Accounting Policies of Garg Furnace Ltd. Company

Mar 31, 2025

2. A. Material accounting policies / critical accounting estimates and judgements

I. Statement of Compliance

The financial statements of the company have been prepared in accordance with the Indian
Accounting Standards (“IND AS”) specified under section 133 of the Companies Act, 2013 (‘‘the
Act”) read with the Companies (Indian Accounting Standard) Rules, 2015, as amended from
time to time. The financial statements have been prepared on going concern basis and all the
applicable Ind AS effective as on the reporting date have been complied with.

II. Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention on accrual
basis except for certain financial instruments which are measured at fair value.

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

III. Functional and presentation currency

The functional currency of the company is Indian rupee (INR). The financial statements are
presented in Indian rupees (INR) and all values are rounded to nearest lakh up to two decimals,
unless otherwise stated.

IV. Use of estimates and judgements

The preparation of financial statements, in conformity with Ind AS requires management to
make estimates, judgements and assumptions. These estimates, judgements and assumptions
affect the application of accounting policies and the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the period. The application of accounting policies that
require critical accounting estimates involving complex and subjective judgements and use of
assumptions in these financial statements have been disclosed in notes. Accounting estimates
could change from period to period. Actual results could differ from those estimates. Appropriate
changes in estimates are made as management become aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the financial statements in the
period in which changes are made, and if material, their effects are disclosed in the notes to the
financial statements.

V. Current versus Non- current classification

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

An asset is treated as current when it is:

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

a. Held primarily for the purpose of trading.

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

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

All other assets are classified as non-current.

A Liability is treated as current when:

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

b. It is held primarily for the purpose of trading.

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

d. There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period.

The company classifies all other liabilities as non-current.

VI. Fair Value Measurement

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

(i) In the principal market for the asset or liability, or

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

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants act
in their economic best interest.

A fair value measurement of a non-fmancial asset takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use or by selling it
to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.

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

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

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

Level 3 —Inputs are not based on observable market data (unobservable inputs). Fair values are
determined in whole or in part using a valuation model based on assumptions that are neither
supported by prices from observable current market transactions in the same instrument nor are
they based on available market data.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period or each case.

For the purpose of fair value disclosures, the Company has determined classes of assets and
liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level
of the fair value hierarchy as explained above.

This note summarizes accounting policy for fair value. Other fair value related disclosures are
given in the relevant notes.

• Disclosures for valuation methods, significant estimates and assumptions

• Quantitative disclosures of fair value measurement hierarchy

• Investment in unquoted equity shares financial instruments

• Financial instruments

VII. Property, plant and equipment

All items of property, plant and equipment are stated at cost less accumulated depreciation and
impairment if any. Freehold land is stated at cost and not depreciated. The Cost of an item of
Property, Plant and Equipment comprises:

> Its purchase price net of recoverable taxes wherever applicable and any attributable expenditure
(directly or indirectly) for bringing the asset to its working condition for its intended use.

> Subsequent expenditures relating to property, plant and equipment is capitalized only when it is
probable that future economic benefits associated with these will flow to the Company and the
cost of the item can be measured reliably.

> Initial estimate of the costs of dismantling and removing the item and restoring the site on which
it is located, if any, the obligation for which an entity incurs either where the item is acquired or

as a consequence of having used the item during a particular period for purposes other than to
produce inventories during that period.

Depreciation on property, plant and equipment has been provided on the straight line method as
per the useful life prescribed in Schedule II to the Companies Act, 2013

Depreciation is calculated on pro-rata basis from the date of installation till the date the asset is
sold or discarded.

Advances paid towards the acquisition of property, plant and equipment outstanding at each
balance sheet date is classified as capital advances under other non-current assets and the cost of
assets not put to use before such date are disclosed under Capital work-in-progress. The
depreciation method, useful lives and residual value are reviewed periodically and at the end of
each reporting period.

Vm. Intangible Assets

Intangible assets are stated at cost less accumulated amount of amortisation and impairment if
any. Intangible assets are amortised over their respective individual estimated useful lives on a
straight line basis, from the date that they are available for use. The estimated useful life of an
identifiable intangible asset is based on a number of factors including the effects of obsolescence
etc. The amortization method, estimated useful lives are reviewed periodically and at end of each
reporting period.

IX. Impairment of Non-financial assets

The impairment assessment for all assets is made at each porting date to determine whether
there is an indication that previously recognised impairment losses no longer exist or have
decreased. If such indication exists, the Company estimates the assets or CGU’s recoverable
amount. A previously recognised impairment loss is reversed only if there has been a change in
the assumptions used to determine the asset’s recoverable amount since the last impairment loss
was recognised. The reversal is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal
is recognised in the statement of profit or loss.

X. Inventories

Raw materials and stores, work in progress, traded and finished goods are stated at the lower of
cost and net realisable value. Cost of raw materials and stores is computed on FIFO basis plus
direct expenditure, Cost of work in progress and finished goods comprises direct materials,
direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating capacity. Cost of inventories also include all
other costs incurred in bringing the inventories to their present location and condition. Costs of
purchased inventory are determined after deducting rebates and discounts. 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.

XI. Borrowing costs

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

Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expense in the period in which they are incurred.

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Mar 31, 2024

vt¥ Provisions. Contingent liabilities and Contingent Assets

Provisions are revised when the Company has a present legal or constructs obligation as a result of past event

it is probable that ^outflow of resources will be required to settle the obligation and the amount can be^j^ . ^

estimated. Provisions are not recognised for future operating losses. ''w

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Provisions are measured at the present value of management’s best estimate of the expenditure require

present obligation at the end of the reporting period. A present obligation that arises from past events we neither probable that an outflow of resources will be required to settle nor a reliable estimate of the amount be made, is disclosed as a contingent liability. Contingent liabilities are also disclosed when there p obligation arising from past events, the existence of which will be confirmed only by the occurrence occurrence of one or more uncertain future events not wholly within the control of the Company. Conting are not recognised in financial statements since this may result in the recognition of income that may realised. However, when the realisation of income is virtually certain, then the related asset is not a continge and is recognised.

XIII. Foreign currency translation

Items included in the financial statements of each of the Company"s entities are measured using e curre cy primary economic environment in which die entity operates ("the functional currency"). The financial state presented in Indian rupee (INR), which is Garg Furnace Limited functional and presentation currency.

Foreign currency translations 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 e translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.

XIV. Revenue recognition ..

The Company has adopted Indian Accounting Standard 115 (Ind AS 115) - "Revenue from contracts with

customers’.

Revenue from sale of products is recognized upon transfer of control to customers. Revenue is measured at the amount of consideration which the Company expects to be entided to in exchange for transferring distinct goods to a customer as specified in a contract, excluding amounts collected on behalf of third parties (for example, notes and duties collected on behalf of the Government). A receivable is recognized upon satisfaction of performance

obligations as per the Contracts.

"To determine whether to recognise revenue, the Company follows a 5-step process:

1. Identifying the contract with a customer

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the performance obligations

5. Recognising revenue when/as performance obligation® are satisfied.

Use of significant Judgement* in Revenue Recognition

ludgemen! is required to determine the transaction price for the contract The transaction price could be either a fixed amount of consideration or variable consideration with elements such as volume discounts, price concessions, incentives etc The estimated amount of variable consideration is adjusted in the transaction pace only to the extent that is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and

is reassessed at the end of each reporting period.

The Company assesses its revenue arrangements against specific recognition criteria’s like exposure to the significant risks and rewards associated with the sale of goods. When deciding the most appropriate basis for presenting revenue or costs of revenue, both the legal form and substance of the agreement between the Company and its customers are reviewed to determine each party’s respective role in the transaction.

Other Operating Revenue

Dividend income is recognized when the right to receive payment is established.

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

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Claims receivables on account of insurance are accounted for to the extent the Company is reasonably certain of their ultimate collection.

XV. Income Tax

Income tax expense represents the sum of the tax currendy payable and deferred tax.

Current tax

The tax currendy payable is based on taxable profit for the period. Taxable profit differs from ''profit before tax as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the period

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the income taxes are also recognised in other comprehensive income or directly in equity respectively.

XVI. Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash in hand, demand deposits held with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.

XVII. Financial instruments

Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments.

Initial Recognition:

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are added to or deducted &om the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in Statement of Profit and Loss.

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Classification and Subsequent Measurement Financial Assets _ya]ue ^ugh other

TT>e Company classifies financial assets as subsequently the te^of following:

comprehensive income (“FVOCI”) or fair value through profit or loss f FVTF )

• The entity’s business model for managing the financial assets and

• The contractual cash flow characteristics of the financial asset

Amortised Cost: .

A financial asset shall be classified and measured at amortised cost if both of the following conditions are met

• The financial asset is held within a business model whose objective is to hold financial assets in o

collect contractual cash flows and . .

• The contractual terms of the financial asset give rise on specified dates to cash flows at are so y payments of principal and interest on the principal amount outstanding.

Fair Value through OCI: . •

A financial asset shall be classified and measured at fair value through OCI if both of the following conditions are

. The fin.nri.1 asset 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.

Fair Value through Profit or Loss:

A finonri,! asset shall be classified and measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through OCI.

All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.

Classification and Subsequent Measurement: Financial liabilities:

Financial liabilities are classified as either financial liabilities at FVTPL or ‘other financial liabilities .

Financial Liabilities at FVTPL:

Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL:

Gains or Losses on liabilities held for trading are recognized in the Statement of Profit and Loss.

Impairment of financial assets:

Financial assets, other than those at FVTPL, ate assessed for indicators of impairment at the end of each reporting period. The Company assesses on a forward looking basis the expected credit losses associated with its assets. The impairment- methodology applied depends on whether there has been a significant increase in credit risk.

In case of trade receivables, the Company follows the simplified approach permitted by Ind AS 109 - Financial Instruments for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.

Derecognition of financial instruments:

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognizes a collateralized borrowing for the proceeds received.

A financial liability is derecognized when the obligation specified in the contract is discharged or canceUe''d^;or^xpifes

XVIII. Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

XIX. Employee benefits

(i) Short term obligations

Liabilities for wages and salaries, short term compensated absence and ex-gratia 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 benefits obligations in the balance sheet.

(ii) Post-employment obligations

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligations at the end of the reporting period less the fair value of plan assets (if any). The defined benefit obligation is calculated annually as per Valuation report given by Actuary on the basis of Guidance issued by The Actuarial Society of India.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expenses in the statement of profit or loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost

(iii) Defined contribution plans

The Company pays provident fund contributions to publicly administered provident funds as per local regulations.

The Company has not further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due.

XX Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker [CODM]. The managing committee is considered to be the ‘Chief Operating Decision Maker’

(CODM) as defined in IND AS 108. The Operating Segment is the level at which discrete financial information is available. The CODM allocates resources and assess performance at this level. In the context of Ind AS 108 on ''Segment Reporting'', the results are considered to constitute a single reportable entity/ business segment for which the operating results are regularly reviewed by the company''s Chief Operating Decision Maker.

XX3. Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability,becomes:^ payable on demand on the reporting date, the entity does not classify the liability as current, if the lende^ee^Jfi^\

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XXII. Earning* per share

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weighKdav^ige -b. of oqoit, d»cedingdomg the feual ,«*,fbc bo«o> dcm in equity shares issued during the year and excluding treasury shares

(if) Diluted earnings per share , .

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to

into account , . . .

. The after income tax effect of interest and other financing costs associated with dilutive potential equity

shares, and

. The weighted average number of additional equity shares that would been outstanding assuming the conversion of all dilutive potential equity shares.

XXIII. Asset* Held for Sale;

Non-current assets or disposal groups comprising of assets and liabilities are classified as “held for sale when all o the following criteria’s are met (i) decision has been made to sell, (ii) the assets are available for immediate sale in its present condition, (iii) the assets are being actively marketed and (iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date.

Subsequendy, such non-current assets and disposal groups classified as held for sale are measured at the lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are not depreciated or amortised.

In view of the management, the current assets (financial & other) have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet

XXIV. Events occurring after balance sheet date

There are no major events which have occurred after the balance sheet date requiring disclosure in the financial statements.

(b) Basil of Fair value of Financial anew and liabilities

(i) Fair Value hierarchy

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40 Financial Risk Management

The financial assets of the company include investments, trade and other receivables and cash and bank balances that derive directly from its operations. The financial liabilities of the company include loans and borrowings, trade payables, and other payables, and the main purpose of these financial liabilities is to finance the day to day operations of the company.

The company is mainly exposed to the following risks that arise from financial instruments:

Q Market risk (u) liquidity risk (ui) Credit risk

The Company’s senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.

This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage these risks:

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise two types of risk: foreign currency risk and interest rate risk.

(a) Foreign currency risk

The company during the year is not exposed to any foreign currency risk as there are no dealings in foreign exchange

(b) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a Snancial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the nsk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates. The Company’s total long-term debt obligations (including current matum.es) as at 31st March, 2024 is ? 149.54 Lakhs (previous year 8 475.89 Lakhs) out of which are borrowings amounting to X 89 54 Lakhs (previous year ? 152.19 Lakhs) is interest bearing and with variable rate of Interest. The balance borrowings amounting to 7 60.00 Lakhs (previous year ? 323 71 Ukhsl is interest free loan repayable on demand. '' ''

(ii) Liquidity Riak

cash Dow that i> generated from operationi. _to maintain sufficient cash to meet the

The company motors it, nsk of .hostage of fund, to meet the financial liabilities using a liquidity planmng tool The company plan,

S⁰^ “rSoftSal maturities of the finandal liabilities of the company a. the end of each repotting period: _____

(iii) Credit Risk

bank, and financial institution, with high credit ratings assigned by credit rating agencies, is defined in accordance with this assessment

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Mar 31, 2023

Significant accounting policies

I. Statement of Compliance

The financial statements of the company have been prepared in accordance with the Indian Accounting Standards
(“IND AS”) specified under section 133 of the Companies Act, 2013 (“the Act”) read with the Companies (Indian
Accounting Standard) Rules, 2015, as amended from time to time. The financial statements have been prepared on
going concern basis and all the applicable Ind AS effective as on the reporting date have been complied with.

II. Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention on accrual basis except for certain
financial instruments which are measured at fair value.

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

III. Functional and presentation currency

The functional currency of the company is Indian rupee (INR). The financial statements are presented in Indian
rupees (INR) and all values are rounded to nearest lakh up to two decimals, unless otherwise stated.

IV. Use of estimates and judgements

The preparation of financial statements, in conformity with Ind AS requires management to make estimates,
judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting
policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date
of the financial statements and reported amounts of revenues and expenses during the period. The application of
accounting policies that require critical accounting estimates involving complex and subjective judgements and use of
assumptions in these financial statements have been disclosed in notes. Accounting estimates could change from
period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as
management become aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected
in the financial statements in the period in which changes are made, and if material, their effects are disclosed in the
notes to the financial statements.

V. Current versus Non- current classification

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

An asset is treated as current when it is:

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

a. Held primarily for the purpose of trading.

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

c. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve

months after the reporting period.

All other assets are classified as non-current.

A Liability is treated as current when:

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

b. It is held primarily for the purpose of trading.

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

d. There is no unconditional right to defer the settlement of the liability for at least twelve months after the

reporting period.

The company classifies all other liabilities as non-current.

VI. Fair Value Measurement

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

(i) In the principal market for the asset or liability, or

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

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs.

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

Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

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

Level 3 —Inputs are not based on observable market data (unobservable inputs). Fair values are determined in
whole or in part using a valuation model based on assumptions that are neither supported by prices from observable
current market transactions in the same instrument nor are they based on available market data.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period or each
case.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

This note summarizes accounting policy for fair value. Other fair value related disclosures are given in the relevant
notes.

• Disclosures for valuation methods, significant estimates and assumptions

• Quantitative disclosures of fair value measurement hierarchy

• Investment in unquoted equity shares financial instruments

• Financial instruments

VII. Property, plant and equipment

All items of property, plant and equipment are stated at cost less accumulated depreciation and impairment if any.
Freehold land is stated at cost and not depreciated. The Cost of an item of Property, Plant and Equipment comprises:

^ Its purchase price net of recoverable taxes wherever applicable and any attributable expenditure (directly or
indirectly) for bringing the asset to its working condition for its intended use.

^ Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable
that future economic benefits associated with these will flow to the Company and the cost of the item can
be measured reliably.

^ Initial estimate of the costs of dismantling and removing the item and restoring the site on which it is
located, if any, the obligation for which an entity incurs either where the item is acquired or as a
consequence of having used the item during a particular period for purposes other than to produce
inventories during that period.

Depreciation on property, plant and equipment has been provided on the straight line method as per the useful life
prescribed in Schedule II to the Companies Act, 2013

Depreciation is calculated on pro-rata basis from the date of installation till the date the asset is sold or discarded.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is
classified as capital advances under other non-current assets and the cost of assets not put to use before such date are
disclosed under Capital work-in-progress. The depreciation method, useful lives and residual value are reviewed
periodically and at the end of each reporting period.

VIII. Intangible Assets

Intangible assets are stated at cost less accumulated amount of amortisation and impairment if any. Intangible assets
are amortised over their respective individual estimated useful lives on a straight line basis, from the date that they are
available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including
the effects of obsolescence etc. The amortization method, estimated useful lives are reviewed periodically and at end of
each reporting period.

IX. Impairment of Non-financial assets

The impairment assessment for all assets is made at each reporting date to determine whether there is an indication
that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company
estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there
has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss
was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss.

X. Inventories

Raw materials and stores, work in progress, traded and finished goods are stated at the lower of cost and net realisable
value. Cost of raw materials and stores is computed on FIFO basis plus direct expenditure, Cost of work in progress
and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed
overhead expenditure, the latter being allocated on the basis of normal operating capacity. Cost of inventories also
include all other costs incurred in bringing the inventories to their present location and condition. Costs of purchased
inventory are determined after deducting rebates and discounts. 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.

XI. Borrowing costs

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

Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expense in
the period in which they are incurred.

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Mar 31, 2015

1.1 Basis of preparation of financial statements

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) .The Company has prepared these Financial Statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules 2006,(as amended) and the relevant provisions of Companies Act, 2013. Financial Statements have been prepared in accordance with historical cost convention on accrual basis.

The Accounting policies adopted in preparation of financial statements are consistent with those of previous year.

All assets and liabilities have been classified as current and non-current as per company's normal operating cycle and other criteria set out in Schedule III of Companies Act, 2013 .Based on nature of business company has ascertained its operating cycle as 12 months for purpose of current or non current classification of assets and liabilities.

1.2 Use of Estimates:

The presentation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which results are known/materialized.

1.3 Inventories

The inventories are valued at cost or net realizable value whichever is lower. The cost formula used in valuation of different categories is as under:-

i) For Raw-Material - FIFO Method

ii) For Stores & spares - FIFO Method for bought out items and weighted average material cost for inhouse manufactured items.

iii) For Work in Process & - Weighted Average Material Cost Finished Goods Plus Conversion Cost.

iv) For Goods in transit - At Cost plus expenses incurred up to their present condition and location

1.4 Depreciation

Depreciation on Fixed Assets has been provided on straight line method in terms of useful life of the assets specified in Schedule II of Companies Act, 2013

1.5 Investments

Long term Investments are carried at cost less provision, if any for diminution in value which is other than temporary, and Current Investment are carried at lower of cost and fair value.

1.6 Fixed Assets

All fixed assets are stated at cost of acquisition net off Cenvat & VAT including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

1.7 Revenue Recognition

Revenue on sale of products is recognised at the point of despatch of finished goods to the Customers.

1.8 Excise Duty

Excise Duty in respect of goods manufactured by the company is accounted for at the time of removal of goods from the factory for sale and/or captive consumption and provisions are made for finished goods lying in the factory at the year-end.

1.9 Employee's Retirement Benefits

a) Short Term Employee Benefits:

Short Term Employee Benefits are recognized as an expenses on an undiscounted basis in the profit and loss account of the year in which the related service is rendered.

b) Post Employment Benefits:

i) Defined Contribution Plans:

Provident fund:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is charged to the statement of profit and loss..

ii) Defined Benefit Plans Gratuity:

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

c) The actuarial gain/loss is recognized in statement of profit and loss.

1.10 FOREIGN CURRENCY TRANSACTIONS

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary foreign currency items outstanding at the year-end are restated into rupees at the rate of exchange prevailing on the balance sheet date except those covered by forward contracts.

(iii) Non monetary foreign currency items are carried at cost.

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

1.11 Accounting for Taxes on Income :

Current Taxes

Current Tax is determined as the amount of tax payable in respect of taxable income for period after considering tax allowances and exemptions.

Deferred Taxes

Deferred Tax is recognized, subject to consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more accounting period.

Minimum Alternate Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.12 Government Grants

Government Grants are recognised if it is certain that the grants will be received & the conditions attached thereto could reasonably be complied with.

1.13 Impairment of Assets.

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal and external factors an Impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing value,the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.14 Provisions - Contingent Liabilities & Contingent Assets

(i) Provisions involving substantial degree of estimate in measurement is recognized when there is a present obligation arising as a result of past events and it is probable that there will be an outflow of resource embodying economics benefits.

(ii) Contingent Liability is a possible obligation from past event, 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 enterprise or a present obligation that arises from past events but is not recognized because it is not probable that an outflow embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made. Such a liability is not recognized but is disclosed in the notes.

(iii) Contingent Assets are neither recognized nor disclosed in financial statements.

1.15 Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. There are no Dilutive Potential Shares outstanding during the period, so DEPS is same as BEPS.

1.16 Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset are capitalized as part of the cost of such assets. Qualifying assets is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

(e) The Company presently has one class of Equity Shares having par value of Rs 10 each,holders of Equity shares are entitled to one vote per share. In the Event of liquidation of company,the holders of Equity Shares will be entitled to receive any of the remaining assets of the company after distribution of all preferential amounts. The distribution will be proportion to the number of Equity Shares held by Shareholders

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Mar 31, 2013

1.1 Basis of preparation of financial statements

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in lndia(lndian GAAP).The company has prepared these Financial Statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules 2006,(as amended) and the relevant provisions of Companies Act 1956.Financial Statements have been prepared in accordance with historical cost convention on accrual basis.

The Accounting policies adopted in preparation of financial statements are consistent with those of previous year.

All assets and liabilities have been classified as current and non-current as per company''s normal operating cycle and other criteria set out in the Revised Schdule-VI of Companies Act 1956.Based on nature of business company has ascertained its operating cycle as 12 months for purpose of current or non current classification of assets and liabilities.

1.2 Use Of Estimates:

The presentation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which results are known/materialized.

1.4 Depreciation

Depreciation has been provided on straight-line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956.

1.5 Investments

Long term Investments are carried at cost less provision, if any for diminution in value which is other than temporary, and Current Investment are carried at lower of cost and fair value.

1.6 Fixed Assets

All fixed assets are stated at cost of acquisition net off Cenvat & VAT including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

1.7 Revenue Recognition

Revenue on sale of products is recognised at the point of despatch of finished goods to the Customers.

1.8 Excise Duty

Excise Duty in respect of goods manufactured by the company is accounted for at the time of removal of goods from the factory for sale and/or captive consumption and provisions are made for finished goods lying in the factory at the year-end.

1.9 Employee''s Retirement Benefits

a) Shoit Term Employee Benefits:

Short Term Employee Benefits are recognized as an expenses on an undiscounted basis in the profit and loss account of the year in which the related service is rendered.

b) Post Employment Benefits.

i) Defined Contribution Plans: Provident fund:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act. 1952 and is charged to the profit and loss account.

ii) Defined Benefit Plans Gratuity

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

c) The actuarial gain/loss is recognized in statement of profit and loss account.

1.10 FOREIGN CURRENCYTRANSACTIONS

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary foreign currency items outstanding at the year-end are restated into rupees at the rate of exchange

prevailing on the balance sheet date except those covered by forward contracts. (iii) Non monetary foreign currency items are carried at cost.

(iv) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit loss account

1.11 Accounting for Taxes on Income: Current Taxes

Current Tax is determined as the amount of tax payable in respect of taxable income For period after considering tax allowances and exemptions. Deferred Taxes

Deferred Tax is recognized, subject to consideration of prudence, on timing differences being the difference between taxable income and accounting income that Originate in one period and capable of reversal in one or more accounting period. Minimum Alternate Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.12 Government Grants

Government Grants are recognised if it is certain that the grants will be received & the conditions attached thereto could reasonably be complied with.

1.13 Impairment of Assets.

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal and external factors an Impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.The recoverable amount is greater of the asset''s net selling price and value in use. In assessing value.the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

1.14 Provisions and Contingent Liabilities

(i) Provisions involving substantial degree of estimate in measurement is recognized when there is a present obligation arising as a result of past events and it is probable that there will be an outflow of resource embodying economics benefits.

(ii) Contingent Liability is a possible obligation from past event, the existence of which will be confirmed only by the ccurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise or a present obligation that arises from past events but is not recognized because it is not probable that an outflow embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made. Such a liability is not recognized but is disclosed in the notes

1.15 Earning PerShare

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. There are no Dilutive Potential Shares outstanding during the period, so DEPS is same as BEPS.

1.16 Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset are capitalized as part of the cost of such assets. Qualifying assets is one that necessarily takes substantial period of time to get ready for its intended use All other borrowing costs are recognized as an expense in the period in which they are incurred.

1.17 Operating Leases

Assets acquired on leases whei in significant portion of risks and rewards Of ownership are retained by the lesser are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on Systematic basis over the term of lease.

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Mar 31, 2012

1.1 Basis of preparation of financial statements

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in lndia(lndian GAAP).The company has prepared these Financial Statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standard) Rules 2006,(as amended) and the relevant provisions of Companies Act 1956.Financial Statements have been prepared in accordance with historical cost convention on accrual basis.

The Accounting policies adopted in preparation of financial statements are consistent with those of previous year.

All assets and liabilities have been classified as current and non-current as per company's normal operating cycle and other criteria set out in the Revised Schdule-VI of Companies Act 1956.Based on nature of business company has ascertained its operating cycle as 12 months for purpose of current or non current classification of assets and liabilities.

1.2 Presentation and disclosure of financial statements

For the year ended 31" March 2012,the revised schedule notified under Companies Act 1956 has become applicable to company, for preparation and presentation of its financial statements. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements.However.it has significant impact on presentation and disclosures made In financial statements.The Company has also reclassified the previous yearfigures In accordance with the requirements applicable in current year.

1.3 Use Of Estimates:

The presentation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which results are known/materialized.

1.4 Inventories

The inventories are valued at cost or net realisable value whichever is lower. The cost formula used in valuation of different categories are as under:-

i) For Raw-Material - FIFO Method

ii) For Stores & spares - FIFO Method for boughtout items & weighted average material cost for inhouse manufactured items.

iii) For Work in Process & Finished Goods - Weighted Average Material Cost Plus Conversion Cost.

iv) For Goods in transit - At Cost plus expenses incurred up to their present condition and location.

1.5 Depreciation

Depreciation has been provided on straight-line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956.

1.6 Investments

Long term Investments are carried at cost less provision, if any for diminution in value which is otherthan temporary, and Current Investment are carried at lower of costand fairvalue.

1.7 Fixed Assets

All fixed assets are stated at cost of acquisition net off Cenvat & VAT including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

1.8 Revenue Recognition

Revenue on sale of products is recognised at the point of despatch of finished goods to the Customers.

1.9 Excise Duty

Excise Duty in respect of goods manufactured by the company is accounted for at the time of removal of goods from the factory for sale and/or captive consumption and provisions are made for finished goods lying in the factory at the year-end.

1.10 Employee's Retirement Benefits

a) Short Term Employee Benefits:

Short Term Employee Benefits are recognized as an expenses on an undiscounted basis in the profit and loss account of the year in which the related service is rendered.

b) Post Employment Benefits:

i) Defined Contribution Plans:

Provident fund:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is charged to the profit and loss account.

ii) Defined Benefit Plans Gratuity:

Provision for gratuity liability to employees is made on the basis of actuarial valuation as at the close of the year.

c) The actuarial gain/loss is recognized in statement of profit and loss account.

1.11 FOREIGN CURRENCY TRANSACTIONS

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary foreign currency items outstanding at the year-end are restated into rupees at the rate of exchange prevailing on the balance sheet date except those covered by forward contracts.

(iii) Non monetary foreign currency items are carried at cost.

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

1 Accounting for Taxes on income:

Current Taxes

Current Tax is determined as the amount of tax payable in respect of taxable income for p' od after considering tax allowances and exemptions.

Deferred Taxes

Deferred Tax is recognized, subject to consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one period and capable of reversal in one or more accounting period.

Minimun Alternate Tax

Minimum Alternative Tax credit is recognized as an asset only when & to the extent there is convincing evidence that the Company will pay normal tax during the specified period. Such asset is reviewed at each Balance Sheet date & the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

1.13 GovernmentGrants

Government Grants are recognised if it is certain that the grants will be received & the conditions attached thereto could reasonably be complied with.

1.14 Impairment of Assets.

At each balance sheet an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of account.

1.15 Provisions and Contingent Liabilities

(i) Provisions involving substantial degree of estimate in measurement is recognized when there is a present obligation arising as a result of past events and it is probable that there will be an outflow of resource embodying economics benefits.

(ii) Contingent Liability is a possible obligation from past event, 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 enterprise or a present obligation that arises from past events but is not recognized because it is not probable that an outflow embodying economic benefits will be required to settle the obligation or a reliable estimate of the amount of obligation cannot be made. Such a liability is not recognized but is disclosed in the notes.

1.16 Earning Per Share

Basic earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. There are no Dilutive Potential Shares outstanding during the period, so DEPS is same as BEPS.

1.17 Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction, or production of a qualifying asset are capitalized as part of the cost of such assets. Qualifying assets is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.