Accounting Policies of Haryana Leather Chemicals Ltd. Company

Mar 31, 2025

3) Significant accounting policies

3.1 Statement of Compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (''Ind AS'')
notified under section 133 of the Companies Act 2013, read together with the Companies (Indian Accounting
Standards) Rules, 2015.

3.2 Basis of preparation and presentation

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

Historical Cost is generally based on the fair value of the consideration given in exchange of goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability,
the Company taken into account the characteristics of the asset or liability if market participants would take
those characteristics into account when pricing the asset or liability at the measurement date.

3.3 Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for
returns, trade allowances for deduction, rebates, goods & service tax and amounts collected on behalf of third
parties.

Operating Income

Revenue from sale of manufactured products is recognized when all the significant risks and rewards of
ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects
Goods & Service Tax (GST) and other taxes on behalf of the government and, therefore, these are not economic
benefits flowing to the Company. Hence, they are excluded from revenue.

Interest income

Interest income is recognized on accrual basis.

3.4 Foreign currencies

Foreign Currency transactions are recorded at the exchange rate prevailing at the date of transaction and
monetary items denominated in foreign currency are restated at rates prevailing on the date of balance sheet.
The exchange fluctuation arising is shown as "Foreign Exchange Fluctuation Gain / (Loss)" in the statement
of profit and loss as per the requirement of Ind AS 21 "The Effects of Changes in Foreign Exchange Rates."

3.5 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added
to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

3.6 Government grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with
the conditions attaching to them and such grants can reasonably have a value placed upon them.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company
recognises as expenses the related costs for which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the
purpose of giving immediate financial support to the Company with no future related costs are recognized in
profit or loss in the period in which they become receivable.

3.7 Employee benefits

i) Retirement benefit costs and termination benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees
have rendered service entitling them to the contributions.

For defined benefit retirement benefit plans like provident fund and Employee State Insurance, the cost of
providing benefits is determined using the projected unit credit method, with actuarial valuations being
carried out at each Balance Sheet date.

Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance
sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.
Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings
and is not reclassified to the statement of profit and loss. Past service cost is recognized in the statement
of profit and loss in the period of a plan amendment.

Net interest is calculated by applying the discount rate at the beginning of the period to the net defined
benefit liability or asset.

Defined benefit costs are categorised as follows:

> service cost (including current service cost, past service cost, as well as gains and losses on curtailments
and settlements);

> net interest expense or income; and

> remeasurement

The company presents the first two components of defined benefit costs in the statement of profit and
loss in the line item ''Employee benefits expense'' and "Finance Cost" respectively. Curtailment gains and
losses are accounted for as past service costs.

The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in
the company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present
value of any economic benefits available in the form of refunds from the plans or reductions in future
contributions to the plans.

A liability for a termination benefit is recognized at the earlier of when the company can no longer

withdraw the offer of the termination benefit and when the company recognizes any related restructuring
costs.

ii) Short-term and other long-term employee benefits:

A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave
and sick leave in the period the related service is rendered at the undiscounted amount of the benefits
expected to be paid in exchange for that service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value
of the estimated future cash outflows expected to be made by the company in respect of services provided
by employees up to the reporting date.

iii) Contributions to provident fund

The Company makes contributions to statutory provident fund in accordance with Employees Provident
Fund and Miscellaneous Provisions Act, 1952. Provident Fund is a defined benefit scheme the contribution
of which is being deposited with "Employees Provident Fund Organisation"; such contribution to the
organisation additionally requires the Company to guarantee payment of interest at rates notified by the
Central Government from time to time, for which shortfall, if any has to be provided for as at the balance
sheet date.

3.8 Taxation

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

i) Current tax

The tax currently payable is based on taxable profit for the year. 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 current tax is calculated
using tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting
period.

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 and tax laws prevailing in the respective tax jurisdictions
where the Company operates.

ii) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets
are generally recognized for all deductible temporary differences to 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 recognized 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.

In the case of unused tax losses probability is evaluated considering factors like existence of sufficient
taxable temporary differences, convincing other evidence that sufficient taxable profit will be available. At
the end of each reporting period, the company reassess unrecognized deferred tax assets and, the company
recognizes a previously unrecognized Deferred Tax Asset to the extent that it has become probable that
future taxable profit will allow the Deferred Tax Asset to be recovered.

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 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 realized, 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.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off
current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the
same taxable company and the same taxation authority.

iii) Current and deferred tax for the year

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

3.9 Property, plant and equipment (PPE)

For transition to Ind AS, The Company has elected to continue with the carrying value of all of its PPE
recognized as of 01 April, 2016 (transition date) measured as per the previous GAAP and use that carrying
value as its deemed cost as of the transition date.

Land and Building held for use in the supply of goods or services, or for administrative purposes, are stated
in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Cost includes
professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company''s
accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment
when completed and ready for intended use. Depreciation of these assets, on the same basis as other property
assets, commences when the assets are ready for their intended use.

Freehold Land is not depreciated

PPE are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
Components of costs

The cost of an asset includes the purchase cost including import duties and non-refundable taxes, borrowing
costs if capitalization criteria are met and any directly attributable costs of bringing an asset to the location and
condition of its intended use.

Subsequent expenditure related to an item of PPE is added to its carrying value only if it increases the future
benefits from the existing asset beyond its previously assessed standard of performance.

All other expenditure related to existing assets including day-to-day repair and maintenance expenditure
and cost of replacing parts, are charged to the statement of profit and loss in the period during which such
expenditure is incurred.

The carrying amount of a PPE is de-recognized upon disposal of PPE or when no future economic benefits are
expected from its use. Any gain or loss arising on the disposal or retirement of an item of PPE is determined
as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the
statement of profit and loss.

Depreciation commences when the assets are ready for their intended use. Pursuant to the applicability of
Schedule II of the Companies Act, 2013, depreciation on all PPE except land are provided on a straight line
method based on the estimated useful life of PPE.

Residual values of assets have been considered at 5% of the original cost of the assets.

The depreciation calculation is based on the balance useful lives of assets and shift working. Depreciation on
assets used on double shift basis have been increase by 50% for that period and Depreciation on assets used in
triple shift basis have been increase by 100% for that period, except for assets in respect of which no extra shift
depreciation is permitted (indicated by NESD in Part C of the schedule).

The useful life of PPE are reviewed at the end of each reporting period if the expected useful life of the
asset changes significantly from previous estimates, the effect of such change in estimates are accounted for
prospectively.

3.10 Inventories

Raw materials have been valued at cost on FIFO method.

Stores & Spares and Packing material have been valued at cost on FIFO method.

Work in Process has been valued at Raw material cost plus proportionate conversion cost.
Finished Goods lying at factory have been valued at Raw material cost plus conversion cost.

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Mar 31, 2024

3) Significant accounting policies

3.1 Statement of Compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (''Ind AS'') notified under section 133 of the Companies Act 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015.

3.2 Basis of preparation and presentation

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

Historical Cost is generally based on the fair value of the consideration given in exchange of goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company taken into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

3.3 Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for returns, trade allowances for deduction, rebates, goods & service tax and amounts collected on behalf of third parties.

Operating Income

Revenue from sale of manufactured products is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects Goods & Service Tax (GST) and other taxes on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue.

Interest income

Interest income is recognized on accrual basis.

3.4 Foreign currencies

Foreign Currency transactions are recorded at the exchange rate prevailing at the date of transaction and monetary items denominated in foreign currency are restated at rates prevailing on the date of balance sheet. The exchange fluctuation arising is shown as "Foreign Exchange Fluctuation Gain / (Loss)" in the statement of profit and loss as per the requirement of Ind AS 21 "The Effects of Changes in Foreign Exchange Rates."

3.5 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

3.6 Government grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them and such grants can reasonably have a value placed upon them.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in profit or loss in the period in which they become receivable.

3.7 Employee benefits

i) Retirement benefit costs and termination benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

For defined benefit retirement benefit plans like provident fund and Employee State Insurance, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each Balance Sheet date.

Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to the statement of profit and loss. Past service cost is recognized in the statement of profit and loss in the period of a plan amendment.

Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

Defined benefit costs are categorised as follows:

> service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

> net interest expense or income; and

> remeasurement

The company presents the first two components of defined benefit costs in the statement of profit and loss in the line item ''Employee benefits expense'' and "Finance Cost" respectively. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognized at the earlier of when the company can no longer withdraw the offer of the termination benefit and when the company recognizes any related restructuring costs.

ii) Short-term and other long-term employee benefits:

A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the company in respect of services provided by employees up to the reporting date.

iii) Contributions to provident fund

The Company makes contributions to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952. Provident Fund is a defined benefit scheme the contribution of which is being deposited with "Employees Provident Fund Organisation"; such contribution to the organisation additionally requires the Company to guarantee payment of interest at rates notified by the Central Government from time to time, for which shortfall, if any has to be provided for as at the balance sheet date.

3.8 Taxation

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

i) Current tax

The tax currently payable is based on taxable profit for the year. 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 current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

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 and tax laws prevailing in the respective tax jurisdictions where the Company operates.

ii) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to 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 recognized 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.

In the case of unused tax losses probability is evaluated considering factors like existence of sufficient taxable temporary differences, convincing other evidence that sufficient taxable profit will be available.

At the end of each reporting period, the company reassess unrecognized deferred tax assets and, the company recognizes a previously unrecognized Deferred Tax Asset to the extent that it has become probable that future taxable profit will allow the Deferred Tax Asset to be recovered.

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 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 realized, 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.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable company and the same taxation authority.

iii) Current and deferred tax for the year

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

3.9 Property, plant and equipment (PPE)

For transition to Ind AS, The Company has elected to continue with the carrying value of all of its PPE recognized as of 01 April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

Land and Building held for use in the supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Freehold Land is not depreciated

PPE are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

Components of costs

The cost of an asset includes the purchase cost including import duties and non-refundable taxes, borrowing costs if capitalization criteria are met and any directly attributable costs of bringing an asset to the location and condition of its intended use.

Subsequent expenditure related to an item of PPE is added to its carrying value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance.

All other expenditure related to existing assets including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss in the period during which such expenditure is incurred.

The carrying amount of a PPE is de-recognized upon disposal of PPE or when no future economic benefits are expected from its use. Any gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.

Depreciation commences when the assets are ready for their intended use. Pursuant to the applicability of Schedule II of the Companies Act, 2013, depreciation on all PPE except land are provided on a straight line method based on the estimated useful life of PPE.

Residual values of assets have been considered at 5% of the original cost of the assets.

The depreciation calculation is based on the balance useful lives of assets and shift working. Depreciation on assets used on double shift basis have been increase by 50% for that period and Depreciation on assets used in triple shift basis have been increase by 100% for that period, except for assets in respect of which no extra shift depreciation is permitted (indicated by NESD in Part C of the schedule).

The useful life of PPE are reviewed at the end of each reporting period if the expected useful life of the asset changes significantly from previous estimates, the effect of such change in estimates are accounted for prospectively.

3.10 Inventories

Raw materials have been valued at cost on FIFO method.

Stores & Spares and Packing material have been valued at cost on FIFO method.

Work in Process has been valued at Raw material cost plus proportionate conversion cost.

Finished Goods lying at factory have been valued at Raw material cost plus conversion cost.

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Mar 31, 2015

I) Accounting Convention

The financial statements are prepared under the historical cost convention in accordance with the Accounting Standards referred to in Sub-section (3C) of Section 211 of the Companies Act 1956 and the relevant presentational requirements of the Companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

iii) Depreciation / Amortization

Depreciation on fixed assets provided as per the life of the asset, provided in schedule-ll of the Company Act, 2013 (as notified on 26th of March, 2014 and is made applicable from 1st of April 2014 by the ministry of corporate affairs). In case of assets whose useful life have ended as on 31st March, 2015, the carrying values as at 1st April, 2014 (after adjusting the 5% of Original cost as Scrap value) have been adjusted to the opening reserves as on 1st March, 2014 pursuant to the provisions of the schedule-ll of the Companies Act, 2013.

iv) Inventories

(a) Raw materials have been valued at cost on FIFO method.

(b) Stores & Spares and Packing material have been valued at cost on FIFO method.

(c) Work in Process has been valued at Raw material cost plus proportionate conversion cost.

(d) Finished Goods lying at factory have been valued at Raw material cost plus conversion.

(e) Cost including Excise duty payable.

v) Transactions in Foreign Currency

Foreign Currency transactions are recorded at the exchange rate prevailing at the date of transaction. The exchange fluctuation arising is shown as "Foreign Exchange Fluctuation Gain / (Loss)".

Notes

employee Benefits

vi) The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as under:-

(a) The Company has taken Group Gratuity Policy from LIC and the fund value as on 31.03.2015 was Rs. 8569.59 Thousand.

(b) The provision for Leave Encashment has been taken on the basis of actuarial valuation. As per the actuarial valuation report the provision for leave encashment has been determined as Rs. 542.53 Thousand as on 31st March, 2015.

(c) Contribution to Provident Fund are made in accordance with the provisions of Employee Provident Fund and Misc. Provisions Act, 1952 and charged to revenue every year and this is in conformity as per the requirement of AS 15.

vii) Cenvat

The balance in the Service Tax and CENVAT account is shown under the note " Short Term Loans and Advances".

viii) Revenue Recognition

(a) Revenue is recognised upon the sale of goods i.e. It is recognised at the time of transfer of significant risks and rewards of ownership to the buyer.

(b) Interest from bank is recognised on accrual basis.

ix) Recognition of Expenses

Expenses are recognised on accrual basis and provisions are made for all known losses and liabilities.

x) Accounting for Taxes on Income

Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised, subject to the consideration of prudence, on timing differences, being the difference between the taxable income and the accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry forward of losses and unabsorbed depreciation, deferred tax assets are recognised based on virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xi) Provision involving substantial degree of estimate in measurement are recognised when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the notes to the financial statements.

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Mar 31, 2014

I) Accounting Convention

The financial statements are prepared under the historical cost convention in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act 1956 and relevant presentational requirements of the Companies Act, 1956.

ii) Fixed Assets

Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses.

iii) Depreciation / Amortization

Depreciation on fixed assets is provided on straight line method as per schedule XIV of the Companies Act 1956 (as revised by the amending notification vide Circular No. 14/93 dated 20.12.93 issued by Department of Company Affairs, Ministry of Law, Justice & Company Affairs). Depreciation is charged on a pro-rata basis for assets purchased / sold during the year.

iv) Inventories

* Raw materials have been valued at cost on FIFO Method.

* Stores & Spares and Packing Material have been valued at cost on FIFO Method.

* Work in process has been valued at raw material cost plus proportionate of conversion cost.

* Finished goods lying at factory have been valued at raw material cost plus conversion.

* Cost including excise duty payable.

v) Transactions in Foreign Currency

Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions. The exchange fluctuation arising are shown as "Foreign Exchange Fluctuation" Gains/(Loss).

vi) Employee Benefits

The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as under:

* The Company has taken Group Gratuity Policy from LIC and the fund Value as on 31.03.2014 was Rs. 66,51,386/-.

* The provision for Leave Encashment is on actuarial valuation basis. As per the actuarial valuation report the provision for leave encashment has been determined as Rs. 6,62,435/- as on 31.03.2014 and provision of Rs. 4,67,811 has been made during the year to match the actuarial valuation liability of Rs. 6,62,435/-.

* Contribution to Provident Fund are made in accordance with the provisions of Employees'' Provident Fund and misc. provisions act, 1952 and charged to revenue every year, and this is conformity as per the requirements of AS 15.

vii) Cenvat

The balance in the Service Tax and Cenvat account is shown under note "Short Term Loans and Advances."

viii) Revenue Recognition

* Revenue is recognised upon the sale of goods i.e. it is recognised at the time of transfer of significant risks and rewards of ownership to the buyer.

* Interest from bank is recognized on accrual basis.

ix) Recognition of Expenses

Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

x) Accounting for Taxes on Income

Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

xi) Provision involving substantial degree of estimate in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

(i) Basis of preparation

The accompanying financial statements are prepared on the accrual basis of accounting, under the historical cost convention, in accordance with the Generally Accepted Accounting Principles ("GAAP") in India, accounting standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956, as adopted consistently by the Company.

(ii) Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Examples of such estimates include future obligations under employee benefit plans, inventory and estimated useful life of fixed assets. Any changes in estimates are adjusted prospectively in the future periods. Actual results could differ from these estimates.

(iii) Revenue recognition

Revenue is recognised upon the sale of goods i.e. it is recognised at the time of transfer of significant risks and rewards of ownership to the buyer.

(iv) Expenditure

Expenses are accounted for on accrual basis and provisions are made for all known losses and liabilities.

(v) Retirements benefits

i) Contribution to Provident and Family Pension Funds are funded as a percentage of salary/wages. ii) Gratuity liability is funded as per group gratuity scheme of Life Insurance Corporation of India. iii) Leave encashment liability is provided on estimated basis.

(vi) Earnings per share

Basic earnings per share are computed using the weighted average number of the equity shares outstanding during the period. Diluted earning per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year end. except where the results would be anti- dilutive. There are no potentially dilutive equity shares outstanding as on 31st March, 2010.

(vii) Fixed assets

Fixed assets are stated at the cost of acquisition including incidental costs related to acquisition and installation. Cenvat Credit available is deducted from the cost of Fixed Assets.

(viii) Depreciation

Depreciation on fixed assets is provided on straight line method as per schedule XIV of the Companies Act 1956 (as revised by the amending notification vide Circular no. 14/93 dated 20.12.93 issued by Department of Company Affairs, Ministry of Law, Justice & Company Affairs). Depreciation is charged on a pro-rata basis for assets purchased / sold during the year.

(ix) Inventories

Raw material, packing material, stock in process, stores and spares are valued at actual cost excluding CENVAT where available. Finished goods are valued at cost inclusive of excise duty or net realisable value whichever is lower. The claims for CENVAT are provided on actual receipt basis.

(x) Taxation

According to the Accounting Standard 22 on Accounting of Taxes on Income, differences that result between the taxable profit and the profit as per the financial statements are identified and thereafter deferred tax asset / liability is recorded as timing difference; namely the difference that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect is calculated on accumulated timing differences at the end of an accounting period based on tax rates that have been enacted or substantially enacted by the Balance Sheet date.

Deferred tax asset is reviewed at each Balance Sheet date and written down or written up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realised.

(xi) Contingencies

Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred, and the amount can be reasonably estimated.

(xii) Interest

Interest to be received on securities shall be accounted for as and when received.