Accounting Policies of Hindusthan Udyog Ltd. Company

Mar 31, 2024

NOTE 1 (B) : MATERIAL ACCOUNTING POLICIES.

A summary of the significant accounting policies applied in the preparation of the financial statements are as given below.
These accounting policies have been applied consistently to all the periods presented in the financial statements.

1} BASIS OF PREPARA TION

The financial statements of Hindusthan Udyog Ltd {"the Company") comply in all material aspects with Indian
Accounting Standards ("Ind-AS") as prescribed under section 133 of the Companies Act, 2013 ("the Act"), as notified
under the Companies (Indian Accounting Standards) Rules, 2015, Companies (Indian Accounting Standard)
Amendment Rules 2016 and other accounting principles generally accepted in India.

The Company follows the mercantile system of accounting and recognises income and expenditure on an accrual
basis. The Financial Statements are prepared under the historical cost convention, except in case of significant
uncertainties and except for the following:

1 Certain financial assets and liabilities that are measured at fair value.

2 Assets held for sale which are measured at lower of carrying value and fair value less cost to sell.

3 Defined benefit plans where plan assets are measured at fair value.

The financial statements for the year ended 31st March, 2024 have been approved by the Board of Directors of the
Company in their meeting held on 29th May, 2024.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle.
An operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash
equivalents. As set out in the Schedule III to the Companies Act, 2013, the normal operating cycle cannot be identified
and hence it is assumed to have a duration of twelve months.

The financial statements are presented in 1NR and all values are rounded off to the nearest lacs (INR 00,000), except
when otherwise indicated.

Use of Estimates and Management Judgement

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

II) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are
net of returns, allowances, rebates, value added taxes, goods and services tax and amounts collected on behalf of
third parties. The company recognizes revenue when the amount of Revenue can be reliably measured and it is
probable that future economic benefits will flow to the company.

1 Sales are recognised when significant risks , rewards and control are transferred to the buyer as per the
contractual terms or on dispatch where such dispatch coincides with transfer of significant risks and rewards to

2 Export incentives are accounted for on export of goods if the entitlements can be estimated with reasonable
accuracy and conditions precedent to claim our fulfilled.

Ill) Other Income:

1 Interest Income on Financial Assets is recognised using the effective interest rate method. The effective interest
rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial
assets to the gross carrying amount of the Financial Asset. When calculating the effective interest rate, the
Company estimates the expected cash flows by considering all the contractual terms of the financial instruments.

2 Dividends are recognized in the statement of profit and loss only when the right to receive payments is
established, it is probable that the economic benefits associated with the dividend will flow to the Company, and
the amount of the dividend can be measured reliably.

3 Profit/Loss on sale of Investments is recognised on the contract date.

4 Others: The Company recognizes other income (including rent and misc receipts) on accrual basis. However,
where the ultimate collection of the same lacks reasonable certainty, revenue recognition is postponed to the
extent of uncertainty.

IV) 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 realised or intended to be sold or consumed in Company''s operating cycle

¦ Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

¦ Cash and 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 current when:

¦ It is expected to be settled in Company''s operating cycle

• It is held primarily for the purpose of trading

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

¦ 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.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in mZA

cash and cash equivalents. The Company has identified twelve months as its operating cycle. rt V2--U

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v) Non -current assets held for sale

Non -current assets and disposal groups are classified as held for sale if their carrying amount is
intended to be recovered principally through a sale {rather than through continuing use) when the
asset (or disposal group) is available for immediate sale in its present condition subject only to terms
that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable
an is expected to qualify for recognition as a completed sale within one year from the date of
classification.

Non -current assets and disposal group classified as held for sale are measured at lower of their carrying amount and
fair value less costs to sell.

VI) Investment Property

Investment properties held to earn rentals or for capital appreciation or both are stated in the balance sheet at cost,
less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Any gain or loss on
disposal of investment property is determined as the difference between net disposal proceeds and the carrying
amount of the property and is recognised in the statement of profit and loss. Transfer to, or from, investment property
is done at the carrying amount of the property.

VII) Intangible Asset

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired
in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets
are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in
profit or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method
for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the
expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are
considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting
estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and
loss unless such expenditure forms part of carrying value of another asset.

Intangible assets with indefinite useful lives including Goodwill are not amortised, but are tested for impairment
annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to
finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the
asset is derecognised.

VIII) Foreign currency Transactions

Items included in the financial statements are measured using the currency of the primary economic environment in
which the entity operates ("the functional currency"). The financial statements are presented in India Rupee which is
Hindusthan Udyog Limited''s functional and presentation currency.

a) On initial recognition, all foreign currency transaction are recorded at foreign exchange rate on the date of
transaction.

b) Monetary items of currents assets and liabilities in foreign currency outstanding at the close of financial year are
revalorised at the appropriate exchange rates prevailing at the close of the year.

c) The gain or loss on decrease/increase in reporting currency due to fluctuation in foreign exchange rate, in case of
monetary current assets and liabilities in foreign currency, are recognised in the Statement of Profit and Loss

IX) Financial Instruments

All financial assets are recognised on trade date when the purchase of a financial asset is under a contract whose term
requires delivery of the financial asset within the timeframe established by the market concerned. Financial assets are
initially measured at fair value, plus transaction costs, except for those financial assets which are classified as at fair
value through profit or loss (FVTPL) at inception. All recognised financial assets are subsequently measured in their
entirety at either amortised cost or fair value.

Classification of Financial Assets

Financial assets are classified as ''equity instrument'' if it is a non-derivative and meets the definition of ''equit/ for the
issuer. All other non-derivative financial assets are ''debt instruments''.

Financial assets at amortised cost and the effective interest method

Debt instruments are measured at amortised cost if both of the following conditions are met:

• The asset is held within a business model whose objective is to hold assets in order to collect contractual cash
flows; and

• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

Debt instruments meeting these criteria are measured initially at fair value plus transaction costs. They are
subsequently measured at amortised cost using the effective interest method less any impairment, with interest
recognised on an effective yield basis in investment income.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest over the relevant period. The effective interest rate is the rate that exactly discounts the estimated future
cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate,
transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where
appropriate) a shorter period, to the net carrying amount on initial recognition.

The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised cost
criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch had the
financial asset been measured at amortised cost.

Financial assets at fair value th-ough other comprehensive income (FVTOCI)

Debt instruments are measured at FVTOCI if both of the following conditions are met:

• The asset is held within a business model whose objective is to hold assets in order to collect contractual cash
flows and selling assets; and

• The contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

Debt instruments meeting these criteria are measured initially at fair value plus transaction costs. They are
subsequently measured at fair value with any gains or losses arising on Remeasurement recognised in other
comprehensive income, except for impairment gains or losses and foreign exchange gains or losses. Interest calculated
using the effective interest method is recognised in the statement of profit and loss in investment income. When the
debt instrument is derecognised the cumulative gain or loss previously recognised in other comprehensive income is
reclassified to the statement of profit and loss account as a reclassification adjustment.

At initial recognition, an irrevocable election is made (on an instrument-by-instrument basis) to designate investments
in equity instruments other than held for trading purpose at FVTOCI.

A financial asset is held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages
together and has evidence of a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.

Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently,
they are measured at fair value with gains and losses arising from changes in fair value recognised in other
comprehensive income. Where the asset is disposed of, the cumulative gain or loss previously accumulated in the
other comprehensive income is directly reclassified to retained earnings.

For equity instruments measured at fair value through other comprehensive income no impairments are recognised in
the statement of profit and loss.

Dividends on these investments in equity instruments are recognised in the statement of profit and loss in investment
income when the Company''s right to receive the dividends is established, it is probable that the economic benefits
associated with the dividend will flow to the entity; and the amount of the dividend can be measured reliably.

Financial Assets at Fair Value through Profit and Loss (FVTPL)

Financial assets that do not meet the criteria of classifying as amortised cost or fair value through other
comprehensive income described above, or that meet the criteria but the entity has chosen to designate as at FVTPL at
initial recognition, are measured at FVTPL.

Investments in equity instruments are classified as at FVTPL, unless the Company designates an investment that is not
held for trading at FVTOCI at initial recognition.

Financial assets classified at FVTPL are initially measured at fair value excluding transaction costs.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement
recognised in the statement of profit and loss.

Dividend income on investments in equity instruments at FVTPL is recognised in the statement of profit and loss in
investment income when the Company''s right to receive the dividends is established, it is probable that the economic
benefits associated with the dividend will flow to the entity; and the amount of the dividend can be measured reliably.

Impairment of financial assets

On initial recognition of the financial assets, a loss allowance for expected credit loss is recognised for debt
instruments at amortised cost and FVTOCI. For debt instruments that are measured at FVTOCI, the loss allowance is
recognised in other comprehensive income in the statement of profit and loss and does not reduce the carrying
amount of the financial asset in the balance sheet.

Expected credit losses of a financial instrument is measured in a way that reflects:

• an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;

• the time value of money; and

• reasonable and supportable information that is available without undue cost or effort at the reporting date about
past events, current conditions and forecasts of future economic conditions.

At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition.

When making the assessment, the Company compares the risk of a default occurring on the financial instrument as at
the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition
and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative
of significant increases in credit risk since initial recognition.

If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial
recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month
expected credit losses. If, the credit risk on that financial instrument has increased significantly since initial
recognition, the Company measures the loss allowance for a financial instrument at an amount equal to the lifetime
expected credit losses.

The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date is
recognised as an impairment gain or loss in the statement of profit and loss.

Financial Liabilities and equity instruments issued by the Company

Oassificatian as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of
the contractual arrangement.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue
costs.

Compound instruments

The component parts of compound instruments (convertible instruments) issued by the Company are classified
separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the
date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a
similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective
interest method until extinguished upon conversion or at the instrument''s maturity date. The equity component is
determined by deducting the amount of the liability component from the fair value of the compound instrument as a
whole. This is recognised and included in equity, net of income tax effects, and is not subsequently remeasured.

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 either held for trading or it is designated as
at FVTPL.

A financial liability is classified as held for trading if:

• it has been acquired or incurred principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages
together and for which there is evidence of a recent actual pattern of short-term profit taking; or

• it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading may also be designated as at FVTPL upon initial
recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would
otherwise arise; or

• the financial liability forms part of a Company of financial assets or financial liabilities or both, which is managed
and its performance is evaluated on a fair value basis, in accordance with the Company''s documented risk
management or investment strategy, and information about the Company is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and Ind-AS 109 Financial Instruments

permits the entire combined contract to be designated as at FVTPL. ..

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Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in
the statement of profit and loss, except for the amount of change in the fair value of the financial liability that is
attributable to changes in the credit risk of that liability which is recognised in other comprehensive income.

The net gain or loss recognised in the statement of profi t and loss incorporates any interest paid on the financial
liability.

Other Financial Liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with
interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.

X) Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.

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:

1 In the principal market for the asset or liability, or

2 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, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised 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 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable

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

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.

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Mar 31, 2014

1.1 Accounting Convention:

i) The Financial Statements are prepared under the historical cost convention, on accrual basis in accordance with the provisions of The Companies Act, 1956.

ii) Liquidated damages or claims are accounted for on settlement of claim.

iii) Commission on sales is accounted for on submission of claim by/receipt of confirmation from agents/ principals.

1.2 Capital Subsidy:

Capital Subsidy not specifically related to Fixed Assets is credited to Capital Reserve and retained till the requisite conditions are fulfilled.

1.3 Fixed Assets & Depreciation:

Fixed assets are stated at their original cost of acquisition or construction and other incidental expenses, less accumulated depreciation.

Depreciation on Fixed Assets is charged on Written Down Value Method (On Straight Line Method for Nagpur Unit) at the rate specified in Schedule XIV to the Companies Act, 1956.

1.4 Investments:

Investments of the Company are held as Long Term Investment and are carried over at Cost.

1.5 Inventories:

Tools and Implements are written off at the rate of 25% every year.

The quantity of stock-in-trade is determined from time to time by physical verification carried out by the management and the verification of raw materials has been done at lower of cost and net realisable value. The cost formula used is FIFO (Weighted Average for Nagpur Unit). The valuation of Semi-finished Goods and Finished Goods/Trading Items has been done at lower of cost and net realizable value.

1.6 Foreign Currency Transactions :

Transaction in Foreign Currency is recorded at the rate of exchange prevailing at the date of the transactions. Monetary items denominated in Foreign Currencies at the Balance Sheet date are translated at the Balance Sheet date rates. Any income or expenses on account of exchange difference either on settlement or on translation at the Balance Sheet date is recognised in Profit and Loss Account in the year in which it arises.

1.7 Retirements Benefits :

Provision for Gratuity and Leave Encashment liability to employees are made on the basis of Actuarial Valuation basis as per the requirement of the Accounting Standard - 15 (Revised) issued by the Institute of Chartered Accountants of India.

1.8 Impairment of Asset :

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is recognised as an expense in the statement of Profit & Loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased.

1.9 Taxation :

Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made with reference to taxable income computed for the accounting period, for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainity of realization of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainity of realization in future. Deferred tax assets / liabilities are reviewed as at each balance sheet date based on developments during the year and available case law, to reassess realization/liabilities.

1.10 Miscellaneous expenditure :

a) Preliminary and Share Issue Expenses are written off over a period of ten years.

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Mar 31, 2012

1.1 Accounting Convention:

i) The Financial Statements are prepared under the historical cost convention, on accrual basis in accordance with the provisions of The Companies Act, 1956.

ii) Liquidated damages or claims are accounted for on settlement of claim.

iii) Commission on sales is accounted for on submission of claim by / receipt of confirmation from agents/ principals.

1.2 Capital Subsidy:

Capital Subsidy not specifically related to Fixed Assets is credited to Capital Reserve and retained till the requisite conditions are fulfilled.

1.3 Fixed Assets & Depreciation:

Fixed assets are stated at their original cost of acquisition or construction and other incidental expenses, less accumulated depreciation.

Depreciation on Fixed Assets is charged on Written Down Value Method (On Straight Line Method for Nagpur Unit) at the rate specified in Schedule XIV to the Companies Act. 1956.

1.4 Investments:

Investments of the Company are held as Long Term Investment and are carried over at Cost.

1.5 Inventories:

Tools and Implements are written off at the rate of 25% every year.

The quantity of stock-in-trade is determined from time to time by physical verification carried out by the management and the verification of raw materials has been done at lower of cost and net realisable value. The cost formula used is FIFO (Weighted Average for Nagpur Unit). The valuation of Semi-finished Goods and Finished Goods/Trading Items has been done at lower of cost and net realizable value.

1.6 Foreign Currency Transactions :

Transaction in Foreign Currency is recorded at the rate of exchange prevailing at the date of the transactions. Monetary items denominated in Foreign Currencies at the Balance Sheet date are translated at the Balance Sheet date rates. Any income or expenses on account of exchange difference either on settlement or on translation at the Balance Sheet date is recognised in Profit and Loss Account in the year in which it arises.

1.7 Retirements Benefits :

Provision for Gratuity and Leave Encashment liability to employees are made on the basis of Actuarial Valuation basis as per the requirement of the Accounting Standard - 15 (Revised) issued by the Institute Of Chartered Accountants Of India.

1.8 Impairment of Asset :

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is recognised as an expense in the statement of Profit & Loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased.

1.9 Taxation :

Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made with reference to taxable income computed for the accounting period, for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realization in future. Deferred tax assets / liabilities are reviewed as at each balance sheet date based on developments during the year and available case law, to reassess realization / liabilities.

1.10 Miscellaneous expenditure :

a) Preliminary and Share Issue Expenses are written off over a period of ten years.

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Mar 31, 2011

1. Accounting Convention :

i) The Financial Statements are prepared under the historical cost convention, on accrual basis in accordance with the provisions of The Companies Act, 1956.

ii) Liquidated damage or claim are accounted for on settlement of claim.

iii) Commission on sales is accounted for on submission of claim by / receipt of confirmation from agents /principals.

2. Capital Subsidy :

Capital Subsidy not specifically related to Fixed Assets is credited to Capital Reserve and retained till the requisite conditions are fulfilled.

3. Fixed Assets & Depreciation :

Fixed assets are stated at their original cost of acquisition or construction and other incidental expenses, less accumulated depreciation.

Depreciation on Fixed Assets is charged on Written Down Value Method (On Straight Line Method for Nagpur Unit) at the rate specified in Schedule XIV to the Companies Act, 1956.

4. Investments :

Investments of the Company are held as Long Term Investment and are carried over at Cost.

5. Inventories :

Tools and Implements are written off at the rate of 25% every year.

The quantity of stock-in-trade, is determined from time to time by physical verification carried out by the management and the verification of raw materials has been done at lower of cost and net realisable value. The cost formula used is FIFO ( Weighted Average for Nagpur Unit ). The valuation of Semi-finished Goods and Finished Goods/Trading Items has been done at lower of cost and net realizable value.

6. Foreign Currency Transactions :

Transaction in Foreign Currency are recorded at the rate of exchange prevailing at the date of the transactions. Monetary items denominated in Foreign Currencies at the Balance Sheet date are translated at the Balance Sheet date rates. Any income or expenses on account of exchange difference either on settlement or on translation at the Balance Sheet date is recognised in Profit and Loss Account in the year in which it arises.

7. Retirements Benefits :

Provision for Gratuity and Leave Encashment liability to employees are made on the basis of Actuarial Valuation basis as per the requirement of the Accounting Standard – 15 (Revised) issued by the Institute of Chartered Accountants of India.

8. Impairment of Asset :

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is recognised as an expense in the statement of Profit & Loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased.

9. Taxation :

Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made with reference to taxable income computed for the accounting period, for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realization in future. Deferred tax assets/liabilities are reviewed as at each balance sheet date based on developments during the year and available case law, to reassess realization/liabilities.

10. Miscellaneous expenditure :

a) Preliminary and Share Issue Expenses are written off over a period of ten years.

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Mar 31, 2010

1. Accounting Convention:

i) The Financial Statements are prepared under the historical cost convention, on accrual basis in accordance with the provisions of The Companies Act, 1956.

ii) Liquidated damage or claim are accounted for on settlement of claim.

iii) Commission on sales is accounted for on submission of claim by/receipt of confirmation from agents /principals.

2. Capital Subsidy :

Capital Subsidy not specifically related to Fixed Assets is credited to Capital Reserve and retained till the requisite conditions are fulfilled.

3. Fixed Assets & Depreciation :

Fixed assets are stated at their original cost of acquisition or construction and other incidental expenses, less accumulated depreciation.

Depreciation on Fixed Assets is charged on Written Down Value Method (On Straight Line Method for Nagpur Unit) at the rate specified in Schedule XIV to the Companies Act, 1956.

4. Investments:

Investments of the Company are held as Long Term Investment and are carried over at Cost.

5. Inventories:

Tools and Implements are written off at the rate of 25% every year.

The quantity of stock-in-trade, is determined from time to time by physical verification carried out by the management and the verification of raw materials has been done at lower of cost and net realisable value. The cost formula used is FIFO (Weighted Average for Nagpur Unit). The valuation of Semi-finished Goods and Finished Goods / Trading Items has been done at lower of cost and net realizable value.

6. Foreign Currency Transactions:

Transaction in Foreign Currency are recorded at the rate of exchange prevailing at the date of the transactions. Monetary items denominated in Foreign Currencies at the Balance Sheet date are translated at the balance Sheet date rates. Any income or expenses on account of exchange difference either on settlement or on translation at the Balance Sheet date is recognised in Profit and Loss Account in the year in which it arises.

7. Retirements Benefits :

Provision for Gratuity and Leave Encashment liability to employees are made on the basis of Actuarial Valuation basis as per the requirement of the Accounting Standard-15 (Revised) issued by the Institute of Chartered Accountants of India.

8. Impairment of Asset:

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverable amount and the same is recognised as an expense in the statement of Profit & Loss and carrying amount of the asset is reduced to its recoverable amount.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased.

9. Taxation:

Income tax expense comprises current tax and deferred tax charge or credit. Provision for current tax is made with reference to taxable income computed for the accounting period, for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge or credit is recognised using current tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainity of realization of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainity of realization in future. Deferred tax assets/liabilities are reviewed as at each balance sheet date based on developments during the year and available case law, to reassess realization/liabilities.

10. Miscellaneous expenditure:

a) Preliminary and Share Issue Expenses are written off over a period of ten years.