Accounting Policies of Alfa Ica (India) Ltd. Company

Mar 31, 2024

1. Company overview

Alfa Ica (India) Limited (the Company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on Bombay Stock Exchange (BSE). The registered office of the Company is located at1-4, Uma Industrial Estate, Village Vasana- Iyawa,Tal. Sanand, Dist. Ahmedabad, Gujarat.

The Company''s principal activity is to manufacture and market decorative laminate sheets.

2. Basis of preparation

i. Compliance with Ind AS

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The financial statements are presented in Indian Rupee (''INR'') which is also the functional and presentation currency of the company.

ii. Historical cost convention

The financial statements have been prepared on a historical cost basis.

iii. Use of estimates

In preparing the financial statements in conformity with accounting principles, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of financial statements and the amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Any revision to such estimates is recognised in the period the same is determined.

3. Revenue recognition

Revenue is recognised at the fair value of the consideration received or receivable. The amount disclosed as revenue is inclusive of excise duty and net of returns, trade discounts. The company recognizes revenue when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity.

Sale of products

Timing of recognition- Revenue from sale of products is recognised when significant risks and rewards in respect of ownership of products are transferred to customers based on the terms of sale.

Measurement of revenue- Revenue from sales is based on the price specified in the sales contracts, net of all discounts and returns at the time of sale.

Revenue from interest is recognized on accrual basis.

4. Foreign currency translation

i. Presentation Currency

The functional currency of the company is Indian rupee. These financial statements are presented in Indian rupee.

ii. Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss.

5. Property, plant and equipment

Tangible fixed assets are carried at cost of acquisition less accumulated depreciation. The cost of an item of tangible fixed asset comprises its purchase price, including import duties and others non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. Tangible fixed assets under construction are disclosed as capital work in progress.

Recognition:

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:

(a) it is probable that future economic benefits associated with the item will flow to the entity; and

(b) the cost of the item can be measured reliably.

Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of profit and loss when the asset is derecognized.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

6. Intangible assets

Intangible assets are stated at cost less accumulated amortisation and net of impairments, if any. An intangible asset is recognized if it is probable that the expected future economic benefits that are attributable to the asset will flow to the company and its cost can be measured reliably. Intangible assets are amortised on straight line basis over their estimated useful lives.

7. Depreciationand amortization expenses

Depreciation on tangible fixed assets and amortisation of intangible fixed assets is provided on the straight line method, as per useful life prescribed in Schedule II to the Companies Act, 2013.

Depreciation on additions is provided on a pro-rata basis from the month of acquisition/installation. Depreciation on sale/deduction from fixed assets is provided for upto the date of sale/adjustment, as the case may be.

8. Income tax

Income tax expense represents the sum of current and deferred tax (including MAT). Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Balance sheet and the corresponding tax bases used in the computation of taxable profit and are accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, carry forward tax losses and allowances can be utilised. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set and presented as net.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available against which the temporary differences can be utilised.

Credit of MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the profit and loss account and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.

9. Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of respective assets during the period of time that is required to complete and prepare the asset for its intended use. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other borrowing costs are expensed in the period in which they are incurred.

10. Inventories

Raw materials and stores, work-in-progress, traded and finished goods are stated at the lower of cost and net realizable value. Cost of raw materials and traded goods comprise of cost of purchase. Cost of work-in-progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the later being allocated on the basis of normal operating capacity. Cost of inventories also includes all other cost incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

11. Cash and cash equivalents

The Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with a maturity period of three months or less from the balance sheet date, which are subject to an insignificant risk of changes in value.

12. Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

13. Government grants

Grants from the government are recognised at fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.

Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs they are intended to compensate and presented within other income.

Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit and loss on a straight line basis over the expected lives of the related assets and presented within other income.

The benefit of a government loan at below current market rate of interest is treated as a government grant.

14. Provisions, contingent liabilities and contingent assets

A provision is recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources in respect of which a reliable estimate can be made. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Financial Statements. Contingent assets are not recognised.

15. Employee benefits Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet. Post-employment obligations (a) Defined benefit plans Gratuity obligations

The liability in respect of Gratuity is determined based on the actuarial valuation done by Actuary as at Balance Sheet dated in context of the Ind AS 19 following Projected Unit Credit Method. The gratuity plan in unfunded and the Company will pay gratuity as and when it becomes due. The obligation is

measured at the present value of the estimated future cash flows. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

Leave encashment on termination of service

Benefits under the Company''s leave encashment constitute other employee benefits. The liability in respect of leave encashment is provided on the basis of an actuarial valuation done by an independent actuary at the year end. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss. It is unfunded plan.

(b) Defined contribution plans Provident Fund

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.

16. Earnings per share

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value.

17. Financial instruments

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

(i) Initial recognition and measurement

On initial recognition, all the financial assets and liabilities are recognized at its fair value plus or minus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability except financial asset or financial liability measured at fair value through profit or loss. Transaction costs of financial assets and liabilities carried at fair value through the Profit and Loss are immediately recognized in the Statement of Profit and Loss.

(ii) Subsequent measurement

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 (FVTOCI)

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 (FVTPL)

A financial asset is measured at fair value through profit and loss unless it is measured at amortized cost or at fair value through other comprehensive income.

Financial liabilities

The financial liabilities are subsequently carried at amortized 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.

18. Impairment of assets

(i) Financial assets

The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in statement of profit or loss.

(ii) Non-financial assets

The carrying amounts of assets are reviewed at each balance sheet date in accordance with Ind AS 36 ''Impairment of Assets'', to determine whether there is any indication of impairment. If any such indication exists, the asset''s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in the Statement of Profit and Loss. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortisation, if no impairment loss had been recognised.

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Mar 31, 2015

I Basis of Preparation of Financial Statements

The financial statements are prepared and presented under the historical cost convention on an accrual basis of accounting in accordance with generally accepted accounting principles in India and are to comply with the applicable accounting standards notified under section 133 of the Companies Act, 2013. The accounting policies have been consistently applied unless otherwise stated.

ii Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of incomes and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which results are known or materialised.

iii. Valution of Inventories

The inventory has been valued as under :

(a) Raw materials, stores and spares are valued at cost.

(b) Work in progress and finished goods are valued at lower of cost and net realisable value.

iv. Depreciation

Depreciation on fixed assets is provided on Stright line method as per schedule II of the Companies Act, 2013 on the basis of period for which assets used in reporting period. Necessary amounts have been adjusted against surplus to comply with provisions of Schedule II of the Act.

v. Revenue Recognition

Sale of goods is recognised at the point of dispatch of finished goods to the customers. Sale is inclusive of excise duty and VAT. Export incentives are accounted for in the year of exports based on eligibility and when there is no uncertainity in receiving the same. Interest income is recognised on time proportion basis.

vi. Fixed Assets

Fixed assets are recognised at cost of acquisition including expenditure up to the date of commissioning, net of CENVAT or VAT less accumulated depreciation, amortisation and impairment loss. The cost of fixed assets not ready for their intended use before balance sheet date are disclosed under capital work-in-progress.

vii. Government Grants

Government grants for Project Capital Subsidy are credited to Capital Reserve.

viii. Foreign Currency Transaction

(a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of transaction.

(b) Any income or expense on account of exchange difference either on settlement or on traslations recognised in the statement of profit and loss except fixed assets acquisition in which they are adjusted to the carrying cost of such assets.

ix. Investments

Investments are classified as long term or current based on management intention at the time of purchase. Long term quoted investments are stated at cost after deducting provisions made, if any for permanent dimunitions i.e. other than temporary dimunition in value. Long term unquoted investments are stated at cost of acquisition. Current Investments are stated at lower of cost and fair value.

x. Retirement Benefits

Liability for gratuity is accounted on cash basis. The company does not provide for gratuity payable to employees as per the provisions of AS-15, "Employee Benefits"

xi. Borrowing Costs

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to acquisition or construction of qualifying assets are capitalised up to the date when such fixed assets are ready for their intended use and all other borrowing costs are charged to statement of profit and loss.

xii. Provision for taxation

Provision for income tax for the current year is based on the estimated taxable income for the period in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax resulting from "timing difference" between book and taxable income is accounted for using tax rated and tax laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised only to the extent that there is a reasonable certainity that the future taxable profit will be available against which the deferred tax assets can be realised.

xiii. Provisions and contingencies

A provision is recognised when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the balance sheet date.

Contingent liabilities are not recognised but are disclosed as a part of notes to accounts. Contingent assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2014

I. Basis of preparation of Financial Statements:

The financial statements are prepared and presented under the historical cost convention on an accrual basis of accounting in accordance with generally accepted accounting principles in India and are to comply with the applicable accounting standards notified under Section 211 (3C) of the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 read with the general circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of the Companies Act,2013. The accounting policies have been consistently applied unless otherwise stated.

ii. Use of Estimates:

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of incomes and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known or materialise.

iii. Valuation of Inventories:

The Inventory has been valued as under:

a) Raw Materials, Stores and Spares are valued at cost.

b) Work in progress and finished goods are valued at lower of cost and net realisable value.

iv. Depreciation:

Depreciation on Fixed Assets is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on full year basis.

v. Revenue Recognition:

Sale of goods is recognized at the point of dispatch of finished goods to the customers. Sale is inclusive of excise duty and VAT. Export incentives are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same. Interest income is recognised on time proportion basis.

vi. Fixed Assets

Fixed assets are recognized at cost of acquisition including expenditure up to the date of commissioning, net of Cenvat or VAT less accumulated depreciation, amortization and impairment loss. The costs of fixed assets not ready for their intended use before balance sheet date are disclosed under capital work-in-progress.

vii. Government Grants:

Government grants for Project Capital Subsidy are credited to Capital Reserve.

viii. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of transaction.

b) Any income or expense on account of exchange difference either on settlement or on translations recognised in the statement of Profit and Loss except Fixed Assets acquisition in which they are adjusted to the carrying cost of such assets.

ix. Investments:

Investments are classified as long term or current based on management intention at the time of purchase. Long Term Quoted Investments are stated at cost after deducting provisions made, if any, for permanent diminutions i.e. other than temporary diminution in value. Long Term Unquoted Investments are stated at cost of acquisition. Current Investments are stated at lower of cost and fair value.

x. Retirement Benefits:

Liability for Gratuity is accounted on cash basis.

xi. Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to acquisition or construction of qualifying assets are capitalised up to the date when such fixed assets are ready for their intended use and all other borrowing costs are charged to statement of Profit and Loss.

xii. Provision for Taxation:

Provision for Income tax for the current year is based on the estimated taxable income for the period in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax resulting from "timing difference" between book and taxable profit is accounted for using tax rates & tax laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized only to the extent that there is a reasonable certainty that the future taxable profit will be available against which the deferred tax assets can be realized.

xiii. Provisions and Contingencies:

A provision is recognised when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance sheet date.

Contingent Liabilities are not recognised but are disclosed as a part of notes to accounts. Contingent Assets are neither recognised nor disclosed, in the financial statements.

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Mar 31, 2013

I. Basis of preparation of Financial Statements:

The financial statements are prepared and presented under the historical cost convention on an accrual basis of accounting in accordance with generally accepted accounting principles in India and are to comply with the applicable accounting standards notified under Section 211 (3C) of the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied unless otherwise stated.

ii. Use of Estimates:

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of incomes and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known or materialise.

iii. Valuation of Inventories:

The Inventory has been valued as under:

a) Raw Materials, Stores and Spares are valued at cost.

b) Work in progress and finished goods are valued at lower of cost and net realisable value.

iv. Depreciation:

Depreciation on Fixed Assets is provided on Straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on full year basis.

v. Revenue Recognition:

Sale of goods is recognized at the point of dispatch of finished goods to the customers. Sale is inclusive of excise duty and VAT. Export incentives are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same. Interest income is recognised on time proportion basis.

vi. Fixed Assets

Fixed assets are recognized at cost of acquisition including expenditure up to the date of commissioning, net of Cenvat or VAT less accumulated depreciation, amortization and impairment loss. The costs of fixed assets not ready for their intended use before balance sheet date are disclosed under capital work-in-progress.

vii. Government Grants:

Government grants for Project Capital Subsidy are credited to Capital Reserve. viii. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of transaction.

b) Any income or expense on account of exchange difference either on settlement or on translations recognised in the statement of Profit and Loss except Fixed Assets acquisition in which they are adjusted to the carrying cost of such assets.

ix. Investments:

Investments are classified as long term or current based on management intention at the time of purchase. Long Term Quoted Investments are stated at cost after deducting provisions made, if any, for permanent diminutions i.e. other than temporary diminution in value. Long Term Unquoted Investments are stated at cost of acquisition. Current Investments are stated at lower of cost and fair value.

x. Retirement Benefits:

Liability for Gratuity is accounted on cash basis.

xi. Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to acquisition or construction of qualifying assets are capitalised up to the date when such fixed assets are ready for their intended use and all other borrowing costs are charged to statement of Profit and Loss.

xii. Provision for Taxation:

Provision for Income tax for the current year is based on the estimated taxable income for the period in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax resulting from "timing difference" between book and taxable profit is accounted for using tax rates & tax laws that have been enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized only to the extent that there is a reasonable certainty that the future taxable profit will be available against which the deferred tax assets can be realized.

xiii. Provisions and Contingencies:

A provision is recognised when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance sheet date.

Contingent Liabilities are not recognised but are disclosed as a part of notes to accounts. Contingent Assets are neither recognised nor disclosed, in the financial statements.

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Mar 31, 2011

1. Basis of preparation of Financial Statements:

The financial statements have been prepared and presented on an accrual basis under the historical cost convention and in accordance with the applicable accounting standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. The accounting policies have been consistently applied unless otherwise stated.

2. Use of Estimates:

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities as at the date of the financial statements and the reported amounts of incomes and expenses during the year. Difference between the actual results and estimates are recognised in the period in which the results are known.

3. Valuation of Inventories:

The Inventory has been valued as under:

a) Raw Materials, Stores and Spares are valued at cost.

b) Work in progress includes cost of conversion and other costs incurred in bringing the inventories to their present location and conditions.

c) Finished goods are valued at lower of cost and Net Realizable Value.

4. Depreciation:

Depreciation on Fixed Assets is provided on straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on full year basis.

5. Revenue Recognition:

a) Sales are recognised on dispatch of goods to customers and represents amount invoiced, inclusive of excise duty and sales tax.

b) To account for all purchases exclusive of excise duty, as duty paid on all inputs is monitored through a distinct account.

c) Insurance claims are accounted for as and when admitted by the appropriate authorities.

d) The benefits in respect of Advance Licenses/ Credit in Pass Book scheme received by the Company against export made by it are recognised as and when goods are imported against them or the Advance Licenses are sold, as the case may be.

e) Interest income is recognised on time proportion basis.

6. Fixed Assets

a) Fixed Assets are stated at cost less accumulated depreciation. Costs include all expenses incurred to bring the assets to its present location and conditions.

b) The Company availed CENVAT benefit on Fixed Assets.

c) Machinery spares which are specific to particular item of fixed assets and whose use is irregular are capitalized as part of the cost of machinery.

d) Fixed assets are eliminated from financial statements on disposal. The Capitalised cost of such disposed assets are removed from the fixed asset records.

e) Expenditure during the construction period is included under Capital Work in Progress and the same is allocated to the respective fixed assets on the completion of its construction.

7. Government Grants:

Government grants for Project Capital Subsidy are credited to Capital Reserve.

8. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of transaction.

b) Any income or expense on account of exchange difference either on settlement or on translations recognised in the Profit and Loss Account except Fixed Assets acquisition in which they are adjusted to the carrying cost of such assets.

9. Investments:

Investments are classified as long term or current based on management intention at the time of purchase.

Long Term Quoted Investments are stated at cost after deducting provisions made, if any, for permanent diminutions i.e. other than temporary diminution in value.

Long Term Unquoted Investments are stated at cost of acquisition.

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

10. Retirement Benefits:

Liability for Gratuity is accounted on cash basis.

11. Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to acquisition or construction of qualifying assets are capitalized up to the date when such fixed assets are ready for their intended use and all other borrowing costs are charged to Profit and Loss Account.

12. Provision for Taxation:

Provision for Income tax for the current year is based on the estimated taxable income for the period in accordance with the provisions of the Income Tax Act, 1961.

The Deferred Tax resulting from timing difference between book and taxable profit is accounted for using tax rates & tax laws that have been enacted or substantively enacted as at the Balance Sheet date.

13. Provisions and Contingencies:

A provision is recognised when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance sheet date.

Contingent Liabilities are not recognised but are disclosed as a part of notes to accounts. Contingent Assets are neither recognised nor disclosed, in the financial statements.

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Mar 31, 2010

1. Basis of preparation of Financial Statements:

The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) in India and comply in all material aspects with the Accounting Standards (AS) notified under the Companies (Accounting Standards) Rules, 2006 (as amended), other pronouncements of Institute of Chartered Accountants of India, the relevant provisions of the Companies Act, 1956.

2. Use of Estimates:

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities as at the date of the financial statements and the reported amounts of incomes and expenses during the year. Difference between the actual results and estimates are recognised in the period in which the results are known.

3. Valuation of Inventories:

The Inventory has been valued as under:

a) Raw Materials, Stores and Spares are valued at cost.

b) Work in progress includes cost of conversion and other costs incurred in bringing the inventories to their present location and conditions.

c) Finished goods are valued at lower of cost and Net Realisable Value.

4. Depreciation:

Depreciation on Fixed Assets is provided on straight Line method at the rates specified in Schedule XIV of the Companies Act, 1956 on full year basis.

5. Revenue Recognition:

a) Sales are recognised on dispatch of goods to customers and represents amount invoiced, inclusive of excise duty sales tax.

b) To account for all purchases exclusive of excise duty, as duty paid on all inputs is monitored through a distinct account.

c) Insurance claims are accounted for as and when admitted by the appropriate authorities.

d) The benefits in respect of Advance Licenses/ Credit in Pass Book scheme received by the Company against export made by it are recognised as and when goods are imported against them or the Advance Licenses are sold, as the case may be.

e) Interest income is recognised on time proportion basis.

6. Fixed Assets:

a) Fixed Assets are stated at cost less accumulated depreciation. Costs include all expenses incurred to bring the assets to its present location and conditions.

b) The Company availed CENVAT benefit on Fixed Assets.

c) Machinery spares which are specific to particular item of fixed assets and whose use is irregular are capitalised as part of the cost of machinery.

d) Fixed assets are eliminated from financial statements on disposal. The Capitalised cost of such assets disposed assets are removed from the fixed asset records.

e) Expenditure during the construction period is included under Capital Work in Progress and the same is allocated to the respective fixed assets on the completion of its construction.

7. Government Grants:

Government grants for Project Capital Subsidy are credited to Capital Reserve.

8. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date transaction.

b) Any income or expense on account of exchange difference either on settlement or on translations recognised in the Profit and Loss Account except Fixed Assets acquisition in which they are adjusted to the carrying cost of such assets.

9. Investments:

Investments are classified as long term or current based on management intention at the time of purchase. Long Term Quoted Investments are stated at cost after deducting provisions made, if any, for permanent diminutions i.e. other than temporary diminution in value.

Long Term Unquoted Investments are stated at cost of acquisition. Current Investments are stated at lower of cost and fair value.

10. Retirement Benefits:

Liability for Gratuity is accounted on cash basis.

11. Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to acquisition or construction of qualifying assets are capitalised upto the date when such fixed assets are ready for their intended use and all other borrowing costs are charged to Profit and Loss Account.

12. Provision for Taxation:

Provision for Income tax and fringe benefit tax for the current year is based on the estimated taxable income for the period in accordance with the provisions of the Income Tax Act, 1961.

The Deferred Tax resulting from timing difference between book and taxable profit is accounted for using tax rates & tax laws that have been enacted or substantively enacted as at the Balance Sheet date.

13. Provisions and Contingencies:

A provision is recognised when there is a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance sheet date.

Contingent Liabilities are not recognised but are disclosed as a part of notes to accounts. Contingent Assets are neither recognised nor disclosed, in the financial statements.