Accounting Policies of Shiva Global Agro Industries Ltd. Company

Mar 31, 2018

NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES :

COMPANY OVERVIEW :

Shiva Global Agro Industries Limited, having corporate office in Nanded, Maharashtra, India, incorporated under provisions of The Companies Act, 2013. The company is a public limited company and listed on the Bombay Stock Exchange Limited. The company is engaged in manufacturing and trading of fertilizers.

1.1 STATEMENT OF COMPLIANCE

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 (“the Act”), Companies (Indian Accounting Standards) Rules, 2015, Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act, as applicable.

Upto the year ended 31 March 2017, the Company prepared its financial statements in accordance with the requirements of previous generally accepted accounting principles (“Previous GAAP”), which includes Accounting Standards (“AS”) notified under the Companies (Accounting Standards) Rules, 2006 and prescribed under Section 133 of the Companies Act, 2013, as applicable and the relevant provisions of the Companies Act, 2013.

These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is April 01, 2016. Refer Note 42 for the details of reconciliations from Previous GAAP and the first-time adoption exemptions availed by the Company.

1.2 BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, and on accrual basis.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.

In addition, a number of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values.

Fair value categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices)

Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs)

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumption made in measuring fair values are included in fair value measurement forming part of notes to accounts.

Based on the nature of activities of the Company and the average time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

1.3 NON CURRENT ASSETS HELD FOR SALE :

Assets held for sale are measured at the lower of the carrying amount or fair value less costs to sell. The determination of fair value less costs to sell includes the use of management estimates and assumptions. The fair value of the asset held for sale has been estimated using valuation techniques (mainly income and market approach), which includes unobservable inputs.

1.4 FUNCTIONAL AND PRESENTATION CURRENCY :

The financial statements have been prepared and presented using Indian Rupees (Rs.) which is company’s functional and presentation currency.

1.5 USE OF ESTIMATES:

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, the disclosures of contingent liabilities at that date of the financial statements and the reported amounts of revenues and expenses during the year.

Application of accounting policies that require complex and subjective judgements and the use of assumptions in these financial statements are disclosed below:

1. Recognition of revenue

2. Recognition of Deferred tax liability

3. Measurement of defined benefit obligation : key actuarial assumptions.

4. Recognition and measurement of provisions and contingencies : key assumptions about the likelihood and magnitude of an outflow of resources.

5. Estimation of useful life of property, plant and equipments and intangible assets

6. Estimation of current tax expenses and payable. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Appropriate changes in estimates are made as and when management becomes aware of changes in circumstances surrounding the estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods and, if material, their effects are disclosed in the notes to financial statements.

1.6 PROPERTY, PLANT & EQUIPMENT AND DEPRECIATION:

i) Recognition & Measurement :

Property, Plant & Equipment are stated at original cost net of tax/ duty credits availed, if any, less accumulated depreciation and impairment losses, if any. Cost comprises of the acquisition price/construction cost, including any non-refundable taxes or levies, cost of borrowings till the date of capitalization in the case of assets involving material investment and substantial lead time and any directly attributable expenditure incurred in bringing the asset to its working condition for the intended use by management. Further any trade discounts and rebates are deducted. Property, plant and equipment not ready for intended use as on the date of balance sheet are disclosed as “Capital work-in-progress” at cost less impairment losses, if any.

ii) Subsequent recognition :

Subsequent expenditure related to an item of property, plant and equipment is added to its carrying amount only if it increases the future economic benefits from the existing assets beyond its previously assessed standard of performance & such costs of the item can be measured reliably.

iii) Depreciation :

Property, plant & equipment, other than Land, are depreciated on a pro-rata basis on the Straight-Line method as per the estimated useful life specified in Schedule II of the Companies Act, 2013 effective from 01st April, 2014.

iv) Derecognition :

An item of property, plant and equipment is derecognized either when they have been disposed of or when no future economic benefit is expected to arise from the continued use of the asset. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in statement of profit and loss in the year of de-recognition.

1.7 INVESTMENT PROPERTIES

i) Recognition:

Property that is held for long-term rental yields or for capital appreciation or both and that is not occupied by the Company is classified as Investment Property. Investment properties are measured initially at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use by management. Any trade discount, rebate are deducted in arriving at the purchase price. All repairs & maintenance costs are recognized in statement of Profit & Loss Account as incurred.

ii) Subsequent Recognition :

Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation & accumulated impairment loss, if any.

iii) Depreciation :

Depreciation on Investment property, wherever applicable, is provided on straight line basis as per the estimated useful lives, prescribed in schedule II to the Companies Act, 2013, effective from 01st April, 2014.

iv) De-recognition :

Investment properties are derecognized either when they have been disposed of or when they are permanently withdrawn from use & no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in statement of profit and loss in the year of de-recognition.

1.8 INTANGIBLE ASSETS:

i) Recognition & Measurement :

Intangible Assets are stated at acquisition cost and other costs incurred, which is attributable to preparing the asset for its intended use, less accumulated amortization and impairment losses, if any.

ii) Subsequent recognition :

Expenditure is capitalized only if it is probable that future economic benefits associated with the expenditure will flow to the entity and such costs can be measured reliably. All other expenditure shall be recognized in profit or loss as incurred.

iii) Amortization :

Intangible Assets are amortized on the basis of Straight-Line method. Specified software purchased is amortized over their estimated useful lives.

iv) Derecognition :

An intangible asset is derecognized either when they have been disposed of or when no future economic benefit is expected to arise from the continued use of the asset. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in statement of profit and loss in the year of de-recognition.

1.9 IMPAIRMENT :

The carrying amount of Property, plant & equipment, Investment properties and Intangible assets are reviewed at each balance sheet date to assess impairment if any, based on internal/external factors. An asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired.

1.10 LEASES

A lease is classified at the inception date as a finance lease or an operating lease. Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit and loss.

Other leases are treated as operating leases, with payments are recognized as expense in the statement of profit & loss on a straight-line basis over the lease term.

1.11 FINANCIAL INSTRUMENTS :

i) Recognition & Initial Measurement:

a. Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the company becomes a party to the contractual provisions of the instruments.

b. The company measures a financial asset or financial liability at its fair value plus or minus, in case of a financial asset or financial liability not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

ii) Financial assets - Classification :

On initial recognition, a financial asset is classified as, measured at

1. Amortized cost ;

2. Fair value through other comprehensive income (FVOCI) -debt instrument;

3. Fair value through other comprehensive income (FVOCI) -equity instrument;

4. Fair value through profit and loss (FVTPL)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets. A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

1. The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

2. 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. A financial asset is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL:

1. The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and for sale; and

2. The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment by investment basis.

All financial assets not classified as measured at amortized cost or FVTOCI as described above are measured at FVTPL. On initial recognition, the Company may irrevocably designate a financial asset as measured at FVTPL if doing so eliminates or significantly reduces accounting mismatch that would otherwise arise from recognizing them as measured at amortized cost or at FVOCI.

iii) Financial assets - Subsequent measurement

1) Financial assets at amortized cost:

These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Financial assets measured at FVTOCI- Debt investments :

These assets are subsequently measured at fair value. Interest income under the effective interest method, foreign gains and losses and impairment are recognized in profit or loss. Other net gains or losses are recognized in oCi.

On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.

3) Financial assets measured at FVTOCI- Equity investments :

These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of cost the cost of the investment. Other net gains or losses are recognized in OCI and are not reclassified to profit or loss. The company has elected to recognize changes in the fair value of certain equity securities in OCI. These changes are accumulated within FVOCI equity investment reserve within equity. The company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognized.

4) Financial assets at FVTPL :

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

5) Financial Assets - Impairment :

The Company assesses on a forward looking basis “expected credit loss” (ECL) associated with its assets carried at amortized cost and FVOCI debt instruments. The company recognizes loss allowance for expected credit losses on financial assets.

For trade receivables only, the company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognized form initial recognition of the receivables.

6) Financial assets - Derecognition

The Company derecognizes 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 subsequently all of the risk and rewards of ownership of the financial asset 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 transaction whereby it transfers asset recognized 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 derecognized.

iv) Financial liabilities - Classification

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is a derivative or it is designated as such on initial recognition.

1) Financial liabilities - Subsequent measurement

Financial liabilities measured at FVTPL are subsequently measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss.

2) Financial liabilities - Derecognition

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expired. The Company also derecognizes a financial liability when its term are modified and the cash flows under the modified terms are substantially different, where a new financial liability based on the modified terms is recognized at fair value. Any gain or loss on derecognition in these cases, shall be recognized in profit or loss.

v) Offsetting

Financial assets and 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 to realize the asset & settle the liability simultaneously.

1.12 INVENTORIES:

i) Raw materials, stores and spares and packing materials are valued at cost or net realizable value, whichever is lower. However, these items are considered to be realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

ii) Work-in-progress and finished goods are valued at lower of cost and net realizable value. Finished goods and work-in-progress include cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is determined on a weighted average basis.

iii) Stock in trade is valued at cost (net of input credits) or net realizable value whichever is lower, calculated on first-in-first-out (FIFO) basis.

iv) Saleable scrap, whose cost is not identified, is valued at net realizable value.

v) In the case of manufactured inventory, cost includes an appropriate share of fixed production overhead based on normal operating capacity.

1.13 CASH & CASH EQUIVALENTS :

The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and Cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage.

1.14 PROVISIONS (other than for employee benefits) :

i) Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When a provision is expected to be reimbursed, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.

ii) If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as finance cost.

1.15 EMPLOYEES BENEFITS :

i) Short-term Employee Benefits :

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

ii) Post Employment Benefits :

1. Defined Contribution Plan :

Company’s contributions paid/ payable during the year towards provident fund, pension scheme and employees’ state insurance (‘ESI’) scheme are recognized in the statement of profit and loss.

2. Defined Benefit plan :

Company’s liability towards gratuity in accordance with the Payment of Gratuity Act, 1972 is determined based on actuarial valuation using the Projected Unit Credit Method (PUCM) as at the reporting date.

All actuarial gains/losses in respect of post employment benefits and other long term employee benefits are charged to Other Comprehensive Income.

1.16 REVENUE RECOGNITION :

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment & excluding taxes or duties collected on behalf of the government.

i) Sales are recognized when the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. It includes excise duty and excludes value added tax/sales tax/Goods and Service tax. It is measured at fair value of consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.

ii) Subsidy is recognized on the basis of the rates notified from time to time by the Government of India in accordance with the Nutrient Based Subsidy (NBS) policy on the quantity of fertilizers sold by the Company for the period for which notification has been issued and for the remaining period, based on estimates.

iii) Revenue from services rendered is recognized in accordance with the specific terms of contract on performance.

1.17 OTHER INCOME :

i) Dividend income from investments is recognized when right to receive is established.

ii) Interest income is recognized on a time proportion basis taking into account the amount outstanding and transactional interest rate applicable.

iii) Rental income from investment properties and subletting of properties is recognized on a time proportion basis over the term of the relevant leases.

1.18 BORROWING COSTS :

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expense in the Statement of Profit & Loss in the period in which they are incurred.

1.19 FOREIGN CURRENCY TRANSACTIONS :

i) Initial Recognition

Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss of the year.

ii) Measurement of Foreign Currency Items at the Balance Sheet Date

Foreign currency monetary items of the Company are restated at the closing exchange rates. Non monetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these transactions are charged to the Statement of Profit and Loss.

1.20 INCOME TAX :

Income tax comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to 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 adjustments 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 substantially enacted by the reporting date. Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognized amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.

ii) Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purpose. Deferred tax is recognized in respect of carried forward losses and tax credits. Deferred tax also not recognized for temporary differences arising on the initial recognition of assets or liabilities in a transaction that affects neither accounting nor taxable profit or loss at the time of transaction.

Deferred tax assets and liabilities are recognized to the extent

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

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized 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. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

1.21 CASH FLOW STATEMENT

Cash flows are reported using the indirect method where by the profit before tax is adjusted for the effect of the transactions of a non-cash nature, any deferrals or accruals of past and future operating cash receipts or payments and items 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.

1.22 EARNINGS PER SHARE :

Basic earnings per shares has been calculated by dividing profit for the year attributable to equity shares holders by the weighted average number of equity shares outstanding during the financial year. The Company has not issued any potential equity shares and accordingly, the basic earnings per share and diluted earnings per shares are the same.

1.23 SEGMENT REPORTING :

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.

1.24 CONTINGENT LIABILITIES & CONTINGENT ASSETS :

i) Contingent liabilities disclosed for

a. A possible obligation that arises from the past events and whose existence will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

b. Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

ii) Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2016

Shiva Global Agro Industries Ltd having corporate office in Nanded, Maharashtra, India carries on manufacturing and trading of fertilizers. The Company is a public limited company and is listed on the Bombay Stock Exchange Limited

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES:

a) BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared on the basis of going concern, under the historic cost convention on accrual basis, to comply in all material aspects with applicable generally accepted accounting principles in India (“Indian GAAP”), the Accounting Standards (“AS”) notified under Section 133 of the Companies Act, 2013 (“the Act”), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI).

All the assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. The Company has ascertained its operating cycle as twelve months for the purpose of current and noncurrent classification of assets and liabilities.

b) USE OF ESTIMATES:

The preparation of the financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and the contingent liabilities as at the date of the financial statements and the results of the operations during the year.

Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods.

c) FIXED ASSETS AND DEPRECIATION & AMORTIZATION :

i) Tangible Fixed Assets:

Fixed Assets are stated at original cost net of tax/ duty credits availed, if any, less accumulated depreciation and impairment losses, if any. Cost comprises of the acquisition price/construction cost, cost of borrowings till the date of capitalization in the case of assets involving material investment and substantial lead time and any attributable expenditure incurred in bringing the asset to its working condition for the intended use.

ii) Depreciation and amortization:

(a) Tangible Assets, other than Land, are depreciated on a pro-rata basis on the Straight-Line method as per the useful life specified in Schedule II of the Companies Act, 2013.

(b) Intangible Asset is amortized on the basis of Straight-Line method. Specified software purchased is amortized over their estimated useful lives of three years.

iii) Intangible Assets:

Intangible Assets are stated at their cost of acquisitions less accumulated amortization and impairment losses, if any. An asset is recognized, where it is probable that the future economic benefits attributable to the assets will flow to the enterprises and where its cost can be reliably measured.

d) IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each reporting date, if there is any indication of impairment based on internal / external factors. If the carrying amount of assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated future cash flows.

e) FOREIGN CURRENCY TRANSACTIONS AND FORWARD CONTRACTS:

i) Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Foreign currency monetary items are translated at year end exchange rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise.

ii) In respect of forward exchange contracts entered into to hedge risks associated with foreign currency fluctuation on its existing assets and liabilities, the premium or discount at the inception of the contract is amortized as income or expense over the period of the contract. Any profit or loss arising on cancellation of such forward exchange contracts is recognized as income or expense in the Statement of Profit and Loss of the year.

f) INVESTMENTS :

Long term investments are carried at cost less provision for diminution, other than temporary, in the value of such investments.

Current investments are carried individually, at lower of cost and fair value.

g) INVENTORIES:

i) Raw materials, stores and spares and packing materials are valued at cost (net of input credits) or net realizable value whichever is lower calculated on first-in-first-out (FIFO) basis.

ii) Finished goods including those held for captive consumption and work- in-process are valued at cost or net realizable value whichever is lower, calculated on weighted average basis. Cost comprises of material, labor, power, depreciation, excise duty payable/paid wherever applicable and appropriate portion of overheads incurred in bringing the inventories to their present location & condition.

iii) Stock in trade is valued at cost (net of input credits) or net realizable value whichever is lower, calculated on first-in-first-out (FIFO) basis.

iv) Scrap and Agricultural produce is valued at Net Realizable Value.

h) REVENUE RECOGNITION:

i) Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and there is no uncertainty regarding amount of consideration & collectivity. Sales include amounts recovered towards excise duty and exclude sales tax/value added tax.

ii) Subsidy is recognized on the basis of the rates notified from time to time by the Government of India in accordance with the Nutrient Based Subsidy (NBS) policy on the quantity of fertilizers sold by the Company for the period for which notification has been issued.

iii) Income from services rendered is recognized based on the agreements/arrangements with the concerned parties and when services are rendered.

iv) Dividend income from investments is recognized when right to receive is established.

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

i) EMPLOYEES BENEFITS:

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

ii) The eligible employees of the company are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both the employees and the company makes monthly contributions at a specified percentage of the covered employees’ salary. The contributions as specified under the law are paid to the Regional Provident Fund Commissioner and the Central Provident Fund under the Pension scheme. The company recognizes such contributions as expense of the year in which the liability is incurred.

iii) The provision for gratuity liability is provided for eligible employees during the year on accrual basis. j) BORROWING COSTS:

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

k) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

ii) Contingent liabilities disclosed for

a. possible obligation which will be confirmed only by future events not wholly within the control of the Company or

b. Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

iii) Contingent assets are neither recognized nor disclosed in the financial statements.

l) TAXES ON INCOME:

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

ii) Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset, if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

iii) Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in subsequent periods, subject to consideration of prudence.

m) SEGMENT REPORTING

i) Business segment

The Company has considered business segment as the primary segment for disclosure. The Company is primarily engaged in the manufacture and trading of Farm Inputs, which in the context of Accounting Standard 17 “Segment Reporting” is considered the only business segment.

ii) Geographical segment

The Company sells its products only within India where the conditions prevailing are uniform. Hence, no separate geographical segment disclosure is necessary.

n) EARNINGS PER SHARE:

Basic earnings per shares has been calculated by dividing profit for the year attributable to equity shares holders by the weighted average number of equity shares outstanding during the year. The Company has not issued any potential equity shares and accordingly, the basic earnings per share and diluted earnings per shares are the same.

(a) Terms/rights attached to equity shares

The company has one class of share referred to as Equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders will be entitled to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) Terms of repayment for Unsecured borrowings:

Unsecured loans from directors Rs.7,26,229/- carry interest @12% per annum and is repayable after a period of 5 years from the date of loan.

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Mar 31, 2015

A) BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared on the basis of going concern, under the historic cost convention on accrual basis, to comply in all material aspects with applicable generally accepted accounting principles in India ("Indian GAAP"), the Accounting Standards ("AS") notified under Section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI).

All the assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. The Company has ascertained its operating cycle as twelve months for the purpose of current and non- current classification of assets and liabilities.

b) USE OF ESTIMATES:

The preparation of the financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and the contingent liabilities as at the date of the financial statements and the results of the operations during the year.

Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods.

c) FIXED ASSETS AND DEPRECIATION & AMORTIZATION:

i) Tangible Fixed Assets:

Fixed Assets are stated at original cost net of tax/ duty credits availed, if any, less accumulated depreciation and impairment losses, if any. Cost comprises of the acquisition price/construction cost, cost of borrowings till the date of capitalization in the case of assets involving material investment and substantial lead time and any attributable expenditure incurred in bringing the asset to its working condition for the intended use.

ii) Depreciation and amortization:

(a) Tangible Assets, other than Land, are depreciated on a pro-rata basis on the Straight-Line method as per the useful life specified in Schedule II of the Companies Act, 2013 effective from 01st April, 2014. Accordingly, the unamortized carrying value as on 01.04.2014 of those assets whose useful lives is exhausted has been adjusted against Retained Earnings and the unamortized carrying value of remaining assets is depreciated over the remaining useful lives of the assets.

(b) Intangible Assets is amortized on the basis of Straight-Line method. Specified software purchased is amortized over their estimated useful lives of three years.

iii) Intangible Assets:

Intangible Assets are stated at their cost of acquisitions less accumulated amortization and impairment losses, if any. An asset is recognized, where it is probable that the future economic benefits attributable to the assets will flow to the enterprises and where its cost can be reliably measured.

d) IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each reporting date, if there is any indication of impairment based on internal / external factors. If the carrying amount of assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated future cash flows.

e) FOREIGN CURRENCY TRANSACTIONS AND FORWARD CONTRACTS:

i) Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Foreign currency monetary items are translated at year end exchange rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise.

ii) In respect of forward exchange contracts entered into to hedge risks associated with foreign currency fluctuation on its existing assets and liabilities, the premium or discount at the inception of the contract is amortized as income or expense over the period of the contract. Any profit or loss arising on cancellation of such forward exchange contracts is recognized as income or expense in the Statement of Profit and Loss of the year.

f) INVESTMENTS :

Long term investments are carried at cost less provision for diminution, other than temporary, in the value of such investments.

Current investments are carried individually, at lower of cost and fair value.

g) INVENTORIES:

i) Raw materials, stores and spares and packing materials are valued at cost (net of input credits) or net realizable value whichever is lower calculated on first-in-first-out (FIFO) basis.

ii) Finished goods including those held for captive consumption and work- in-process are valued at cost or net realizable value whichever is lower, calculated on weighted average basis. Cost comprises of material, labor, power, depreciation, excise duty payable/paid wherever applicable and appropriate portion of overheads incurred in bringing the inventories to their present location & condition.

iii) Stock in trade is valued at cost (net of input credits) or net realizable value whichever is lower, calculated on first-in-first-out (FIFO) basis.

iv) Scrap and Agricultural produce is valued at Net Realizable Value.

h) REVENUE RECOGNITION:

i) Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and there is no uncertainty regarding amount of consideration & collectivity. Sales include amounts recovered towards excise duty and exclude sales tax/value added tax.

ii) Subsidy is recognized on the basis of the rates notified from time to time by the Government of India in accordance with the Nutrient Based Subsidy (NBS) policy on the quantity of fertilizers sold by the Company for the period for which notification has been issued.

iii) Income from services rendered is recognized based on the agreements/arrangements with the concerned parties and when services are rendered.

iv) Dividend income from investments is recognized when right to receive is established.

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

i) EMPLOYEES BENEFITS:

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

ii) The eligible employees of the company are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both the employees and the company makes monthly contributions at a specified percentage of the covered employees' salary. The contributions as specified under the law are paid to the Regional Provident Fund Commissioner and the Central Provident Fund under the Pension scheme. The company recognizes such contributions as expense of the year in which the liability is incurred.

iii) The provision for Gratuity Liability is provided for eligible employees during the year on accrual basis.

j) BORROWING COSTS:

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

k) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

ii) Contingent liabilities disclosed for

a. possible obligation which will be confirmed only by future events not wholly within the control of the Company or

b. Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

iii) Contingent assets are neither recognized nor disclosed in the financial statements.

l) TAXES ON INCOME:

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

ii) Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset, if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

iii) Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in subsequent periods, subject to consideration of prudence.

m) SEGMENT REPORTING

i) Business segment

The Company has considered business segment as the primary segment for disclosure. The Company is primarily engaged in the manufacture and trading of Farm Inputs, which in the context of Accounting Standard 17 "Segment Reporting" is considered the only business segment.

ii) Geographical segment

The Company sells its products only within India where the conditions prevailing are uniform. Hence, no separate geographical segment disclosure is necessary.

n) EARNINGS PER SHARE:

Basic earnings per shares has been calculated by dividing profit for the year attributable to equity shares holders by the weighted average number of equity shares outstanding during the year. The Company has not issued any potential equity shares and accordingly, the basic earnings per share and diluted earnings per shares are the same.

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Mar 31, 2014

A) BASIS FOR PREPARATION OF FINANCIAL STATEMENTS :

The financial statements have been prepared on the basis of going concern, under the historic cost convention on accrual basis, to comply in all material aspects with applicable generally accepted accounting principles in India ("Indian GAAP"), the Accounting Standards ("AS") notified under Section 211 (3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13 September 2013 of Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act/ 2013 Act, as applicable.

B) USE OF ESTIMATES :

The preparation of the financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, revenues and expenses and the disclosure of contingent liabilities as at the date of the financial statements and the results of the operations during the reporting year. Actual results could differ from these estimates and the difference between the actual results and the estimates are recognized in the period in which the results known/materialize.

C) FIXED ASSETS AND DEPRECIATION & AMORTIZATION :

i) Tangible Fixed Assets: Fixed Assets are stated at original cost net of tax/ duty credits availed, if any, less accumulated depreciation and impairment losses, if any. Cost of acquisition comprises all costs incurred to bring the assets to their location and working condition up to the date the assets are put to use. Costs of construction are composed of those costs that relate directly to specific assets and those that are attributable to the construction activity in general and can be allotted to the specific assets up to the date the assets are put to use. The expenditure incurred during the period of construction is debited to the capital work-in-progress and on completion the costs are allotted to the respective fixed assets.

ii) Depreciation and amortization :

Depreciation on fixed assets is provided on the straight-line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

iii) Intangible Assets: Intangible Assets are stated at their cost of acquisitions less accumulated amortization and impairment losses, if any. An asset is recognized, where it is probable that the future economic benefits attributable to the assets will flow to the enterprises and where its cost can be reliably measured. Specified software purchased is amortized over a period of three years.

D) INVESTMENTS :

Long term investments are carried at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at lower of cost and fair value.

E) INVENTORIES :

i) Raw materials, stores and spares and packing materials are valued at cost (net of input credits) or net realizable value whichever is lower calculated on first-in-first-out (FIFO) basis.

ii) Finished goods including those held for captive consumption and work- in-process are valued at cost or net realizable value whichever is lower, calculated on weighted average basis. Cost comprises of material, labour, power, depreciation, excise duty payable/paid wherever applicable and appropriate portion of overheads incurred in bringing the inventories to their present location & condition.

iii) Stock in trade is valued at cost (net of input credits) or net realizable value whichever is lower, calculated on first-in-first-out (FIFO) basis.

F) REVENUE RECOGNITION :

i) Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and there is no uncertainty regarding amount of consideration & collectivity. Sales include amounts recovered towards excise duty and exclude sales tax/value added tax.

ii) Subsidy is recognized on the basis of the rates notified from time to time by the Government of India in accordance with the Nutrient Based Subsidy (NBS) policy on the quantity of fertilizers sold by the Company for the period for which notification has been issued.

iii) Income from services rendered is recognized based on the agreements/arrangements with the concerned parties and when services are rendered.

iv) Dividend income from investments is recognized when right to receive is established.

v) Interest income is recognized on a time proportion basis taking into account the amount outstanding & transactional interest rate applicable.

G) BORROWING COST :

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

H) TAXES ON INCOME :

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

ii) Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset, if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

iii) Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in subsequent periods, subject to consideration of prudence.

I) EARNINGS PER SHARE :

Basic earning per shares has been calculated by dividing profit for the year attributable to equity shares holders by the weighted average number of equity shares outstanding during the year. The Company has not issued any potential equity shares and accordingly, the basic earning per share and diluted earning per shares are the same.

J) EMPLOYEES BENEFITS :

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.

ii) The eligible employees of the company are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both the employees and the company makes monthly contributions at a specified percentage of the covered employees'' salary. The contributions as specified under the law are paid to the Regional Provident Fund Commissioner and the Central Provident Fund under the Pension scheme. The company recognizes such contributions as expense of the year in which the liability is incurred.

K) PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS :

i) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

ii) Contingent liabilities disclosed for

a. possible obligation which will be confirmed only by future events not wholly within the control of the Company or

b. present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made.

iii) Contingent assets are neither recognized nor disclosed in the financial statements.

l) SEGMENT REPORTING :

i) Business segment : The Company has considered business segment as the primary segment for disclosure. The Company is primarily engaged in the manufacture and trading of Farm Inputs, which in the context of Accounting Standard 17 "Segment Reporting" is considered the only business segment.

ii) Geographical segment : The Company sells its products mainly within India where the conditions prevailing are uniform. Since the sales outside India are below the threshold limit, no separate geographical segment disclosure is considered necessary

M) FOREIGN CURRENCY TRANSACTIONS :

i) Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise.

ii) In respect of forward exchange contracts entered into to hedge risks associated with foreign currency fluctuation on its existing assets and liabilities, the premium or discount at the inception of the contract is amortized as income or expense over the period of the contract.

iii) Any profit or loss arising on cancellation of such forward exchange contracts is recognized as income or expense in the Statement of Profit and Loss of the year.

N) IMPAIRMENT OF ASSETS :

The carrying amounts of assets are reviewed at each reporting date, if there is any indication of impairment based on internal / external factors. If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of estimated future cash flows.

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Mar 31, 2012

A. ACCOUNTING CONVENTION:

The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles, Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant provisions thereof.

During the year, Revised Schedule VI notified under the Companies Act, 1956 has became applicable to the Company for preparation and presentation of its financial statements. The Company has reclassified the previous year figures in accordance with the requirements applicable in the current year.

B. USE OF ESTIMATES:

The presentation of the financial statements requires certain estimates and assumptions. These estimations and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known or materialized.

C. OWN FIXED ASSETS AND DEPRECIATION AND AMORTIZATION:

i. Tangible Fixed Assets:

Fixed Assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and impairment losses. Cost of acquisition comprises all costs incurred to bring the assets to their location and working condition upto the date the assets are put to use. Costs of construction are composed of those costs that relate directly to specific assets and those that are attributable to the construction activity in general and can be allotted to the specific assets upto the date the assets are put to use. The expenditure incurred during the period of construction is debited to the capital work-in-progress and on completion the costs are allotted to the respective fixed assets.

Depreciation on fixed assets is provided on straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

ii. Intangible Assets:

Intangible Assets are stated at their cost of acquisitions less accumulated amortization and impairment losses. An asset is recognized, where it is probable that the future economic benefits attributable to the assets will flow to the enterprises and where its cost can be reliably measured. Specified software purchased is amortized over a period of three years.

D. INVESTMENTS:

Long-term investments are carried at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at lower of cost and fair value.

E. INVENTORIES:

i. Finished goods are valued at cost or net realizable value whichever is lower. Cost comprises of material, labour, power, depreciation and appropriate portion of overheads incurred in bringing the inventories to their present location and condition.

ii. Raw materials, stores and spares and packing materials are valued at cost (net of input credits) or net realizable value whichever is lower.

F. EXCISE DUTY:

Excise duty is accounted on the basis of both, payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses.

G. REVENUE RECOGNITION:

i. Revenue from sale of products is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer and there is no uncertainty regarding amount of consideration and collectivity.

ii. Subsidy is recognized on the basis of the concession scheme announced by the Government of India from time to time. Subsidy is accounted for on the basis of sale made by the Company.

iii. Dividend income is recognized when right to receive is established.

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

H. PRELIMINARY EXPENSES:

Preliminary expenses are amortized over a period of Five years.

I. BORROWING COST:

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

J. PROVISION FOR CURRENT AND DEFERRED TAX:

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

ii. Deferred tax is recognized on the basis of timing differences between the taxable income and accounting income that originate in one year and are capable of being reversal in one or more subsequent years, subject to concept of prudence.

K. EARNINGS PER SHARE:

Basic earning per shares has been calculated by dividing profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The Company has not issued any potential equity shares and accordingly, the basic earning per share and diluted earning per share are the same.

L. NET PROFIT FOR THE PERIOD AND PRIOR PERIOD ITEMS:

i. All items of income and expenses pertaining to the year are included in arriving at the net profit for the year unless specifically mentioned elsewhere in the financial statement or as required by accounting standard.

ii. Prior period items are disclosed separately in the Statement of Profit and Loss.

M. EMPLOYEE BENEFITS:

Retirement benefits in the form of contribution to provident fund are charged to the statement of profit and loss on accrual basis and deposited in employees provident fund account administered by the Central Government.

The Company has not made any provision for Gratuity as none of the employees have completed qualified period of Service.

N. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

i. Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

ii. Contingent liabilities are not recognized but are disclosed in the notes.

iii. Contingent assets are neither recognized nor disclosed in the financial statements.

O. FOREIGN CURRENCY TRANSACTIONS:

i. Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise.

ii. In respect of forward exchange contracts, the difference between the forward rate and the exchange rate at the inception of contract is recognized as income or expense over the period of the contract.

iii. Gains or losses on cancellation/settlement of forward exchange contracts are recognized as income or expense.

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Mar 31, 2010

1. BASIS OF ACCOUNTING

The Financial Statements are prepared on accruals basis following the historical cost convention in accordance with generally accepted accounting principles (GAAP), in compliance with the provisions of the Companies Act, 1956 and with the accounting standards prescribed by the ICAI. Revenue are recognized and expenses are accounted on their accrual.

2. USE OF ESTIMATES

The presentation of financial statements requires certain estimates and assumptions. These estimations and assumptions affect the reported amount of assets and liabilities on date of the financial statement and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are knows/materialized.

3. FIXED ASSETS AND DEPRECIATION i) Tangible Assets:

Fixed Assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and impairment losses. Cost of acquisition comprises all costs incurred to being the assets to their location and working condition up to the date the assets are put to use. Costs of construction are composed of those costs that relate directly to specific assets and those that are attributable to the construction activity in general and can be allotted to the specific assets up to the date the asset are put to use. The expenditure incurred during the period of construction is debited to the capital work-in-progress and on completion the costs are allotted to the respective fixed assets.

Depreciation on fixed assets is provided on straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956.

ii) Intangible Assets:

Intangible Assets are stated at their cost of acquisition less accumulated amortization and impairment losses. An asset is recognized, where it is probable that the future economic benefits attributable to the assets will flow to the enterprises and where its cost can be reliably measured. Specified software purchased is amortized over a period of three years.

4. INVESTMENT

Investments are classified as current or long-term in accordance with Accounting Standard 13 on "Accounting for Investments".

Current investments are stated at lower of cost and fair value. Any reduction in the carrying amount and any reversals of such reductions are charged or credited to the profit and loss account. Long-Term Investments are stated at cost. Provision for diminution is made to recognize a decline, other than temporary, in the value of such investments.

5. INVENTORIES

Finished goods and work-in-process are valued at lower of cost or net realizable value. Cost comprises of material, labor, power, depreciation and appropriate portion of overheads incurred in bringing the inventories to their present location and condition. Raw material, material in transit, stores and spares and packing materials are valued at cost (Net of input credits) or net realizable value whichever is lower.

6. EMPLOYEE BENEFITS

a) Retirement benefits in the form of contribution to provident fund are charged to profit & loss account on accrual basis and deposited in employees provident fund account administered by the central government.

b) Gratuity liability under the payment of gratuity act is accounted on accrual basis.

7. BORROWING COST

Borrowing cost that are attributable to the construction/acquisition of manufacturing plant and other related facilities capitalized as a part of the cost of these capitalized assets till the date of completion of physical construction/mechanical completion of the plant.

8. REVENUE RECOGNITION

Revenue from sale of products is recognized when the significant risk and rewards of ownership of the goods have passed to the buyer and there is no uncertainty regarding the amount of consid- eration or collectability. Applicable subsidy on sale is included in the sales account. Other items of income are accounted as and when the right to receive arises.

9. TAXES ON INCOME

Current tax is determined as the amount of tax payable on taxable income for the year. Deferred tax are recognized on the basis of timing difference between the taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent year.

10. CASH FLOW STATEMENT

The cash flow statement is prepared by the indirect method set out in accounting standard 3 on cash flow statements and presents the cash flows by operating investing and financing activities of the Company. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and demand deposits with banks.

11. PROVISIONS AND CONTINGENCIES

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Contingent liabilities are not recognized, but are disclosed in the notes. Contingent assets are not recognized, but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

12. NET PROFIT FOR THE PERIOD AND PRIOR PERIOD ITEM

a) All items of income and expenses pertaining to the year are included in arriving at the net profit for the year unless specifically mentioned elsewhere in the financial statements or as required by accounting standards.

b) Prior period items are disclosed separately in the profit and loss account.