Accounting Policies of Mohota Industries Ltd. Company

Mar 31, 2018

1. Significant accounting policies

a. Property, plant and equipment

i. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting traded is countsand rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labor, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipments recognized in profit or loss.

ii. Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

iii. Depreciation

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method and is recognized in the statement of profit and loss.

The estimated useful lives of items of property, plant and equipment for the current and comparative periods are as follows:

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on internal assessment and consequent advice, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets.

Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which asset is ready for use (disposed off).

b. Intangible assets

i. Acquired intangible

Intangible assets comprise purchased technical know-how are initially measured at cost. Such intangible assets are subsequently measured at cost less accumulated amortization and any accumulated impairment losses.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

iii. Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straight-line method and is included in depreciation and amortisation in Statement of Profit and Loss.

Intangible assets are amortised over a period of 10 years for technical know-how and 3 years for others. Amortisation method, useful lives and residual values are reviewed at the end of each financial year and adjusted if appropriate.

c. Inventories

Inventories are valued at the lower of cost and net realizable value. Cost includes purchase price, duties, transport & handling costs and other costs directly attributable to the acquisition and bringing the inventories to their present location and condition.

The basis of determination of cost remains as follows:

a) Raw material, packing material: Moving weighted average cost.

b) Stores & stores: Moving weighted average cost.

c) Work-in-progress: Cost of input plus overhead up to the stage of completion.

d) Finished Goods: Cost of input plus appropriate overhead.

d. Impairment

Impairment of non-financial assets

a) An asset is deemed impairable when recoverable value is less than its carrying cost and the difference between the two represents provisioning exigency.

b) Recoverable value is the higher of the ‘Value in Use’ and fair value as reduced by cost of disposal.

c) Test of impairment of PPE, investment in subsidiaries / associates / joint venture and goodwill are undertaken under Cash Generating Unit (CGU) concept. For Intangible Assets and Investment Properties it is undertaken in asset specific context.

d) Test of impairment of assets are generally undertaken based on indication of impairment, if any, from external and internal sources of information outlined in para 12 of Ind AS-36.

Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

e. Employee benefits

i. Short-term employee benefits

Short-term employee benefit obligations are measured on an un-discounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

ii. Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund and Employee State Insurance scheme. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.

Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

iii. Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.

Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses are recognized in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

iv. Other long-term employee benefits

The Company’s net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Re-measurements gains or losses are recognized in profit or loss in the period in which they arise.

f. Provisions and contingent liabilities

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assumptions of the time value of money and the risks specific to the liability. The unwinding of discount is recognized as finance cost.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

A provision for onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.

Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote.

g. Leases

Assets held under leases that do not transfer to the Company substantially all the risks and rewards of ownership (i.e. operating leases) are not recognized in the Company’s Balance Sheet.

Payments made under operating leases are generally recognized in profit or loss on a straight-line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.

As a lessee

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

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

As a lessor

Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflation.

h. Borrowing costs

Borrowing costs directly attributable to the acquisition or construction of those property, plant and equipment which necessarily takes a substantial period of time to get ready for their intended use are capitalised. All other borrowing costs are expensed in the period in which they incur in the statement of profit and loss.

i. Revenue

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, traded is counts and volume rebates. This inter-alia involves discounting of the consideration due to the present value if payment extends beyond normal credit terms. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing effective control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.

j. Foreign currency transactions

Transactions in foreign currencies are initially recorded by the company at their functional currency spot rates at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Company’s monetary items at the closing rates are recognised as income or expenses in the period in which they arise. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rates at the date of transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

k. Recognition of interest income

For all debt instruments measured at amortised cost, 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 amortised 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, similar options) but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss.

l. Government grant

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognised in the statement of profit and loss on a systematic basis over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and recognised in the statement of profit and loss on a systematic basis over the useful life of the asset.

m. Income tax

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

ii. Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets recognised or unrecognised are reviewed at each reporting date and are recognised / reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. The Company offsets the current tax assets and liabilities (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

n. Earnings per share

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding after adjusting for the effects of all potential dilutive ordinary shares.

o. Cash flow statement

Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a noncash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. The company considers all highly liquid investments that are readily convertible to known amounts of cash to be cash equivalents.

Amendment to Ind AS 7

Effective April 1, 2017, the Company adopted the amendment to Ind AS 7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement. The adoption of amendment did not have any material impact on the financial statements.

p. Financial instruments

i. Recognition and initial measurement

The Company initially recognises financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are measured at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

ii. Classification and subsequent measurement Financial assets

Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

Financial liabilities

Financial liabilities are subsequently carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

iii. Derecognition Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the right to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial assets are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Impairment of financial assets

The company assesses impairment based on expected credit losses (ECL) model at an amount equal to:

- 12 months expected credit losses, or

- Lifetime expected credit losses depending upon whether there has been a significant increase in credit risk since initial recognition.

However, for trade receivables, the company does not track the changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and a new financial liability with modified terms is recognised in the statement of profit and loss.

iv. Off setting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or realise the asset and settle the liability simultaneously.

q. Ind AS issued but not effective Ind AS 115- Revenue from Contract with Customers

On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018. In which, it has notified the Ind AS 115, Revenue from Contract with Customers. The objective of this Standard is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The core principle of this Standard is that an entity shall recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

This standard will come into force from April 1, 2018. As per the evaluation of the management of the company, the effect on adoption of Ind AS 115 will not be material.

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018. In which, it has notified Appendix B to Ind AS 21, Foreign currency transactions and advance consideration, which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

This amendment will come into force from April 1, 2018. As per the evaluation of the management of the company, the effect of this amendment will not be material.

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Mar 31, 2016

a) BASIS OF PREPARATION

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

“The Ministry of Corporate Affairs (MCA) has notified the Companies (Accounting Standards) Amendment Rules, 2016 vide its notification dated 30^th March 2016. The said notification read with Rule 3(2) of the Companies (Accounting Standards) Rules, 2006 is applicable to accounting period commencing on or after the date of notification i.e. 1^stApril2016”

All the assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months for the purpose of current - non-current classification of assets and liabilities.

b) RECOGNITION OF REVENUE EXPENDITURE

i) Revenues/Income and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred.

ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch of goods. Sales are recognized net of sales tax, discount, rebates and excise duty (on goods manufactured).

iii) “Export incentives under the “Duty Entitlement Pass Book Scheme”, “Duty Draw back Scheme”, etc. is accounted in the year of export on accrual basis.

c) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/ materialized

d) FIXEDASSETS Tangible Assets

Tangible Assets are stated of acquisition cost, net of accumulated depreciation and accumulated impairment losses if any.

Subsequent expenditures related to an item of fixed 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.

Items of tangible assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realizable value and are shown separately in the financial statements. Any expected loss is recognized immediately in the Statement of Profit and Loss.

Losses arising from the retirement of and gains or losses arising from disposal of tangible assets which are carried at cost are recognized in the Statement of Profit and Loss

Significant components of assets having a life shorter than the main assets, if any, are depreciated over the shorter life.

Intangible Assets

Company does not have any intangible assets for the year 2015-16.

e) DEPRECIATION

(i) Depreciation on Factory Buildings, Plant and Machinery, Electrical Installations and Equipment is provided on a Straight Line Method and in case of other assets on Written Down Value Method, over the estimated useful life of assets.

(ii) The Company depreciates its fixed assets over the useful life in the manner prescribed in Schedule II of the Act,

(iii) No depreciation is provided on Land.

(iv) Depreciation on additions to assets or on sale/discardment of assets, is calculated pro rata from the month of such addition or up to the month of such sale/ discardment, as the case may be.

f) INVENTORIES

Inventories of Raw Materials, Work-in-Process, Stores and Spares, Finished Goods and Stock-in-Trade are valued at cost or net realizable value, whichever is lower. Costs of inventories are determined by using weighted average basis. Finished goods and work in progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition.

g) INVESTMENTS

Company does not have any Investment outstanding for the year2015-2016

h) BORROWING COST

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the assets up to the date the assets is put to use. Other borrowing cost are charged to the Statement of Profit and Loss in the year in which they are incurred.

i) SALES

Sales are inclusive of sales tax and processing charges and are not of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is considered as stock in hand.

j) RETIREMENT BENEFITS

Defined Contribution Plan

Contribution to defined contribution schemes such as employee’s state insurance, labour welfare fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Company’s provident fund contribution in respect of employees is made to government administrated fund and charged as expenses to the statement of Profit & Loss. The above benefits are classified as Defined Contribution Schemes as the company has no further defined obligations beyond the monthly contributions.

Defined benefit Plans

The company also provides for retirement/post-retirement benefits in the form of gratuity and compensated absences. The company’s liability towards such defined benefits plans is determined based on valuation as at Balance Sheet date, made by independent actuaries using project unit credit method. Actuarial gains and losses in respect of the Statement of Profit & Loss in the year in which they are arise. The classification of the company’s net obligation into current and non-current is as per the actuarial valuation report.

k) EXCISE DUTY

The company accounts for excise duty on manufactured goods at the time of their clearance from the bonded premises.

I) FOREIGN CURRENCYTRANSACTIONS

All foreign currency transactions have been accounted at the rate prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit & Loss.

m) TAXES ON INCOME

Income Taxes are accounted for in accordance with Accounting Standard 22 "Accounting for Taxes on Income. Income Tax comprises both current and deferred tax. Current tax in measured on the basis of estimated income and tax credits computed in accordance with the provisions of the Income Tax Act,1961. Deferred Tax is recognized on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

In view of carried forward Business losses and Un-absorbed depreciation as per Income Tax Act, The Company has not recognized Deferred Tax Assets.

n) POLICY FOR GOVERNMENT GRANTS

The Company has changed the accounting policy in respect of recognizing Government incentive for Mega Project Subsidy. In the current year the amount of Rs.632.40 Lacs is recorded on accrual basis as income in the Statement of Profit & Loss which was earlier credited to Reserve & Surplus.

o) CASH & CASH EQUIVALENTS

In the cash flow statement, cash and cash equivalents include cash in hand, term deposits with bank and other short-term highly liquid investments with original maturities of three months or less.

p) SEGMENT REPORTING

The company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

q) EARNING PER SHARE

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

r) LEASE ACCOUNTING

Leasing of assets whereby the lesser essentially remains the owner of the asset is classified as operating leases. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on Straight Line basis. Any compensation, according to agreement, that the lessee is obliged to pay to the lesser if the leasing contract is terminated prematurely is expensed during the period in which the contract is terminated.

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Mar 31, 2015

A) BASIS OF PREPARATION

The Financial Statements have been prepared in accordance with the Generally Accepted Accounting Principles in India ('Indian GAAP") to comply with the Accounting standards specified under Section 133 of the Companies Act,2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act,2013 and other accounting pronouncements of the Institute of Chartered Accountants of India. The financial statements have been prepared under historical cost convention and on accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year except for change in the accounting policy for depreciation as mentioned in Note 36.

b) RECOGNITION OF REVENUE EXPENDITURE

i) Revenues/Income and Costs/Expenditure are generally accounted on accrual, as the are earned or incurred.

ii) Sale of Goods is recognized on transfer of significant risks and rewards of ownership which is generally on the dispatch or goods. Sales are recognised net of sales tax, discount, rebates and excise duty (on goods manufactured).

iii) "Export incentives Under the " "Duty Entitlement Pass Book Scheme", "Duty Draw back Scheme", etc. is accounted in the year of export on accrual basis.

iv) Dividend income on investments is recognized when the right to receive dividend is established.

c) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

d) FIXED ASSETS Tangible Assets

Tangible Assets are stated of acquisition cost, net of accumulated depreciation and accumulated impairment losses if any.

Subsequent expenditures related to an item of fixed 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.

Items of tangible assets that have been retired from active use and are held for disposal are stated at the lower of their net book value and net realizable value and are shown separately in the financial statements. Any expected loss is recognized immediately in the Statement of Profit and Loss.

Losses arising from the retirement of and gains or losses arising from disposal of tangible assets which are carried at cost are recognized in the Statement of Profit and Loss Intangible Assets

Intangible assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortised on a straight line basis between 3-5 years.

e) DEPRECIATION

i) Depreciation on Factory Building, Non-Factory Building, Plant & Machinery, Furniture & Fixture, Office Equipments, Vehicles, Computers & Electrical Installation is provided on a Straight Line Method.

ii) Effective 1st April 2014, the Company depreciateds its fixed assets over the useful life in the manner prescribed in Schedule II or the Act, as against the earlier practice of depreciating at the rates prescribed in Schedule XIV of the Companies Act, 1956.

iii) No depreciation is provided on Land

iv) Depreciation on additions to assets or on sale/discardment of assets, is calculated pro rata from the month of such addition or upto the month of such sale/discardment, as the case may be.

v) During the current year, the Company has revised its accounting policy in respect of depreciation method of its fixed assets where depreciation was provided in the previous years under the 'written down value method'. Based on an evaluation carried out by the management in the current year, fixed assets are now being depreciated on 'straight line method' over the expected useful life of the fixed assets as against written down value method. This change in accounting policy has been made as it would result in a more appropriate presentation of the financial statements. As a result of this change, depreciation has been calculated retrospectively on straight line method and accordingly the Company has recorded reversal of depreciation expense amounting to Rs. 5,72,81,347/- pertaining to previous years in the current year's Statement of Profit & Loss.

vi) Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets (determined after considering the change in the method of depreciation from WDV to SLM), after retaining the residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of Rs.2,78,76,584/- (Net of Deferred Tax) against the opening balance of General Reserves.

vii) The depreciation expense in the Statement of Profit & Loss for the year is higher by Rs. 2,48,52,146/- consequent to the above change in the method of Depreciation and higher by Rs. 6,37,43,455/- due to change in estimates.

f) INVENTORIES

Inventories of Raw Materials, Work-in-Process, Stores and spares, Finished Goods and Stock-in-Trade are are valued at cost or net realisable value, whichever is lower. Cost of inventories are determined by using weighted average basis. Finished goods and work in progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition.

g) INVESTMENTS

Current investments, if any, are carried at the lower of costs and quoted / fair value, computed category wise. Long term investments are carried at costs. Provision for diminution in the value of long term investments is made only if such decline is not temporary in the opinion of the management. For the purpose of arriving at profit/loss on sale of investment, the cost is determined on average basis..

h) BORROWING COST

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the assets up to the date the assets is put to use. Other borrowing cost are charged to the Statement of Profit and Loss in the year in which they are incurred.

i) RETIREMENT BENEFITS Defined Contribution Plan

Contribution to defined contribution schemes such as employee's state insurance, labour welfare fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Company's provident fund contribution in respect of employees is made to government administrated fund and charged as expenses to the statement of Profit & Loss. The above benefits are classified as Defined Contribution Schemes as the company has no further defined obligations beyond the monthly contributions.

Defined benefit Plans

The company also provides for retirement/post-retirement benefits in the form of gratuity and compensated absences. The company's liability towards such defined benefits plans is determined based on valuation as at Balance Sheet date, made by independent actuaries using project unit credit method. Actuarial gains and losses in respect of the Statement of Profit & Loss in the year in which they are arise. The classification of the company's net obligation into current and non-current is as per the actuarial valuation report.

j) EXCISE DUTY

The company accounts for excise duty on manufactured goods at the time of their clearance from the bonded premises.

k) FOREIGN CURRENCY TRANSACTIONS

All foreign currency transactions have been accounted at the rate prevailing on the date of transaction. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the Statement of Profit & Loss.

l) TAXES ON INCOME

Income Taxes are accounted for in accordance with Accounting Standard 22 "Accounting for Taxes on Income. Income Tax comprises both current and deferred tax. Current tax in measured on the basis of estimated income and tax credits computed in accordance with the provisions of the Income Tax Act,1961. Deferred Tax is recognised on timing differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

m) POLICY FOR GOVERNMENT GRANTS

The company is entitled to various incentives from Government of Maharashtra under PSI 2007 for Mega Projects for its Burkoni Unit. The company accounts for its entitlement on accrual basis.

n) CASH & CASH EQUIVALENTS

In the cash flow statement, cash and cash equivalents include cash in hand, term deposits with bank and other short-term highly liquid investments with original maturities of three months or less.

o) SEGMENT REPORTING

The company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

p) EARNING PER SHARE

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

q) LEASE ACCOUNTING

Leasing of assets whereby the lessor essentially remains the owner of the asset is classified as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on Straight Line basis. Any compensation, according to agreement, that the lessee is obliged to pay to the lessor if the leasing contract is terminated prematurely is expensed during the period in which the contract is terminated.

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Mar 31, 2013

A) SYSTEM OF ACCOUNTING

Financial Statements are based on historical cost. The company generally follows the mercantile system of accounting and recognizes items of income and expenditure on accrual basis, amount and non-inclusion of provided excise duty on finished goods lying in bonded warehouse.

b) FIXED ASSETS

i) Fixed assets are stated at cost, unless stated otherwise. Cost comprises the purchase price

and other attributable expenses. ii) Revaluation: The net increase in the value of the assets is credited to the revaluation reserve.

c) DEPRECIATION :

Depreciation is charged in the account on the following basis:

i) In Hinganghat Unit Depreciation is provided on all fixed assets under the written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

Depreciation on addition to fixed assets during the year is charged on pro-rata basis with reference to the date of addition.

ii) In Burkoni Unit depreciation is provided on all assets under SLM method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 for single shift working.

iii) Intangible assets are amortized over a period of 10 years.

d) INVENTORIES:

Inventories are valued at cost on weighted average basis.

e) INVESTMENTS:

Investments are stated at cost diminution in the value of which is permanent in nature has been Provided.

f) BORROWING COST:

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the assets up to the date the assets is put to use. Other borrowing cost are charged to the Profit and Loss Account in the year in which they are incurred.

g) SALES:

Sales are inclusive of sales tax and processing charges and are net of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is Considered as stock in hand.

h) RETIREMENT BENEFIT:

The Company has various schemes of Retirement benefits such as Provident Fund, Gratuity Fund etc. duly recognized by Income tax authorities and the company''s contributions are charged against revenue every year.

i) EXCISE DUTY:

The company accounts for excise duty on manufactured goods at the time of their clearance from the bonded premises.

j) FOREIGN CURRENCY TRANSACTIONS:

All foreign currency transactions have been accounted at the rate prevailing on the date of transaction. Receivables in foreign currency realized till date have been taken at the rates actually realized. The loss or gain due to fluctuations of exchange rates is charged to the Profit & Loss Account.

k) TAXES ON INCOME:

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

I) POLICY FOR GOVERNMENT GRANTS

The company is entitled to various incentive from Government of Maharashtra under PSI 2007 for Mega Projects for its Burkoni Unit. The company accounts for its entitlement as capital income on accrual basis.

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Mar 31, 2012

A) SYSTEM OF ACCOUNTING

Financial Statements are based on historical cost. The company generally follows the mercantile system of accounting and recognizes items of income and expenditure on accrual basis except for non-provision of leave with pay amount and non-inclusion of excise duty on finished goods lying in bonded warehouse.

b) FIXED ASSETS

i) Fixed assets are stated at cost, unless stated otherwise. Cost comprises the purchase price and other attributable expenses.

ii) Revaluation: The net increase in the value of the assets is credited to the revaluation reserve.

c) DEPRECIATION:

Depreciation is charged in the account on the following basis:

i) In Hinganghat Unit Depreciation is provided on all fixed assets under the written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956. Depreciation on addition to fixed assets during the year is charged on pro-rata basis with reference to the date of addition.

ii) In Burkoni Unit depreciation is provided on all assets under SLM method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 for single shift working.

iii) Intangible assets are amortized overa period of 10 years.

d) INVENTORIES:

Inventories are valued at cost on weighted average basis.

e) INVESTMENTS:

Investments are stated at cost diminution in the value of which is permanent in nature has been provided.

f) BORROWING COST:

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the assets up to the date the assets is put to use. Other borrowing cost are charged to the Profit and Loss Account in the year in which they are incurred.

g) SALES:

Sales are inclusive of sales tax and processing charges and are net of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is considered as stock in hand.

h) RETIREMENT BENEFIT:

The Company has various schemes of Retirement benefits such as Provident Fund, Gratuity Fund etc. duly recognized by Income tax authorities and the company's contributions are charged against revenue every year.

i) EXCISE DUTY:

The company accounts for excise duty on manufactured goods at the time of their clearance from the bonded premises.

j) FOREIGN CURRENCYTRANSACTIONS:

All Foreign Currency Transactions have been accounted at the rate prevailing on the date of transaction. Receivables in foreign currency realized till date have been taken at the rates actually realized. The loss or gain due to fluctuations of exchange rates is charged to the Profit & Loss Account.

k) TAXES ON INCOME:

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

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Mar 31, 2011

A) SYSTEM OF ACCOUNTING

Financial Statements are based on historical cost. The company generally follows the mercantile system of accounting and recognizes items of income and expenditure on accrual basis except for non- provision of leave with pay amount and non-inclusion of excise duty on finished goods lying in bonded warehouse.

b) FIXED ASSETS

i) Fixed assets are stated at cost, unless stated otherwise cost comprises the purchase price and other attributable expenses.

ii) Revaluation: The net increase in the value of the assets is credited to the revaluation reserve.

c) DEPRECIATION:

Depreciation is charged in the account on the following basis:

i) In Hinganghat Unit Depreciation is provided on all fixed assets under the written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956. Depreciation on addition to fixed assets during the year is charged on pro-rata basis with reference to the date of addition.

ii) In Burkoni Unit depreciation is provided on all assets under SLM method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 for single shift working.

iii) Intangible assets are amortized over a period of 10 years.

d) INVENTORIES:

Inventories are valued at cost on weighted average basis.

e) INVESTMENTS:

Investments are stated at cost diminution in the value of which is permanent in nature has been provided.

f) BORROWING COST:

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the assets up to the date the assets is put to use. Other borrowing cost are charged to the Profit and Loss Account in the year in which they are incurred.

g) SALES:

Sales are inclusive of sales tax and processing charges and are net of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is considered as stock in hand.

h) RETIREMENT BENEFIT:

The Company has various schemes of Retirement benefits such as Provident Fund, Gratuity Fund etc. duly recognized by Income tax authorities and the company's contributions are charged against revenue every year.

i) EXCISE DUTY:

The company accounts for excise duty on manufactured goods at the time of their clearance from the bonded premises.

j) FOREIGN CURRENCY TRANSACTIONS:

All Foreign Currency Transactions have been accounted at the rate prevailing on the date of transaction. Receivables in foreign currency realized till date have been taken at the rates actually realized. The loss or gain due to fluctuations of exchange rates is charged to the Profit & Loss Account.

k) TAXES ON INCOME:

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

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Mar 31, 2010

A) SYSTEM OF ACCOUNTING

Financial Statements are based on historical cost. The company generally follows the mercantile system of accounting and recognizes items of income and expenditure on accrual basis except for non-provision of leave with pay amount and non-inclusion of excise duty on finished goods lying in bonded warehouse.

b) FIXED ASSETS

i) Fixed assets are stated at cost, unless stated otherwise cost comprises the purchase price and other attributable expenses.

ii) Revaluation: The net increase in the value of the assets is credited to the revaluation reserve.

c) DEPRECIATION

Depreciation is charged in the account on the following basis:

i) In Hinganghat Unit Depreciation is provided on all fixed assets underthe written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956. Depreciation on addition to fixed assets during the year is charged on pro-rata basis with reference to the date of addition.

ii) In Burkoni Unit depreciation is provided on all assets under SLM method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956 for single shift working.

iii) Intangible assets are amortized over a period of 10 years.

d) INVENTORIES

Inventories are valued at cost on weighted average basis.

e) INVESTMENTS

Investments are stated at cost without considering the diminution in the value of investment.

f) BORROWING COST

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the assets up to the date the assets is put to use. Other borrowing cost are charged to the Profit and Loss Account in the year in which they are incurred.

g) SALES

Sales are inclusive of excise duty, sales tax and processing charges and are net of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is considered as stock in hand.

h) RETIREMENT BENEFIT:

The Company has various schemes of Retirement benefits such as Provident Fund, Gratuity Fund etc. duly recognized by Income tax authorities and the companys contributions are charged against revenue every year.

i) EXCISE DUTY:

The company accounts for excise duty on manufactured goods at the time of their clearance from the Bonded premises.

j) FOREIGN CURRENCYTRANSACTIONS:

All Foreign Currency Transactions have been accounted at the rate prevailing on the date of transaction. Receivables in foreign currency realized till date have been taken at the rates actually realized. The loss or gain due to fluctuations of exchange rates is charged to the Profit & Loss Account.

k) TAXES ON INCOME:

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

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Mar 31, 2004

A. SYSTEM OF ACCOUNTING

Financial Statements are based on historical cost. The company generally follows the mercantile system of accounting and recognises items of income and expenditure on accrual basis except for Non-provision of leave with pay amount and non-inclusion of excise duty on finished goods lying in bonded warehouse.

b. FIXED ASSETS

i) All Fixed Assets are stated at cost of acquisition less accumulated depreciation except some items of plants & machinery which were revalued on 3rd May, 1994 & stated at carrying values based on such valuation.

ii) Work in progress includes the advances paid amounting to Rs. 83,07,857/-

c. DEPRECIATION

Depreciation is charged in the account on the following basis:

i) Depreciation is provided on all fixed assets under the written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956. Depreciation on addition to fixed assets during the year is charged on pro-rata basis with reference to the date of addition.

ii) Intangible assets are amortised over a period of 10 years.

d. INVENTORIES

Inventories are valued at cost.

e. INVESTMENTS

Investments are stated at cost.

f. BORROWING COST

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the assets upto the date the asset is put to use. Other borrowing cost are charged to the Profit and Loss Account in the year in which they are incurred.

g. SALES

Sales are inclusive of excise duty, sales tax and processing charges and are net of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is considered as stock in hand.

h. RETIREMENT BENEFIT

The company has various schemes of Retirement benefits such as Provident Fund, Gratuity Fund etc. duly recognised by Income Tax authorities and the companys contributions are charged against revenue every year.

i. EXCISE DUTY

The company accounts for excise duty on manufactured goods at the time of their clearance from the Bonded Premises.

j. FOREIGN CURRENCY TRANSACTIONS

All Foreign Currency Transactions have been accounted at the rate prevailing on the date of transaction. Receivables in foreign currency realised till date have been taken at the rates actually realised. The loss or gain due to fluctuations of exchange rates is charged to Profit and Loss Account. FCNR- B demand loan from Banks have been stated at the rate prevailing on the date of transaction.

k. TAXES ON INCOME

Current fax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

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Mar 31, 2003

A. SYSTEM OF ACCOUNTING

Financial Statements are based on historical cost. The company generally follows the mercantile system of accounting and recognises items of income and expenditure on accrual basis except for non-provision of gratuity premium payable to group gratuity fund administered by LIC, Non-provision of leave with pay amount and non-inclusion of excise duty on finished goods lying in bonded warehouse.

b. FIXED ASSETS

i) All Fixed Assets are stated at cost of acquisition less accumulated depreciation except some items of plants & machinery which were revalued on 3rd May, 1994 & stated at such amount.

ii) Work in progress includes the advances paid amounting to Rs. 55,000/-

c. DEPRECIATION

Depreciation is charged in the account on the following basis:

i) Depreciation is provided on all fixed assets under the written down value method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956. Depreciation on addition to fixed assets during the year is charged on pro-rata basis with reference to the date of addition.

ii) Intangible assets is amortised over a period of 10 years.

d. INVENTORIES

Inventories are valued at cost.

e. INVESTMENTS Investments are stated at cost.

f. BORROWING COST

Borrowing cost directly attributable to the acquisition or construction of fixed assets are capitalised as part of the assets upto the date the assets is put to use. Other borrowing cost are charged to the Profit and Loss Account in the year in which the same is incurred.

g. SALES

Sales are inclusive of excise duty, sales tax and processing charges and are net of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is considered as stock in hand.

h. RETIREMENT BENEFIT

The company has various schemes of Retirement benefits such as Provident Fund, Gratuity Fund etc. duly recognised by Income Tax authorities and the companys contributions are charged against revenue every year except for nil contribution to Group gratuity fund adminstered by LIC since last 3 years.

i. EXCISE DUTY

The company accounts for excise duty on manufactured goods at the time of their clearance from the Bonded Premises.

j. FOREIGN CURRENCY TRANSACTIONS

All Foreign Currency Transactions have been accounted at the rate prevailing on the date of transaction. Receivables in foreign currency realised till date have been taken at the rates actually realised. The loss or gain due to fluctuations of exchange rates is charged to Profit and Loss Account. FCNR- B demand loan from Banks have been stated at the rate prevailing on the date of transaction.

k. TAXES ON INCOME

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

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Mar 31, 2002

A. SYSTEM OF ACCOUNTING

Financial Statements are based on historical cost. The company generally follows the mercantile system of accounting and recognises items of income and expenditure on accrual basis except for non-provision of gratuity premium payable to group gratuity fund administered by LIC and non-inclusion of excise duty on finished goods lying in bonded warehouse.

b. FIXED ASSETS

I) All Fixed Assets are stated at cost of acquisition less accumulated depreciation except some items of plants & machinery which were revalued on 3rd May, 1994 & stated at such amount.

II) Work in progress includes the advances paid amounting to Rs. 1,60,864/-

c. DEPRECIATION

Depreciation is charged in the account on the following basis:

Depreciation has been provided on written down value basis in respect of assets acquired prior to 31 st March, 1992. On assets acquired on or after 1 st April 1992, depreciation has been charged on straight line method (SLM) except plant & machniery, Non-Factory Building and Furniture and Fixtures, on which it is charged on WDV method applying the rates of Schedule XIV of the Companys Act, 1956.

d. INVENTORIES

Inventories are valued at cost on weighted average basis.

e. INVESTMENTS

Investments are stated at cost without considering the diminution in the value of investment.

f. BORROWING COST

Borrowing cost directly attributable to the acquisition or construction of fixed assets are capitalised as part of the assets upto the date the assets is put to use. Other borrowing cost are charged to the Profit and Loss Account in the year in which the same incurred. However, there are no assets acquired during the year out of borrowed money.

g. SALES

Sales are inclusive of excise duty, sales tax and processing charges and are net of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is considered as stock in hand.

h. RETIREMENT BENEFIT

The company has various schemes of Retirement benefits such as Provident Fund, Gratuity Fund etc. duly recognised by Income Tax authorities and the

companys contributions are charged against revenue every year except for nil contribution to Group gratuity fund adminstered by LIC since last 2 years.

Liability on account of encashment of leave entitlement of employees is actuarially determined and provided for.

I. EXCISE DUTY

The company accounts for excise duty on manufactured goods at the time of their clearance from the Bonded Premises.

j. FOREIGN CURRENCY TRANSACTIONS

All Foreign Currency Transactions have been accounted at the rate prevailing on the date of transaction. Receivables in foreign currency realised till date have been taken at the rates actually realised. The loss or gain due to fluctuations of exchange rates is charged to Profit and Loss Account.

k. TAXES ON INCOME

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

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Mar 31, 2000

I. SALES

Sales ore inclusive of excise duty, sales fax and processing charges and are net of discount. Consignment sales are accounted for on the receipt of statement of sales from the consignee, till such time it is considered as stock in hand.

ii. RETIREMENT BENEFIT

The company has various schemes of Retirement benefits such as Provident Fund, Gratuity Fund etc. duly recognised by Income Tax authorities and the companys contributions are charged against revenue every year.

Company is accounting encashment of leave benefit on retirement of staff on cash basis. Provision for accruing liability is calculated on actual working basis and is considered in this account.

The gratuity fund benefits are administered by a trust formed for this purpose through the Group Gratuity Schemes of the Life Insurance Corporation of India.

iii. FIXED ASSETS

a) All Fixed Assets are stated at cost of acquisition less accumulated depreciation except some items of plants & machinery which were revalued on 3rd May, 1994 & stated at such amount.

b) Work in progress includes the advances paid amounting to Rs. 5,96,679/-.

iv. DEPRECIATION

Depreciation is charged in the account on the following basis:

Depreciation has been provided on written down value basis in respect of assets acquired prior to 31st March, 1992. On assets acquired on or after 1st April 1992, depreciation has been charged on straight line method (SLM) except plant & machniery on which it is charged on WDV method applying the rates of Schedule XIV of the Companys Act, 1956.

v. INVENTORIES

Inventories are valued at cost on weighted average basis.

vi. INVESTMENTS

Investments are stated at cost.

vii. EXCISE DUTY

The company accounts for excise duty on manufactured goods at the time of their clearance from the Bonded Premises.

viii. ISSUE EXPENSES

Amortisation of Issue Expenses have been adjusted against share premium account.

ix. FOREIGN CURRENCY TRANSACTIONS:

All Foreign Currency Transactions have been accounted at the rate prevailing on the date of transaction. Receivables in foreign currency realised till date have been taken at the rates actually realised. The loss or gain due to fluctuations of exchange rates is charged to Profit and Loss Account.