered in ascertaining the company's EPS comprises the net profit for the period after tax attributed to equity shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

M Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as 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.

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