Accounting Policies of Kaycee Industries Ltd. Company

Mar 31, 2025

1.3. Material Accounting Policies

1.3.1 Property, Plant and equipment:

Property, plant and equipment are stated at original cost inclusive of incidental expenses related
to acquisition net of tax/duty credit availed, net of accumulated depreciation and accumulated
impairment losses, if any. Such Cost includes the cost of replacing part of the plant and equipment
and borrowing cost for long-term construction project if the recognition criteria are met. When
significant parts of plant and equipment are required to be replaced at intervals, the company
depreciates them separately based on their specific useful lives. Likewise, when a major inspection
is performed, its cost is recognized in the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied. All other repair and maintenance cost are
recognized in profit or loss account as incurred.

Capital work-in-progress includes cost of property, plant and equipment under installation/ under
development as at the balance sheet date.

Advances paid towards the acquisition of property, plant and equipment outstanding at each
balance sheet date is classified as capital advances.

Property, plant and equipment which are added/disposed off during the year, depreciation is
provided on pro-rata basis with reference to the date of addition/deletion.

An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. The gain or loss
arising on the disposal or retirement of an asset is determined as the difference between the net
disposal proceeds and the carrying amount of the asset and is recognized in profit or loss

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as
follows:

The estimated useful lives and residual values are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for on a prospective basis. Leasehold
assets are depreciated lower of lease period or life of the assets. Depreciation is not recorded on
capital work-in-progress until construction and installation are complete and the asset is ready
for its intended use.

1.3.2 Intangible Assets

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.

The estimated useful life of assets are as follows

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment
annually, either individually or at the cash-generating unit level. The assessment of indefin ite 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.

Intangible assets are de-recognised either on their disposal or where no future economic benefits
are expected from their use. 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.

Impairment of tangible and intangible assets:

The Company assesses at each reporting date whether there is an indication that an asset/cash
generating unit may be impaired. If any indication exists the Company estimates the recoverable
amount of such assets and if carrying amount exceeds the recoverable amount, impairment is
recognized. The recoverable amount is the higher of the net selling price and its value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value

using an appropriate discount factor. When there is indication that previously recognized
impairment loss no longer exists or may have decreased such reversal of impairment loss is
recognized in the profit or loss.

1.3.3 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period
in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds. Borrowing cost also includes exchange differences to
the extent regarded as an adjustment to the borrowing costs.

1.3.4 Inventories

Inventories consist of raw materials, work-in-progress, finished goods, stock-in-trade and stores
and spares. Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for
as follows:

a) Raw materials: cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined on first in, first out
basis.

b) Finished goods and work in progress: cost includes cost of direct materials and labour and
a proportion of manufacturing overheads based on the normal operating capacity, but
excluding borrowing costs. Cost is determined on standard cost basis.

c) Traded goods: cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined on first in, first out
basis.

Initial cost of inventories includes the transfer of gains and losses on qualifying cash flow hedges,
recognised in OCI, in respect of the purchases of raw materials.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale.

1.3.5 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits with bank which are
short-term, highly liquid investments that are readily convertible into known amount of cash and
which are subject to insignificant risk of change in value.

1.3.6 Foreign currency transactions

The Company’s financial statements are presented in INR, which is also the company’s functional
currency.

Foreign currency transactions are recorded on initial recognition in the functional currency, using
the exchange rate at the date of the transaction. At each balance sheet date, foreign currency
monetary items are reported using the closing exchange rate. Exchange differences that arise on
settlement of monetary items or on reporting of each balance sheet date of the company’s
monetary items at the closing rate are recognized as income or expenses in the period in which
they are arise. Non-monetary items which are carried at historical cost denominated in a foreign
currency are reported using the exchange rate at the date of transaction. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value is determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of the gain or loss on the change in
fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised
in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

1.3.7 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

• Held primarily for the purpose of trading

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

• 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 current when:

• It is expected to be settled in normal 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.

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

1.3.8 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:

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

• 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 measu red 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.

1.3.9 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured, regardless of when the payment is being
made. Revenue is measured at the fair value of the consideration received or receivable, taking
into account contractually defined terms of payment and excluding taxes or duties collected on
behalf of the government. The Company has concluded that it is the principal in all of its revenue
arrangements since it is the primary obligor in all the revenue arrangements as it has pricing
latitude and is also exposed to inventory and credit risks.

The specific recognition criteria described below must also be met before revenue is recognised.
Sale of goods:

Revenue from contracts with customers is recognised when control of the goods or services are
transferred to the customer at an amount that reflects the consideration entitled in exchange for
those goods or services. Generally, control is transferred upon shipment of goods to the customer
or when the goods is made available to the customer, provided transfer of title to the customer
occurs and the Company has not retained any significant risks of ownership or future obligations
with respect to the goods shipped.

Revenue is measured at the fair value of consideration which the Company expects to be entitled
to in exchange for transferring distinct goods or services to a customer as specified in the contract,
excluding trade discounts or amounts collected on behalf of third parties (for example taxes and
duties collected on behalf of the government). Consideration is generally due upon satisfaction
of performance obligations and a receivable is recognised when it becomes unconditional.
Generally, the credit period varies between 0-90 days from the shipment or delivery of goods or
services as the case may be. The Company provides volume rebates to certain customers once
the quantity of products purchased during the period exceeds a threshold.

Rendering of services:

Revenue from sale of service is recognised as per terms of the contract with customers over time
by measuring the progress towards complete satisfaction of performance obligations at the
reporting period.

Interest Income :

For all financial instruments measured either at amortised cost or at fair value through other
comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is
the rate that exactly discounts the estimated future cash payments or receipts over the expected
life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount
of the financial asset or to the amortised cost of a financial liability. When calculating the effective
interest rate, the Company estimates the expected cash flows by considering all the contractual
terms of the financial instrument (for example, prepayment, extension, call and similar options)
but does not consider the expected credit losses.

Interest income is recognised on time proportion basis.

Dividends :

Revenue is recognized when the Company right to receive the payment is established, which is
generally when shareholders approve the dividend.

Rental income :

Rental income arising from operating leases is accounted for on a straight-line basis over the
lease term.

1.3.10 Earnings per share (EPS)

The Company presents basic and diluted earnings per share (“EPS”) data for its equity shares.
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders
of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the
parent (after adjusting for interest on the convertible preference shares) by the weighted average
number of Equity shares outstanding during the year plus the weighted average number of Equity
shares that would be issued on conversion of all the dilutive potential Equity shares into Equity
shares.

1.3.11 Taxes

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted, at the reporting date in the countries where
the Company operates and generates taxable income.

Current income tax relating to items recognised outside profit or loss is recognized outside profit
or loss (either in other comprehensive income or in equity). Current tax items are recognized in
correlation to the underlying transaction either in OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.

The Company has opted to pay tax under section 115BAA at reduced rate of 22% plus applicable
surcharge and cess from F.Y 2021-22 and accordingly current tax provision has been made and
hence MAT is not applicable to the company and accordingly MAT credit no longer eligible is
shown under Prior Period Tax adjustment.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each
reporting date and are recognized to the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss
(either in other comprehensive income or in equity). Deferred tax items are recognized in correlation
to the underlying transaction either in OCI or directly in equity.

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 taxes relate to the same
taxable entity and the same taxation authority.

The breakup of the major components of the deferred tax assets and liabilities as at balance
sheet date has been arrived at after setting off deferred tax assets and liabilities where the company
have a legally enforceable right to set-off assets against liabilities and where such assets and
liabilities relate to taxes on income levied by the same governing taxation laws.

1.3.12 Segment Accounting

The chief operational decision maker monitors the operating result of its business segment
separately for the purpose of making decision about resource allocation and performance
assessment. Segment performance is evaluated based on profit and loss and is measured
consistently with profit or loss in the financial statement. The operating segments have been
identified on the basis of the nature of products/services.

a) Segment revenue includes sales and other income directly identifiable with / allocable to the
segment including inter-segment revenue.

b) Expenses that are directly identifiable with/allocable to segment are considered for determining
the segment result. Expenses which relate to the company as a whole and not allocable to
segment are included under unallocable expenditure.

c) Income which relates to the company as a whole and allocable to segment is included in
unallocable income.

d) Segment result includes margin on inter-segment and sales are reduced in arriving at the
profit before tax to the company.

e) Segment assets and liabilities include those directly identifiable with respective segment.
Un-allocable assets and liabilities represent the asset and liabilities that relate to the company
as a whole and not allocable to any segment.

Inter-Segment transfer pricing

Segment revenue resulting from transaction with other business segment is accounted on the
basis of transfer price agreed between the segments. Such transfer prices are either determined
to yield a desired margin or agreed on a negotiated basis.

1.3.13 Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. That is,
if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.

Company as a lessee

The Company’s lease asset classes primarily comprise of lease for land and building. The
Company assesses whether a contract contains a lease, at inception of a contract. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a

period of time in exchange for consideration. To assess whether a contract conveys the right to
control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has substantially all of the economic benefits from use of the asset through the
period of the lease and

(iii) the Company has the right to direct the use of the asset.

The Company applies a single recognition and measurement approach for all leases, except for
short-term leases and leases of low-value assets. For these short-term and low value leases, the
Company recognizes the lease payments as an operating expense on a straight-line basis over
the term of the lease. The Company recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets as below:-

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e.,
the date the underlying asset is available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs incurred, and lease payments made at or before
the commencement date less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the underlying assets.

If ownership of the leased asset transfers to the Company at the end of the lease term or the
cost reflects the exercise of a purchase option, depreciation is calculated using the estimated
useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the
accounting policies in section ‘Impairment of nonfinancial assets’.

ii) Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured
at the present value of lease payments to be made over the lease term. The lease payments
include fixed payments (including in substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected
to be paid under residual value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by the Company and payments
of penalties for terminating the lease, if the lease term reflects the Company exercising the
option to terminate. Variable lease payments that do not depend on an index or a rate are
recognised as expenses (unless they are incurred to produce inventories) in the period in
which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental
borrowing rate at the lease commencement date because the interest rate implicit in the
lease is not readily determinable. After the commencement date, the amount of lease liabilities
is increased to reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a modification, a

change in the lease term, a change in the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to determine such lease payments) or a
change in the assessment of an option to purchase the underlying asset.

(iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases
(i.e., those leases that have a lease term of 12 months or less from the commencement date
and do not contain a purchase option). It also applies the lease of low-value assets recognition
exemption to leases that are considered to be low value. Lease payments on short-term
leases and leases of low-value assets are recognised as expense on a straight-line basis
over the lease term.

“Lease liability” and “Right of Use” asset is separately presented in the Balance Sheet and
lease payments have been classified as financing cash flows.

1.3.14 Employee Benefits

I) Short Term Employees Benefits:

All short term employee benefits such as salaries, wages, bonus, short term compensated
absences, awards, ex gratia, performance pay, medical benefits, which fall due within 12
months of the period in which the employee renders the related service which entitles him to
avail such benefits and non-accumulating compensated absences are recognized on an
undiscounted basis and charged to profit and loss account

II) Post Employment Benefit:

a) Defined Contribution Plan

Retirement benefit in the form of provident fund is a defined contribution plan. Company’s
contribution to the provident fund based on a percentage of salary is made to Employee
Provident Fund and is charged to profit and loss account when an employee renders
the related service.

b) Defined Benefit Plan

The Company operates a defined benefit gratuity plan in India, which requires
contributions to be made to a separately administered fund.

The Company also provide defined benefit in the form of leave accrual and encashment.

The cost of providing benefits under the defined benefit plan is determined using the
projected unit credit method.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset
ceiling, excluding amounts included in net interest on the net defined benefit liability
and the return on plan assets (excluding amounts included in net interest on the net
defined benefit liability), are recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings through OCI in the period in which
they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

• The date of the plan amendment or curtailment, and

• The date that the Company recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability
or asset. The company recognises the following changes in the net defined benefit
obligation as an expense in the consolidated statement of profit and loss:

• Service costs comprising current service costs, past-service costs, gains and
losses on curtailments and non-routine settlements; and

• Net interest expense or income

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Mar 31, 2024

1.3. SIGNIFICANT ACCOUNTING POLICIES

1.3.1 Property, Plant and equipment:

Property, plant and equipment are stated at original cost inclusive of incidental expenses related to acquisition net of tax/duty credit availed, net of accumulated depreciation and accumulated impairment losses, if any. Such Cost includes the cost of replacing part of the plant and equipment and borrowing cost for long-term construction project if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement rf the recognition criteria are satisfied. All other repair and maintenance cost are recognized in profit or loss account as incurred.

Capital work-in-progress includes cost of property, plant and equipment under installation/ under development as at the balance sheet date

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances.

Property, plant and equipment which are added/disposed off during the year depreciation is provided on pro-rata basis with reference to the date of addition/deletion.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized in profit or loss

The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Leasehold assets are depreciated lower of lease period or life of the assets Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use.

1.3.2 Intangible Assets

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 tor 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 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.

Intangible assets are de-recognised either on their disposal or where no future economic benefits are expected from their use. 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.

Impairment of tangible and intangible assets:

The Company assesses at each reporting date whether there is an indication that an asset/cash generating unit may be impaired. If any indication exists the Company estimates the recoverable amount of such assets and rf carrying amount exceeds the recoverable amount, impairment is recognized, The recoverable amount is the higher of the net selling price and its value in use. In assessing value in use. the estimated future cash flows are discounted to their present value using an appropriate discount factor. When there is indication that previously recognized impairment loss no longer exists or may have decreased such reversal of impairment loss is recognized in the profit or loss

1.3.3 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

1.3.4 Inventories

Inventories consist of raw materials, work-in-progress, finished goods, stock-in-trade and stores and spares. Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

a) Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition Cost is determined on first in. first out basis.

b) Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on standard cost basis.

c) Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition Cost is determined on first in, first out basis.

Initial cost of inventories includes the transfer of gains and losses on qualifying cash flow hedges, recognised in OCI, in respect of the purchases of raw materials.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

1.3.5 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits with bank which are shortterm, highly liquid investments that are readily convertible into known amount of cash and which are subject to insignificant risk of change in value.

1.3.6 Foreign currency transactions

The Company''s financial statements are presented in INR, which is also the company''s functional currency.

Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported using the closing exchange rate. Exchange differences that arise on settlement of monetary items or on reporting of each balance sheet date of the company''s monetary items at the closing rate are recognized as income or expenses in the period in which they arise. Non-monetary items which are carried at histoncal cost denominated in a foreign currency are reported using the exchange rate at the date of transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e.. translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

1.3.7 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:

v Expected to be realised or intended to be sold or consumed in normal operating cycle *> Held primarily for the purpose of trading

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

•> 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 current when:

? It is expected to be settled in normal 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.

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

1.3.8 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:

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

? 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.

1.3.9 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.

The specific recognition criteria described below must also be met before revenue is recognised.

Sale of goods:

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services... Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.

Revenue is measured at the fair value of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, excluding trade discounts or amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and a receivable is recognised when it becomes unconditional. Generally, the credit period varies between 0-90 days from the shipment or delivery of goods or services as the case may be. The Company provides volume rebates to certain customers once the quantity of products purchased during the period exceeds a threshold.

Rendering of services:

Revenue from sale of service is recognised as per terms of the contract with customers over time by measuring the progress towards complete satisfaction of performance obligations at the reporting period.

Interest Income

Interest income is recognised on time proportion basis. For all financial instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considenng all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

Dividends

Revenue is recognised when the Company right to receive the payment is established, which is generally when shareholders approve the dividend.

Rental income

Rental income arising from operating leases is accounted for on a straight-line basis over the lease term

1.3.10 Earnings per share (EPS)

The Company presents basic and diluted earnings per share (“EPS") data for its equity shares Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

1.3.11 Taxes Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

The Company has opted to pay tax under section 115BAA at reduced rate of 22% plus applicable surcharge and cess from F.Y 2021-22 and accordingly current tax provision has been made and hence MAT is not applicable to the company and accordingly MAT credit no longer eligible is shown under Prior Period Tax adjustment.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deterred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

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

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

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 taxes relate to the same taxable entity and the same taxation authority.

The breakup of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived at after setting off deferred tax assets and liabilities where the company have a legally enforceable right to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.

1.3.12 Segment Accounting

The chief operational decision maker monitors the operating result of its business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss and is measured consistently with profit or loss in the financial statement. The operating segments have been identified on the basis of the nature of products/ services.

a) Segment revenue includes sales and other income directly identifiable with / allocable to the segment including inter-segment revenue,

b) Expenses that are directly identifiable with/alloeable to segment are considered for determining the segment result. Expenses which relate to the company as a whole and not allocable to segment are included under un-allocable expenditure.

c) Income which relates to the company as a whole and allocable to segment is included in unallocable income.

d) Segment result includes margin on inter-segment and sales are reduced in arriving at the profit before tax to the company

e) Segment assets and liabilities include those directly identifiable with respective segment. Unallocable assets and liabilities represent the asset and liabilities that relate to the company as a whole and not allocable to any segment.

Inter-Segment transfer pricing

Segment revenue resulting from transaction with other business segment is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis.

1.3.13 Leases

The Company assesses at contract inception whether a contract is, or contains, a lease That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee

The Company''s lease asset classes primarily comprise of lease for land and building. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and

(iii) the Company has the right to direct the use of the asset.

The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets as below :-

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date ol the lease

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies in section Impairment of nonfinancial assets.

ii) Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments {including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset

(iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

“Lease liability*’ and “Right of Use” asset is separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

1.3.14 Employee Benefits

I) Short Term Employees Benefits:

All short term employee benefits such as salaries, wages, bonus, short term compensated absences, awards, ex gratia, performance pay. medical benefits, which fall due within 12 months of the period in which the employee renders the related service which entitles him to avail such benefits and non-accumulating compensated absences are recognized on an undiscounted basis and charged to profit and loss account

II) Post Employment Benefit:

a) Defined Contribution Plan

Retirement benefit in the form of provident fund is a defined contribution plan. Company''s contribution to the provident fund based on a percentage of salary is made to Employee Provident Fund and is charged to profit and loss account when an employee renders the related service.

b) Defined Benefit Plan

The company operates a defined benefit gratuity plan in India, which requires contributions to be made to a separately administered fund.

The Company also provide defined benefit in the form of leave accrual and encashment.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

*> The date of the plan amendment or curtailment, and

? The date that the Group recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The company recognises the following changes in the net defined benefit obligation as an expense in the consolidated statement of profit and loss:

v Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and

? Net interest expense or income

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Mar 31, 2015

1 Background

KAYCEE INDUSTRIES LIMITED is a manufacturing and trading company in the field of industrial switches, counters, water meters, electrical components, etc.

2 BASIS OF PREPERATION OF FINANCIAL STATEMENT

a) The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principal (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standard as prescribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, and the provision of the Act.

b) Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the year. Actual results could differ from those estimates.

3 REVENUE RECOGNITION:

Revenue is recognised when the significant risks and rewards of ownership of the goods have been passed to the buyer and are recorded net of returns, trade discounts, rebates, sales tax & excise duty where ever applicable.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognised when the Company's right to receive dividend is established by the Balance Sheet date.

4 EMPLOYEE BENEFITS

I) Short Term Employees Benefits:

All short term employee benefits such as salaries, wages, bonus, short term compensated absences, awards, ex gratia, performance pay, medical benefits, which fall due within 12 months of the period in which the employee renders the related service which entitles him to avail such benefits and non accumulating compensated absences are recognized on an undiscounted basis and charged to profit and loss account

II) Post Employment Benefit:

a) Defined Contribution Plan

Company's contribution to the provident fund based on a percentage of salary is made to Provident Fund Trust, which are administered by the trustees.

b) Defined Benefit Plan Gratuity:

The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under this plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium on Projected Unit Credit Method, which is required to be paid by the Company and is debited to the profit and loss account on an accrual basis. Actuarial gains or losses arising during the year are recognized in the profit and loss account.

c) Leave encashment is provided for on the basis of an actuarial valuation carried out by an Actuary at the end of each financial year and debited to the profit and loss account.

5 Inventories

Inventories of Raw Material, Components, Material in Process, Finished goods, Stores & Packing materials and traded goods are stated 'At Cost or Net Realizable value' whichever is lower.

Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition.

Company uses FIFO method for valuation. Cost of finished goods includes excise duty.

6 Fixed Assets

Tangible Assets

Fixed assets are stated at cost less accumulated depreciation, amortization and impairment loss if any. The company capitalizes direct costs including taxes, duty, freight and incidental expenses attributable to the acquisition and installation of fixed assets. Capital work-in-progress is stated at cost.

Depreciation

Depreciation is provided using the written down value method in accordance with the schedule XIV of the Companies Act, 1956. Fixed assets with estimated useful life of less than 1 year & onetime use are fully depreciated in the year of acquisition. Depreciation on assets acquired or disposed off during the year is provided on a pro-rata basis from/up to the date of acquisition/disposal.

7 Depreciation

Depreciation on tangible asset is provided on the straight-line method over the useful lives of assets estimated by the Management, which is as per Schedule II of the Companies Act, 2013. Depreciation on assets purchased / sold during a period is proportionally charged. The Management estimates the useful lives of fixed assets as follows:-

Years

Buildings 30

Plant and Machinery 15

Office equipment 5

Electrical fittings 10

Computer - Servers 5

Computer - Others 3

Furniture and Fixtures 10

Vehicles 6

8 Impairment Policy

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. The recoverable amount is the higher of an asset's net selling price or its value in use. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

9 Investments

Investments that are readily realizable and intend to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Long term investments are stated at cost less any diminution in their value, which is other than temporary. Current Investments are stated at lower of cost and market value. Unquoted long term investments are valued at lower of cost or latest available break up value.

10 Research and Development

Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to Fixed Assets.

11 Foreign currency transaction

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are restated at year-end rates. The exchange difference on restatement of monetary assets and liabilities and realized gains and losses on foreign exchange transactions other than those relating to fixed assets are recognized in the profit and loss account. Exchange difference in respect of liabilities incurred to acquire fixed assets is adjusted to the carrying amount of such. Fixed assets

12 Segment Reporting Policies

Identification of segment is based on the major manufacturing products.

13 Earnings per share

Basic and diluted earnings per share are calculated by dividing the net profit/ loss for the year by the weighted average number of equity shares outstanding during the period.

14 Provisions and contingent liabilities

A provision is recognized when the company has a present obligation resulting from past events and it is probable that an outflow of resources will be required to settle the obligation for which a reliable estimate can be made. Provisions are based on management's best estimate of the amount required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect revision in estimates

The company has decided to provide for doubtful debts if debtors remain outstanding above one year.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

15 Provision for Taxation

a) Provision for Taxation comprises of current and deferred tax and includes any adjustments related to past periods in current and / or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant period.

b) Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961.

c) Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on prevailing enacted or subsequently enacted tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.

d) Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each Balance Sheet date.

16 Estimated value of contracts (Net of Advances) to be executed on capital account and not provided for Rs.Nil (Previous year Rs.Nil).

17 Company has not provided contingent liability of Rs. 3.96 Lacs against Central Excise assessment for year 2007- 2008, and Liability towards pending C forms have not been provided on account of uncertainty.

18 Pakistan unit of the Company continues to be under the control of Pakistan Government. It has not been possible to establish any communication with the said unit so far. Therefore, statement of Assets and Liabilities as at 30th June 1964 based on the last reports received have been incorporated in the Balance sheet as pre devaluation rate of rate of exchange.

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Mar 31, 2014

1 Background

KAYCEE INDUSTRIES LIMITED is a manufacturing and trading company in the field of industrial switches, counters, water meters, electrical components, etc.

2 BASIS OF PREPARATION OF FINANCIAL STATEMENT

a) The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles generally accepted in India and in accordance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 (''the Act'') The accounting policies applied by the company are consistent with those used in previous year.

b) Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the year. Actual results could differ from those estimates.

3 REVENUE RECOGNITION:

Revenue is recognised when the significant risks and rewards of ownership of the goods have been passed to the buyer and are recorded net of returns, trade discounts, rebates, sales tax & excise duty where ever applicable.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognised when the Company''s right to receive dividend is established by the Balance Sheet date.

4 EMPLOYEE BENEFITS

I) Short Term Employees Benefits:

All short term employee benefits such as salaries, wages, bonus, short term compensated absences, awards, ex gratia, performance pay, medical benefits, which fall due within 12 months of the period in which the employee renders the related service which entitles him to avail such benefits and non accumulating compensated absences are recognized on an undiscounted basis and charged to profit and loss account

II) Post Employment Benefit:

a) Defined Contribution Plan

Company''s contribution to the provident fund based on a percentage of salary is made to Provident Fund Trust, which are administered by the trustees.

b) Defined Benefit Plan

Gratuity:

The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under this plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium on Projected Unit Credit Method, which is required to be paid by the Company and is debited to the profit and loss account on an accrual basis. Actuarial gains or losses arising during the year are recognized in the profit and loss account.

c) Leave encashment is provided for on the basis of an actuarial valuation carried out by an Actuary at the end of each financial year and debited to the profit and loss account.

5 Inventories

Inventories of Raw Material, Components, Material in Process, Finished goods, Stores & Packing materials and traded goods are stated ''At Cost or Net Realizable value'' whichever is lower.

Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition.

Company uses FIFO method for valuation. Cost of finished goods includes excise duty.

6 Fixed Assets Tangible Assets

Fixed assets are stated at cost less accumulated depreciation, amortization and impairment loss if any. The company capitalizes direct costs including taxes, duty, freight and incidental expenses attributable to the acquisition and installation of fixed assets. Capital work-in-progress is stated at cost.

Depreciation

Depreciation is provided using the written down value method in accordance with the schedule XIV of the Companies Act, 1956. Fixed assets with estimated useful life of less than 1 year & onetime use are fully depreciated in the year of acquisition. Depreciation on assets acquired or disposed off during the year is provided on a pro-rata basis from/up to the date of acquisition/disposal.

7 Impairment Policy

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. The recoverable amount is the higher of an asset''s net selling price or its value in use. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

8 Investments

Investments that are readily realizable and intend to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Long term investments are stated at cost less any diminution in their value, which is other than temporary. Current Investments are stated at lower of cost and market value. Unquoted long term investments are valued at lower of cost or latest available break up value.

9 Research and Development

Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to Fixed Assets.

10 Foreign currency transaction

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are restated at year-end rates. The exchange difference on restatement of monetary assets and liabilities and realized gains and losses on foreign exchange transactions other than those relating to fixed assets are recognized in the profit and loss account. Exchange difference in respect of liabilities incurred to acquire fixed assets is adjusted to the carrying amount of such. Fixed assets

11 Segment Reporting Policies

Identification of segment is based on the major manufacturing products.

12 Earnings per share

Basic and diluted earnings per share are calculated by dividing the net profit/ loss for the year by the weighted average number of equity shares outstanding during the period.

13 Provisions and contingent liabilities

A provision is recognized when the company has a present obligation resulting from past events and it is probable that an outflow of resources will be required to settle the obligation for which a reliable estimate can be made. Provisions are based on management''s best estimate of the amount required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect revision in estimates

The company has decided to provide for doubtful debts if debtors remain outstanding above one year.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

14 Provision for Taxation

a) Provision for Taxation comprises of current and deferred tax and includes any adjustments related to past periods in current and / or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant period.

b) Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961.

c) Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on prevailing enacted or subsequently enacted tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.

d) Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax assets are reviewed at each Balance Sheet date.

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Mar 31, 2012

1 BACKGROUND

KAYCEE INDUSTRIES LIMITED is a manufacturing and trading company in the field of industrial switches, counters, water meters, electrical components, etc.

2 BASIS OF PREPERATION OF FINANCIAL STATEMENT

a) The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles generally accepted in India and in accordance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 ('the Act') The accounting policies applied by the company are consistent with those used in previous year except for the change in policy explained below

During the year ended March 31, 2012 the revised schedule VI notified under the Companies Act, 1956 has become applicable to the company for preparation of its financial statements. Except accounting for dividend on investment in subsidiary companies the adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. The company has also reclassified the previous year figures in accordance with requirements applicable in current year.

b) Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the year. Actual results could differ from those estimates.

3 REVENUE RECOGNITION:

Sales are recognized when goods leave from factory premises and are recorded net of returns, trade discounts, rebates, sales tax & excise duty where ever applicable. And interest accrues on the time basis determined by the amount outstanding and the reate applicable.

4 EMPLOYEE BENEFITS

I) Short Term Employees Benefits:

All short term employee benefits such as salaries, wages, bonus, short term compensated absences, awards, ex gratia, performance pay, medical benefits, which fall due within 12 months of the period in which the employee renders the related service which entitles him to avail such benefits and non accumulating compensated absences are recognized on an undiscounted basis and charged to profit and loss account

II) Post Employment Benefit:

a) Defined Contribution Plan

Company's contribution to the provident fund based on a percentage of salary is made to Provident Fund Trust, which are administered by the trustees.

b) Defined Benefit Plan Gratuity:

The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under this plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium on Projected Unit Credit Method, which is required to be paid by the Company and is debited to the profit and loss account on an accrual basis. Actuarial gains or losses arising during the year are recognized in the profit and loss account.

Leave encashment is provided for on the basis of an actuarial valuation carried out by an Actuary at the end of each financial year and debited to the profit and loss account.

5 Inventories

Inventories of Raw Material, Components, Material in Process, Finished goods and traded goods are stated 'At Cost or Net Realizable value' whichever is lower. Stores & Packing materials are stated 'At or below cost'. Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition. Company has used FIFO method for valuation. Finished goods are inclusive of excise duty.

6 Fixed Assets Tangible Assets

Fixed assets are stated at cost less accumulated depreciation, amortization and impairment loss if any. The company capitalizes direct costs including taxes, duty, freight and incidental expenses attributable to the acquisition and installation of fixed assets. Capital work-in-progress is stated at cost.

Depreciation

Depreciation is provided using the written down value method in accordance with the schedule XIV of the Companies Act, 1956. Fixed assets with estimated useful life of less than 1 year & one time use are fully depreciated in the year of acquisition. Depreciation on assets acquired or disposed off during the year is provided on a pro-rata basis from/up to the date of acquisition / disposal.

7 Impairment Policy

The company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. The recoverable amount is the higher of an asset's net selling price or its value in use. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

8 INVESTMENTS

Investments that are readily realizable and intend to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Long term investments are stated at cost less any diminution in their value, which is other than temporary. Current assets are stated at lower of cost and market value. Unquoted long term investments are valued at lower of cost or latest available break up value.

9 RESEARCH AND DEVELOPMENT

Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to Fixed Assets.

10 FOREIGN CURRENCY TRANSACTION

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are restated at year-end rates. The exchange difference on restatement of monetary assets and liabilities and realized gains and losses on foreign exchange transactions other than those relating to fixed assets are recognized in the profit and loss account. Exchange difference in respect of liabilities incurred to acquire fixed assets is adjusted to the carrying amount of such. Fixed assets

11 SEGMENT REPORTING POLICIES

Identification of segment is based on the major manufacturing products.

12 EARNING PER SHARE

Basic and diluted earnings per share are calculated by dividing the net profit/ loss for the year by the weighted average number of equity shares outstanding during the period.

13 PROVISIONS

A provision is recognized when the company has a present obligation resulting from past events and it is probable that an outflow of resources will be required to settle the obligation for which a reliable estimate can be made. Provisions are based on management's best estimate of the amount required to settle the obligation at the balance sheet date. Provisions are revjewed at each balance sheet date and adjusted to reflect revision in estimates. The company has decided to provide Bad and doubtful debts if debtors remain outstanding over and above one year.

14 INCOME TAX

a) Tax on income for the current period is determined on the basis of taxable income after considering the various deductions available under The Income Tax Act, 1961.

b) Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on prevailing enacted or subsequently enacted regulations.

c) Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax

assets can be realized. At each reporting date the company reassesses the unrecognized deferred tax assets and reviews the deferred tax assets recognized.

15 Estimated value of contracts (Net of Advances) to be executed on capital account and not provided for Rs.50.35 Lacs (Previous year Rs.4.29 Lacs).

16 Company has not provided contingent liability of Rs. 3.96 Lacs against Central Excise assessment for year 2007- 2008, and Liability towards pending c forms have not been provided on account of uncertainty.

17 Pakistan unit of the Company continues to be under the control of Pakistan Government. It has not been possible to establish any communication with the said unit so far. Therefore, statement of Assets and Liabilities as at 30th June 1964 based on the last reports received have been incorporated in the Balance sheet as pre devaluation rate of rate of exchange.

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Mar 31, 2011

A) The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles generally accepted in India and in accordance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 ('the Act'). The Company follows mercantile system of accounting and recognizes Income and Expenditure on an accrual basis except those with significant uncertainties.

b) Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the year. Actual results could differ from those estimates.

c) The Accounting policies applied by the company are consistent with those used in the previous year

3. REVENUE RECOGNITION:

Sales are recognized when goods leave from factory premises and are recorded net of returns, trade discounts, rebates, sales tax & excise duty where ever applicable.

4. EMPLOYEE BENEFITS

a) Short Term Employees Benefits:

All short term employee benefits such as salaries, wages, bonus, short term compensated absences, awards, exgratia, performance pay, medical benefits, which fall due within 12 months of the period in which the employee renders the related service which entitles him to avail such benefits and non accumulating compensated absences are recognized on an undiscounted basis and charged to profit and loss account

b) Defined Benefit Plan

Gratuity:

The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under this plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium on Projected Unit Credit Method, which is required to be paid by the Company and is debited to the profit and loss account on an accrual basis. Actuarial gains or losses arising during the year are recognized in the profit and loss account.

Leave encashment is provided for on the basis of an actuarial valuation carried out by an Actuary at the end of each financial year and debited to the profit and loss account.

Defined Contribution Plan

Company's contribution to the provident fund based on a percentage of salary is made to Provident Fund Trust, which are administered by the trustees.

5. Inventories

Inventories of Raw Material, Components, Material in Process, Finished goods and traded goods are stated 'At Cost or Net Realizable value' whichever is lower. Stores & Packing materials are stated 'At or below cost'.

Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition.

Company has used FIFO method for valuation. Finished goods are inclusive of excise duty.

6. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation, amortization and impairment loss if any. The company capitalizes direct costs including taxes, duty, freight and incidental expenses attributable to the acquisition and installation of fixed assets. Capital work-in-progress is stated at cost.

Depreciation is provided using the written down value method in accordance with the schedule XIV of the Companies Act, 1956. Fixed assets individually costing upto Rs.5,000 are fully depreciated in the year of acquisition. Depreciation on assets acquired or disposed off during the year is provided on a pro-rata basis from/up to the date of acquisition/disposal.

7. Impairment of Assets

The carrying value of assets is reviewed for impairment, when events or changes in circumstances indicate that the carrying values may not be recoverable. In addition, at each balance sheet date, the company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the asset recoverable is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value on an appropriate discount factor.

8. Investments

Investments that are readily realizable and intend to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Long term investments are stated at cost less any diminution in their value, which is other than temporary. Current assets are stated at lower of cost and market value. Unquoted long term investments are valued at lower of cost or latest available break up value.

9. Research and Development

Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to Fixed Assets.

10. Foreign currency transaction

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are restated at year-end rates. The exchange difference on restatement of monetary assets and liabilities and realized gains and losses on foreign exchange transactions other than those relating to fixed assets are recognized in the profit and loss account. Exchange difference in respect of liabilities incurred to acquire fixed assets is adjusted to the carrying amount of such. Fixed assets

11. RIGHT ISSUE

The Company has utilized remaining balance amount of Rs. Nil (RY. Rs 10.82 lacs) out of the right issue proceeds.

12. Segment Reporting Policies

Identification of segment is based on the major manufacturing products.

13. Earning per share

Basic and diluted earnings per share are calculated by dividing the net profit/ loss for the year by the weighted average number of equity shares outstanding during the period.

14. Provisions

A provision is recognized when the company has a present obligation resulting from past events and it is probable that an outflow of resources will be required to settle the obligation for which a reliable estimate can be made. Provisions are based on management's best estimate of the amount required to settle the obligation at the balance sheet date. Provisions are reviewed at each balance sheet date and adjusted to reflect revision in estimates. The company has decided to provide Bad and doubtful debts if debtors remain outstanding over and above one years

15. Income Tax

A tax expense comprises current and deferred taxes. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with The Income Tax Act, 1961. Deferred Income Tax Reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

The differed tax asset and deferred tax liability is calculated by applying tax rate and tax laws that have been enacted or substantially enacted at the balance sheet date.

Deferred taxes assets are recognized and carried forward for all deductible timing differences only if there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The deferred tax liability is arising due to timing difference on depreciation charged where as deferred tax assets arising mainly on account of Leave encashment & Gratuity.

16. Estimated value of contracts (Net of Advances) to be executed on capital account and not provided for Rs. 4.29Lacs (Previous year Rs.0.66 Lacs).

17. Company has not provided contingent liability of Rs 12.88 Lacs against Sales Tax Assessment for year 2000-2001 and Rs. 3.96 Lacs against Central Excise assessment for year 2007- 2008.

18. Pakistan unit of the Company continues to be under the control of Pakistan Government. It has not been possible to establish any communication with the said unit so far. Therefore, statement of Assets and Liabilities as at 30th June 1964 based on the last reports received have been incorporated in the Balance sheet as pre devaluation rate of rate of exchange as per Schedule7.

21. Details of Licensed and Installed Capacity, Production, Stock and Turnover.

25. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/Payable under this act have not been given.

26. Employee Benefits

With effect from 1st April 2007, the company has adopted revised Accounting Standard 15 "Employee Benefits". Pursuant to the adoption, no adjustment was required to be made to general reserve of revised As -15 as the impact was insignificant.

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Mar 31, 2010

A) The financial statements are prepared under the historical cost convention, on an accrual basis, in conformity with the accounting principles generally accepted in India and in accordance with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956 (the Act). The Company follows mercantile system of accounting and recognizes Income and Expenditure on an accrual basis except those with significant uncertainties.

b) Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the year. Actual results could differ from those estimates.

c) The Accounting policies applied by the company are consistent with those used in the previous year

3 REVENUE RECOGNITION:

Sales are recognized when goods leave from factory premises and are recorded net of returns, trade discounts, rebates, sales tax & excise duty where ever applicable.

4 EMPLOYEE BENEFITS

a) Short Term Employees Benefits:

All short term employee benefits such as salaries, wages, bonus, short term compensated absences, awards, exgratia, performance pay, medical benefits, which fall due within 12 months of the period in which the employee renders the related service which entitles him to avail such benefits and non accumulating compensated absences are recognized on an undiscounted basis and charged to profit and loss account

b) Defined Benefit Plan Gratuity:

The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under this plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium on Projected Unit Credit Method, which is required to be paid by the Company and is debited to the profit and loss account on an accrual basis. Actuarial gains or losses arising during the year are recognized in the profit and loss account.

Leave encashment is provided for on the basis of an actuarial valuation carried out by an Actuary at the end of each financial year and debited to the profit and loss account.

Defined Contribution Plan

Companys contribution to the provident fund based on a percentage of salary is made to Provident Fund Trust, which are administered by the trustees.

5 Inventories

Inventories of Raw Material, Components, Material in Process, Finished goods and traded goods are stated At Cost or Net Realizable value whichever is lower. Stores & Packing materials are stated At or below cost.

Cost of inventories comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition.

Company has used FIFO method for valuation. Finished goods are inclusive of excise duty.

6 Fixed Assets

Fixed assets are stated at cost less accumulated depreciation, amortization and impairment loss if any. The company capitalizes direct costs including taxes, duty, freight and incidental expenses attributable to the acquisition and installation of fixed assets. Capital work-in- progress is stated at cost.

Depreciation is provided using the written down value method in accordance with the schedule XIV of the Companies Act, 1956. Fixed assets individually costing upto Rs.5,000 are fully depreciated in the year of acquisition. Depreciation on assets acquired or disposed off during the year is provided on a pro-rata basis from/up to the date of acquisition/disposal.

7 Impairment of Assets

The carrying value of assets is reviewed for impairment, when events or changes in circumstances indicate that the carrying values may not be recoverable. In addition, at each balance sheet date, the company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the asset recoverable is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value on an appropriate discount factor.

8 Investments

Investments that are readily realizable and intend to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Long term investments are stated at cost less any diminution in their value, which is other than temporary. Current assets are stated at lower of cost and market value. Unquoted long term investments are valued at lower of cost or latest available break up value.

9 Research and Development

Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to Fixed Assets.

10 Foreign currency transaction

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are restated at year-end rates. The exchange difference on restatement of monetary assets and liabilities and realized gains and losses on foreign exchange transactions other than those relating to fixed assets are recognized in the profit and loss account. Exchange difference in respect of liabilities incurred to acquire fixed assets is adjusted to the carrying amount of such. Fixed assets

11 RIGHT ISSUE

The Company has utilized remaining balance amount of Rs. 10.82 lacs (P.Y. Rs 97.81 lacs) out of the right issue proceeds.

12 Segment Reporting Policies Identification of segment is based on the major manufacturing products.

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Mar 31, 2003

1. ACCOUNTING CONVENTION:

The Company prepares its accounts under the historical cost convention using the accrual method of accounting except for the items stated below :

(a) Dividends are accounted on cash basis.

(b) Insurance claims are booked on the basis of liability as admitted by the Insurance Company.

(c) Encashment of earned leave of the employees will be accounted for as an when paid.

(d) Overdue interest from customers is accounted for on receipt basis.

2. REVENUE RECOGNITION:

Sales are recognised when goods are left from factory premises and are recorded net of returns, trade discounts, rebates and sales tax but includes excise duty where applicable.

3. STAFF BENEFITS :

Superannuation scheme and Deposit linked insurance scheme are managed through L.I.C. The Company has created a Trust and has taken a Group Gratuity Policy with the Life Insurance Corporation of India for future payment of gratuity of retiring employees. The premium thereon has been so adjusted as to cover the liability in respect of all employees at the end of their anticipated service with the Company.

4. CURRENT ASSETS:

(a) Inventories :

Inventories of Raw Material, Components, Material in Process, Finished goods and Traded goods are stated At Cost or Net Realiasable value whichever is lower. Stores & Packing material are stated At or below cost.

Cost of inventories comprise of all cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition.

Company has used FIFO cost formula for valuation. Finished goods are inclusive of excise duty.

(b) Sale and Purchase bills discounted with banks remaining outstanding at the Year-end have been included in Sundry Debtors and Sundry Creditors respectively.

5. FIXED ASSETS :

Tangible assets are stated at cost less depreciation. Depreciation is provided on written down value method in accordance with the Companies Act, 1956.

6. INVESTMENTS :

Investments are stated as under :

Unquoted long term investment: Lower of cost or latest available break up value.

7. RESEARCH & DEVELOPMENT :

Revenue expenditure on research and development is charged against the profit of the year which it is incurred. Capital expenditure on research and development is shown as an addition to Fixed Assets.

8. FOREIGN CURRENCY TRANSACTION :

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

(b) Foreign Exchange gains or losses arising out of transactions settled during the year are charged to Profit & Loss Account.

(c) Monetary items denominated in a foreign currency and outstanding at the Balance Sheet date are translated at year end rates and gains/losses arising out of such transactions are charged to Profit and Loss Account.

9. DEFFERED TAXES :

The deffered tax asset and deffered tax liability is calculated by applying tax rate and tax laws that have been enacted or substantially enacted by the balance sheet date.

The deffered tax liability is arrising due to timing difference on depreciation charged whereas deffered tax assets arising mainly on account of brought forward unabsorbed business loss, unabsorbed depreciation and disallowance u/s 43B of Income tax act.

10. Estimated value of contracts (Net of Advances) to be executed on capital account and not provided for Rs. 3.18 Lacs (Previous year Rs. 3.26 Lacs).