Accounting Policies of KG Petrochem Ltd. Company

Mar 31, 2025

MATERIAL ACCOUNTING POLICIES, ASSUMPTIONS AND NOTES

2 BASIS OF PREPARATION

2.1 Ministry of corporate affairs has notified roadmap to implement IND AS notified under Companies (Indian Accounting Standard)
Rules 2015 as amended by the Companies (Indian Accounting Standard) Rules 2016 and presentation requirements of Division II of
Schedule 111 to the Companies Act. 2015 (IND AS compliant Schedule 111), to the extent applicable. According to the said roadmap the
company is required to apply 1NI> AS in preparation of financial statement from the financial year beginning from 1“ April 2017.

2.2 file significant accounting policies used in preparing the financial statements are set out in Notes to the Standalone financial
Statements.

2.3 The preparation of the financial statements requires management to make estimates, judgements and assumptions Actual results
could vary from these estimates. The estimates, judgements and underlying assumptions arc reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the
fieriod of the revision and future periods if the revision affects both current and future years (refer Notes on critical accounting
estimates, assumptions and judgements), The management believes that the estimates used in preparation of the financial statements
are prudent and reasonable.

3 STATEMENT OF COMPLIANCE

The financial statements comprising of the 1 til a net’ Sheet Statement of Profit and l-oss, Statement of changes in equity, Statement of
Cash Flow together with notes comprising a summary of Significant Accounting Policies and Other Explanatory Information for the
year ended 31st March 2025 and comparative¹ information in respect of the preceding period have been prepared on going concern
basis following accrual basis of accounting and complying with Indian Accounting Standards (Ind AS) notified under the Companies
(Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the comapanics Act, 2013 (to the extent applicable).

4 ACCOUNTING POLICIES

4.1 Basis of Measurement

The standalone financial statements have been prepared on accrual basis and under the historical cost convention except following
which have been measured at fair value;

a Financial assets and liabilities except for those carried at amortised cost a

b Assets held for sale - measured at carrying amount or fair value less cost of disposal, whichever is less
c Defined benefit plans - Plan assets measured at fair value

These financial statements are presented In Indian Rupees (INR), which is the Company’s functional currency. All amounts disclosed
in the Financial Statements and notes have been rounded off to the nearest lakhs (with two places of decimal) as per the requirement
of Schedule m, unless otherwise stated.

4.2 Current versus non-current classification of Assets and Liabilities

The Company presents assets and liabilities in statement of financial [xisitlon based on current/non-current classification.

The company has presented current or non-current classification of asset and liabilities as per Company''s normal operating cycle and
other criteria as set out in the Division II of Schedule 111 to Companies Act 2013.

An asset is classified as current when it is:

(a) Fxpected to be realised or intended to be sold or consumed in normal operating cycle,

(b) i leld primarily for the purpose of trading,

(c) Hxpccted to be realised within twelve months after the reporting period, or

(d) 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 classified as current when it is:

(a) Expcctcd to be settled in normal operating cycle,

(b) Held primarily for the purpose of trading,

(c) Due to be settled within twelve months after the reporting period, or

(d) There is no unconditional right to defer the settlement of the liability for al least twelve months after the reporting period All other
liabilities are classified as non-current.

Deffered tax assets/liabilities are classified as non-current. The operating cycle Is the time between the acquisition of assets for
processing and their realisation in cash or cash equivalents. Deferred tax assets and liabilities are classified as non-current assets and

4.3 Inventories

a Finished goods:

Finished goods are valued at lower of cost or net realisable value. Cost includes direct materials and labour and a portion of
manufacturing overhead based on normal operating capacity Net realisable value is the estimated selling price in the ordinary course
of business, less estimated costs of completion and estimated costs necessary to make the sale. Finished Goods are measured at
average cost.

b Wll’ and Stores b Spares:

Raw materials, components, stores and spares and work-in progress are valued at cost. However, materials and other items held for
use In the production of inventories are not written down below cost if the finished products in which they will be incorporated un¬
expected to be sold at or above cost. Cost of raw materials, components, slon-s and spares Is determined on FIFO basis.Cost of Work in
Progress is measured at Weighted average Basis.

Capital spares that qualifies the criteria of property, plant and equipmenl are recognised as PPF. Accordingly the company has
capitalized spares having useful life of more than 12 months and corrospondlng depreciation is charged on them.

4.4 Statement of cash flows

Cash flows are reported using the method as prescribed in INF) AS 7 Statement of Cash flows'', where by net profit before tax is
adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expense associated with investing or financial cash fkiws. The cash flows from operating, investing
and financing activities of the Company arc segregated.

4.5 Prior period Errors

a Prior period errors include omissions and misstatements arising from a failure to use reliable information that was available or could
have been obtained when financial statements for those periods were approved for issue,
b Prior period errors relating to the Iasi comparative period will be shown by restating the comparative figures of Balance sheet and
Profit and loss, wherever necessary. Thus, it will be disclosed In the comparative financial statements as if the error had not even
occurred.

And If the error relates to earlier financial yearsfFY 21-22 or before), then it will be adjusted from the asset/liability and retained
earnings of the last comparative period shown(IY 22-23). a

4.6 Revenue recognition and other income

a Revenue on sale of products

• The Company recognise revenues on accrual basis and measured it at the fair value of the consideration received or receivable, net of
discounts, volume rebates, GST.

• Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the
consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing
management involvement with the goods, and the amount of revenue can be measured reliably.

• Export sale has been recognised at the time of removal of goods from factory at Invoice value (whether FOB or OF) on the basis of
exchange rates declared by Custom Department for that particular month. I lowever, the Invoices booked in the end of the current
financial year and are custom cleared in next financial year, then In that case- such export is considered in next financial year on the
basis of the LHC date

• No significant financing component exists in the sales.

• Other operating revenue - Export incentives under various scheme* an- accounted in the year of export at estimated realisable value.

• GST Returns Includes Sales by Agency Division of the company as a consignment stockist to customers and stock transfer from
GAII./BCP1, while commission income is reflected in the financial statements as per the accounting policy.

Other income

a Interest

• Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which
is the rale that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net
carrying amount on initial recognition.

b Dividend

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

Property, plant and equipment are tangible items that:

(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and

(b) are expected to be used during more than one period.

Items such as spare parts, stand-by equipment and servicing equipment are recognised in accordance with this Ind AS when they
meet the definition of property, plant and equipment. Otherwise, such items are classified as Inventory and recognised in the
statement of profit and loss on consumption.

Initial recognition: The Company has applied for the one time transition exemption of considering the carrying cost on the transition
date i.e. April 1, 201h as the deemed cost under IND AS. Hence regarded thereafter as historical cost.

An item of Property, plant and equipment recognized as an asset if and only if it is probable that future economic benefits associated
with the item will flow to the company and the cost of the item can be measured reliably

Items of Property, plant and equipment are initally recognised at cost Subsequently measurement is done at cost less accumulated
depreciation/amortisation and accumulated impairment losses, if any. Lease hold land Is carried at Revaluation Model.

The initial cost of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes, and any
directly attributable rusts of bringing an asset to working condition and location for its intended use It also includes the initial
estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

When parts of an item of property, plant and equipment have different useful lives, they are recognised separately.

Subsequent expenses and recognition: Suscqurnl expenditure is recognised as an increase In the carrying amount of the asset when
it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be
measured reliably.

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable
that the future economic benefit* embodied within the part will flow to the company and its cost can be measured reliably. All other
expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing
parts, are charged to profit and loss account for the period in which such expense are incurred.

Subsequently Property, Plant and Equipment are carried at cost less accumulated depreciation/amortisation and accumulated
impairment losses, If any. I ease hold land is carried out at Revaluation Model.

De-Recognition: Property, plant and equipment is derecognized when no future economic benefits an^- expected from their use or
upon their disposal.

I he gain or loss arising on the de-recognition or disposal or retirement of an item of property, plant and equipment is determined as
the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and loss
on the date of disposal or retirement.

PPE costing up to Rs 5,000 each are fully depreciated in the year of purchase/installation

DepreciatioVamortisation: Property. Plant and Equipments is depreciated on Straight Une Method in the manner prescribed in
Schedule II to the Companies Act, 2013. Depreciation on the the property, plant and equipment added / disposed off / discarded
during the year has been provided on pro rata hasis with reference to the date of addition / disposition / dlscardation

Calicos* on disposal: Ihe gain or loss arising on the disposal or retirement ol an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of
Profit and Loss on the date of disposal or retirement.

Component accounting: Whim parts of an item of property, plant and equipment have different useful life, they are accounted for as
separate items (Major components) and are depreciated over the useful life respectively.

Projects under which assets are not ready for their intended use are disclosed under Capital Work-in-progress
Capital work in progress

The expenses relating to the construction of building is capitalised at the time when they are incurred and when the asset would be
completed and ready to use, the same shall be transferred to asset a/c.

In case of Plant and Machinery, the amount of CWIP shall be transferred to asset a/ c at the time when the plant would be used for
production. Depreciation is not recorded on capital work-in-progress until construction and installation Is complete and the asset is
ready for its intended use.

4.8 l.ejtggs

On March 30, 2019, ministry of corporate affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing leases standard,
Ind AS 17, l eases, and related interpretations The standard sets out the principles for the recognition, measurement, presentation and
disclosure of leases for both parties to a contract i.e., the lessee and lessor. Ind AS 116 introduces a single lessee accounting model and
require* a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of
low* value. Currently, operating lease expenses are charged to the Statement of l*rofit and loss. The standard also contains enhanced
disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17.

(>n completion of evaluation ol the effect of adoption of Ind AS 116, the Company is using the ''Modified Retrospective Approach’ for
transitioning to Ind AS 116 and took the cumulative adjustment to retained earnings on the date of initial application ( April 1, 2019).
The Company as elected certain available practical expedients on transition.

Ihe Company has adopted Ind AS 116'' I .eases'' effective April 1, 2019 and applied the Standard to its leases, pursuant to which it has
reclassified its leased asset as Right-of-Use Asset*

I he Company assess at contract inception whether a contract is, or contains, a lease. 1 hat 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 apply a single recognition and measurement approach for all leases. Ihe Company recognise nght-of-use assets
representing the right to use the underlying assets.

Right of use assets

The Company recognise right-of-use assets at the commencement date of the lease (i.e., Ihe 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 re¬
measurement 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. I he right-of-use assets are also subject to impairment.

4.9 Foreign Currency Transaction

a. Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction.

b. Monetary Items denominated in foreign currency at the reporting date and not covered by forward exchange contracts are translated
at the year end spot rates and those covered by forward contracts are restated at each reporting date by using forward rate for
remaining period prevailing on the reporting date and exchange rate difference was booked. The Exchange rate difference on
Forward Contract was charged to Statement of Profit & toss, since Fair Value Model has been adopted by the Company

c. Non-monetary items are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of
the transaction.

4.10 Government Grants

Government grants related to assets are presented in balance sheet by setting up the grant as deferred income under Non Current
I lability and the same is recognised in statement of profit and loss on a systematic basis

Government grant related to revenue is deducted in reporting the related expenses. LXiring the year the Company has received
interest subsidy under TUF Scheme, Customized Package Scheme and Interest Subvention which is deducted from expenses. ROSCTT.
.RODl''EP ft Duty Drawback (Other Export Incentive) recognised on accrual basis.

1.11 Retirement ft Employee benefits

a. Short - term Employee Bencfils:-

All employee benefits payable wholly within twelve months of rendering the service arc classified as short-term employee benefits
and they are recognised in the period in which the employee renders the related services

The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services
rendered as a liability after deducting any amount already paid.

b. I ong-term Employee Benefits:-

I ong-term employee benefits Compensated absences which are not expected to occur within twelve months after the end of the period
In which the employee renders the related service are recognised as a liability at the present value of the obligation as at the Balance
Sheet date The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried
nut at each Balance Sheet dale Actuarial gains and losses are recognised in the Statement of Profit and loss in the period in which
they occur.

c. Post-employment Benefits:-

Employce benefit that are payable after the completion of employment are Post-Employment Benefit (other than termination benefit).
These are of two types;

(a) Defined Contribution Plan: Contribution to superannuation fund is recognised as an expense in the Statement of Profit ft Loss as
it is Incurred. There are no other obligations other than the contribution payable to the respective trust. Eligible employees receive
benefits from a pnivldenl fund which is a defined contribution plan. Both the eligible employee and the Company make monthly
contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary,

(b) Deflned Benefit plan: The cost of providing Gratuity, a Defined Benefit plan, is determined using the Projected Unit Credit
Method, on the basis of actuarial valuations carried out by an independent actuarial valuer at each Balance Sheet date. Actuarial gains
and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to Other Comprehensive
Income in the period in which they arise. Other costs are accounted in statement of profit and loss. Moreover all the gratuity liabilities
of the company are covered under L1C Gratuity Scheme. Other long term benefits in the form of leave encashment is provided based
on the percentages notified by Government guidelines.

a

4.12 Borrowing Cost

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

Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their
intended uses are complete.

4.13 Earnings per share

• Basic earnings per share- is computed using the net profit for the year attributable to the shareholders'' and weighted average number
of shares outstanding during the year.

• Diluted earnings per share is computed using the net profit for the year attributable to the shareholder and weighted average number
of equity and potential equity shares outstanding during the year, except where the result would be anti-dilutive.

k r.f^s-v

4.14 Impairment of assets

An asset is considered as impaired when at the date of Balance Sheet there are indications of impairment and the carrying amount of
the asset exceeds its recoverable amount (i.e, the higher of the fair value less cost to sell and value In use). The carrying amount is
reduced to the recoverable amount and the reduction Ls recognized as an impairment kiss in the Statement of Profit and Loss. Any
impairment gain / loss is transferred to statement of profit and loss. A previously recognized impairment loss is reversed only if there
has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized.
The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
Such reversal Ls recognized in the Statement of Profit and Loss

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Mar 31, 2024

MATERIAL ACCOUNTING POLICIES, ASSUMPTIONS AND NOTES

2 BASIS OF PREPARATION

2.1 Ministry of corporate affairs has notified roadmap to implement IND AS notified under Companies (Indian Accounting Standard) Rules 2015 as amended by the Companies (Indian Accounting Standard) Rules 2016 and presentation requirements of Division II of Schedule III to the Companies Act, 2013 (IND AS compliant Schedule III), to the extent applicable. According to the said roadmap the company is required to apply IND AS in preparation of financial statement from the financial year beginning from 1^st April 2017,

12. The significant accounting policies used in preparing the financial statements are set out in Notes to the Standalone Financial Statements.

2.3 The preparation of the financial statements requires management to make estimates, judgements and assumptions. Actual results could vary from these estimates. The estimates, judgements and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years (refer Notes on critical accounting estimates, assumptions and judgements). The management believes that the estimates used in preparation of the financial statements are prudent and reasonable.

3 STATEMENT OF COMPLIANCE

The financial statements comprising of the Balance Sheet, Statement of Profit and Loss, Statement of changes in equity. Statement of Cash Flow together with notes comprising a summary of Significant Accounting Policies and Other Explanatory Information for the year ended 31st March 2024 and comparative information in respect of the preceding period have been prepared in all material aspects in accordance with IND AS as notified and duly approved by the Board of Directors and audit committee, along with proper explanation for material departures.

4 ACCOUNTING POLICIES

4.1 Basis of Measurement

The standalone financial statements have been prepared on accrual basis and under the historical cost convention except following which have been measured at fair value; a Financial assets and liabilities except for those carried at amortised cost

b Assets held for sale - measured at carrying amount or fair value less cost of disposal,whichever is less c Defined benefit plans - Plan assets measured at fair value

The standalone financial statements are presented in Indian Rupees, which is the Company''s functional and presentation currency.

4.2 Current versus non-current classification

The Company presents assets and liabilities in statement of financial position based on current/non-current classification

The Company has presented non-current assets and current assets before equity, non-current liabilities and current liabilities in accordance with Schedule III, Division n of Companies Act, 2013 notified by MCA.

An asset is classified as current when It is:

(a) Expected to be realised or intended to be sold or consumed in normal operating cycle,

(b) Held primarily for the purpose of trading,

(c) Expected to be realised within twelve months after the reporting period, or

(d)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 classified as current when it is:

(a) Expected to be settled in normal operating cycle,

(b) Held primarily for the purpose of trading,

(c) Due to be settled within twelve months after the reporting period, or

(d) There is no unconditional right to defer tire settlement of the liability for at least tweJve months after the reporting period. All other liabilities are classified as non-current.

Tire operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

4.3 Inventories

a Finished goods:

Finished goods are valued at lower of cost or net realisable value. Cost includes direct materials and labour and a portion of manufacturing overhead based on normal operating capacity.Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Finished Goods are measured at average cost.

b wrp and Stores & Spares:

Raw materials, components, stores and spares and work-in progress are valued at cost. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.Cost of Work in Progress is measured at Weighted average Basts.

Capital spares that qualifies the criteria of property, p.lant and equipment are recognised as PPE. Accordingly the company lias capitalized spares having useful life of more than 12 months and corresponding depreciation is charged on them.

4.4 Statement of cash flows

Cash flows are reported using the method as prescribed in IND AS 7 ''Statement of Cash flows'', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

4.5 Prior period Errors

a Prior period errors include omissions and misstatements arising from a failure to use reliable information that was available or could have been obtained when financial statements for those periods were approved for issue, b Prior period errors relating to the Iasi comparative period will be shown by restating the comparative figures of Balance sheet and Profit and loss, wherever necessary. Thus, it will be disclosed in the comparative financial statements as if the error had nol even occurred.

And if the error relates to earlier financial years(FY 21-22 or before), then it will be adjusted from the asset/liability and retained earnings of the last com para live period shown(FY 22-23).

4.6 Revenue recognition and other income a Revenue on sale of products

• The Company recognise revenues on accrual basis and measured it at the fair value of the consideration received or receivable, net of discounts, volume rebates, GST.

* Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and tire amount of revenue can be measured reliably.

* Export sale has been recognised at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month. However, the Invoices booked in the end of the current financial year and are custom cleared in next financial year, then in that case such export is considered in next financial year on the basis of the LEO date.

• No significant financing component exists in the sates.

* Other operating revenue - Export incentives under various schemes are accounted in the year of export at estimated realisable value.

* GST Returns Includes Sales by Agency Division of the company as a consignment stockist to customers and stock transfer from GAIL/BCPL, while commission income is reflected in the financial statements as per the accounting policy.

Other income a Interest

* Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rale applicable, which

is the rate tlrat exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying a mount on initial recognition. ,

b Dividend

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

4.7 Property. Plant and Equipment

Property, plant and equipment are tangible items that;

(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and

(b) are expected to be used during more titan one period.

Items such as spare parts, stand-by equipment and servicing equipment are recognised in accordance with this Ind AS when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory.

Initial recognition; The Company has applied for the one time transition exemption of considering the carrying cost on the transition date i,e. April 1, 2016

as the deemed cost under LND AS. Hence regarded thereafter as historical cost. The initial cost of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and location for its intended use. It also includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Subsequent expenses and recognition: Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are normally charged to the Statement of Profit and Loss in the period in which the costs are incurred. Major inspection and overhaul expenditure is capitalized. Subsequently Property, Plant and Equipment are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Lease hold land is carried out at Revaluation Model.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss on the date of disposal or retirement.

PPE costing up to Rs 5,000 each are fully depreciated in the year of purchase/installation,

Depreciation: Property, Plant and Equipments is depreciated on Straight Line Method in the manner prescribed in Schedule II to the Companies Act, 2015.

Gain/loss on disposal: The gain or loss arising on the disposal or re lire men t of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss on the date of disposal or retirement.

Component accounting: When parts of an item of property, plant and equipment have different useful life, they are accounted for as separate items (Major components) and are depreciated over the useful life respectively.

Projects under which assets are not ready for their intended use are disclosed under Capita] Work-in-progress.

Capital work in progress

The expenses relating to the construction of building is capitalised at the time when they are incurred and when the asset would be completed, the same shall be transferred to asset a/c.

In case of Plant and Machinery, the amount of CW1P shall be transferred to asset a/ c at the time when the plant would be used for production.

Replacement Accounting: Subsequent expenditure related lo an item of PPE is capitalised only when it is probable that future economic benefits associated with these will flow lo the Company and the cost of the item can be measured reliably. Such cost includes the cost of replacing part of the plant and equipment. When significant parts of plant and equipment arc required to be replaced at intervals, the Company- depreciates them separately based on their specific useful lives. Gains or losses arising from derecognition of the assets are measured as the difference between the nel disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

4.8 Leases

On March 30, 2019, ministry of corporate affairs has notified tnd AS 116, Leases. Ind AS 116 will replace the existing leases standard, Ind AS 17, Leases, and related interpretations. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee lo recognize assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the Statement of Profit and Loss. The standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17.

On completion of evaluation of the effect of adoption of Ind AS 116, the Company is using the ''Modified Retrospective Approach'' for transitioning lo Ind AS 116 and look the cumulative adjustment to retained earnings on the date of initial application ( April 1, 2019). The Company as elected certain available practical expedients on transition.

The Company has adopted Ind AS 116 ''Leases'' effective April 1, 2019 and applied the Standard to its leases, pursuant to which it has reclassified its leased asset as Right-of-Use Assets

The Company assess at contract inception whether a contract is, or contains, a lease. Thai 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 apply a single recognition and measurement approach for all leases. The Company recognise right-of-use assets representing the right to use the underlying assets.

Right of use assets

The Company recognise 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 slraight-line basis over the shorter of the lease term. The righl-of-use assets are also subject to impairment.

4.9 Foreign Currency Transaction

a. Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction.

b. Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end spot rates and those covered by forward contracts are restated at each reporting date by using forward rate for remaining period prevailing on the reporting date and exchange rate difference was booked. The Exchange rate difference on Forward Contract was charged to Statement of Profit & Loss, since Fair Value Model has been adopted by the Comapany.

4.10 Government Grants

Government grants related to assets are presented in balance sheet by setting up the grant as deferred income under Non Current Liability and the same is recognised in statement of profit and loss on a systematic basis.

Government grant related to revenue is deducted in reporting the related expenses. During the year the Company has received interest subsidy under TLTF Scheme, Customized Package Scheme and Interest Subvention which is deducted from expenses. ROSCTL ,RODTEP & Duty Drawback (Other Export Incentive) recognised on accrual basis.

The Company had received Terminal Excise Duty refund before 2018-19 which is recognised as other non current liabilities in the balance sheet and the same is recognised in statement of profit and loss on a systematic basis, since it has been treated as grant related to asset. All Government grants are recognised on accrual basis.

4.11 Retirement & Employee benefits

a. Short - term Employee Benefits;-

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are. recognised in the period in which the employee renders tire related services

The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

b. Long-term Employee Benefits^

Long-term employee benefits Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the obligation as at the Balance Sheet date. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur.

c. Post-employment Benefits^

(a) Defined Contribution Plan: Contribution to superannuation fund is recognised as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trust. Eligible employees receive benefits from a provident fund which is a defined contribution plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary.

(b) The cost of providing Gratuity, a Defined Benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by an independent actuarial valuer at each Balance Sheet date. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to Other Comprehensive Income in the period in which they arise. Other costs are accounted in statement of profit and loss. Moreover all the gratuity liabilities of the company are covered under LIC Gratuity Scheme. Other long term benefits in the form of leave encashment is provided based on the percentages notified by Government guidelines.

4.12 Borrowing Cost

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

4.13 Earnings per share

• Basic earnings per share is computed using''the net profit for the year attributable to the shareholders'' and weighted average number of shares outstanding during the year.

* Diluted earnings per share is computed using the net profit for the year attributable to the shareholder'' and weighted average number of equity and potential equity shares outstanding during the year, except where the result would be anfi-dilulive

4.14 Impairment of assets

An asset is considered as impaired when at the date of Balance Sheet there are indications of impairment and the carrying amount of the asset exceeds its recoverable amount (i.e. the higher of the fair value less cost to sell and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss. Any impairment gain / loss is transferred to statement of profit and loss. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the Statement of Profit and Loss.

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Mar 31, 2018

1 COMPANY OVERVIEW

KG Petrochem Private Limited is a listed company incorporated on 29.2.1980 under Companies Act, 1956 .The name of the company changed to KG Petrochem Limited as per fresh Certificate of Incorporation dated 24.8.1995 issued by Registrar of Companies, Rajasthan, Jaipur. The registered office of the Company is located at C-171,ROAD NO.9J, V.K.I.AREA, JAIPUR RJ 302013.

Presently the Company is engaged in the business of manufacturing and services as under:-

(i)Textile Division :-Manufacturing and marketing of terry towels, made-ups, readymade garment like bathrobes, babyhood towels, pillows etc. in the domestic and inter- national market.

(ii) Agency Division : Consignment Stockiest of GAIL (India) Ltd. for marketing and distribution of polymers in Rajasthan and

(iii) Technichal Textile Division : Manufacturing of artificial leather through technical textile

SIGNIFICANT ACCOUNTING POLICIES, ASSUMPTIONS AND NOTES 2 BASIS OF PREPARATION

2.1 Ministry of corporate affairs has notified roadmap to implement IND AS notified under Companies (Indian Accounting Standard) Rules 2015 as amended by the Companies (Indian Accounting Standard) Rules 2016. And according to the said roadmap the company is required to apply IND AS in preparation of financial statement from the financial year beginning from 1^st April 2017.

2.2 The Company has prepared its financial statements as per the IND AS for the financial year beginning on April 1, 2016 as the date of transition. These are the Company''s first annual financial statements prepared complying in all material respects with the IND AS notified by Ministry of Company Affairs (“MCA”).

2.3 The reconciliation of effects of the transition from Indian GAAP on the equity as at April 1, 2016 and March 31, 2017 and on the total comprehensive income for the year ended March 31, 2017 is disclosed in Notes to these financial statements. The financial statements have been prepared considering all IND AS as notified by MCA till the reporting date i.e. March 31, 2018. The standalone financial statements provide comparative information in respect of the previous year. In addition, the company presents its Balance Sheet as at the beginning of the previous year, which is the transition date to IND AS. i.e. April 1, 2016

2.4 The significant accounting policies used in preparing the financial statements are set out in Notes to the Standalone Financial Statements.

2.5 The preparation of the financial statements requires management to make estimates, judgments and assumptions. Actual results could vary from these estimates. The estimates, judgments and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years (refer Notes on critical accounting estimates, assumptions and judgments). The management believes that the estimates used in preparation of the financial statements are prudent and reasonable.

2.6 Amounts in these financial statements have, unless otherwise indicated, have been rounded off to ''rupees in lakhs ''up to two decimal points.

3 STATEMENT OF COMPLIANCE

The financial statements comprising of the Balance Sheet, Statement of Profit and Loss, Statement of changes in equity, Statement of Cash Flow together with notes comprising a summary of Significant Accounting Policies and Other Explanatory Information for the year ended 31st March 2018 and comparative information in respect of the preceding period and Balance Sheet as on transition date, i.e. 1st April 2016 have been prepared in all material aspects in accordance with IND AS as notified and duly approved by the Board of Directors, along with proper explanation for material departures.

4 ACCOUNTING POLICIES

4.1 Basis of Measurement

The standalone financial statements have been prepared on accrual basis and under the historical cost convention except following which have been measured at fair value: a Financial assets and liabilities except certain those carried at amortized cost b Assets held for sale - measured at carrying amount or fair value less cost of disposal, whichever is less c Defined benefit plans - Plan assets measured at fair value The standalone financial statements are presented in Indian Rupees, which is the Company''s functional and presentation currency.

4.2 Current versus non-current classification

The Company presents assets and liabilities in statement of financial position based on current/noncurrent classification

The Company has presented non-current assets and current assets before equity, non-current liabilities and current liabilities in accordance with Schedule III, Division II of Companies Act, 2013 notified by MCA.

An asset is classified as current when it is:

(a) Expected to be realized or intended to be sold or consumed in normal operating cycle,

(b) Held primarily for the purpose of trading,

(c) Expected to be realized within twelve months after the reporting period, or

(d)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 classified as current when it is:

(a) Expected to be settled in normal operating cycle,

(b) Held primarily for the purpose of trading,

(c) Due to be settled within twelve months after the reporting period, or

(d)There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

4.3 Inventories

a Finished goods:

Finished goods are valued at lower of cost or net realizable value. Cost includes direct materials and labour and a portion of manufacturing overhead based on normal operating capacity.Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. b Stores & Spares:

Raw materials, components, stores and spares and work-in progress are valued at cost. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.

Capital spares that qualifies the criteria of property, plant and equipment are recognized as PPE. Accordingly the company has capitalized spares having useful life of more than 12 months and corresponding depreciation is charged on them.

4.4 Statement of cash flows

Cash flows are reported using the method as prescribed in IND AS 7 ''Statement of Cash flows'', where

by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

4.5 Prior period Errors

a Prior period errors include omissions and misstatements arising from a failure to use reliable information that was available or could have been obtained when financial statements for those periods were approved for issue.

b Prior period errors relating to the last comparative period will be shown by restating the comparative figures of Balance sheet and Profit and loss, wherever necessary. Thus, it will be disclosed in the comparative financial statements as if the error had not even occurred. And if the error relates to earlier financial years(FY 15-16 or before), then it will be adjusted from the asset/liability and retained earnings of the last comparative period shown(FY 16-17

4.6 Revenue recognition and other income a Revenue on sale of products

The Company recognize revenues on accrual basis and measured it at the fair value of the consideration received or receivable, net of discounts, volume rebates, GST. Revenue is shown inclusive of excise duty since excise duty is liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not.

Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably.

Export sale has been recognized at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month. No significant financing component exists in the sales.

Other operating revenue - Export incentives under various schemes are accounted in the year of export.

Other income

a Interest

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition. b Dividend

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

4.7 Property, Plant and Equipment

Property, plant and equipment are tangible items that: (a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and (b) are expected to be used during more than one period.

Items such as spare parts, stand-by equipment and servicing equipment are recognized in accordance with this Ind AS when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory.

Initial recognition: The Company has applied for the one time transition exemption of considering the carrying cost on the transition date i.e. April 1, 2016 as the deemed cost under IND AS. Hence regarded thereafter as historical cost. The initial cost of property, plant and equipment comprises its purchase price, including non-refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and location for its intended use. It also includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Subsequent expenses and recognition: Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are normally charged to the Statement of Profit and Loss in the period in which the costs are incurred. Major inspection and overhaul expenditure is capitalized. Subsequently Property, Plant and Equipment are carried at cost less accumulated depreciation and accumulated impairment losses, if any.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss on the date of disposal or retirement.

PPE costing up to Rs 5,000 each are fully depreciated in the year of purchase/installation.

Depreciation: Property, Plant and Equipment’s except free hold land is depreciated on Straight Line Method in the manner prescribed in Schedule II to the Companies Act, 2013.

Capital work in progress

The expenses relating to the construction of building is capitalized at the time when they are incurred. And when the asset would be completed, the same shall be transferred to asset a/c.

In case of Plant and Machinery, the amount of CWIP shall be transferred to asset a/ c at the time when the plant would be used for production.

4.8 Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognized as operating leases.

Rental expense from operating leases is generally recognized on a straight-line basis over the relevant lease term other than where the rentals are structured solely to increase in line with expected general inflation to compensate for the increase in lessor''s expected inflationary cost, such increase is recognized in the year in which such benefits accrue. In the event that lease premiums are paid to enter into operating leases, such premiums are recognized as a prepaid expenditure and amortized over the period of lease.

As per AS10, Leasehold land was recognized as Fixed Asset and mortised over the lease period. However , as per IND AS 17, it has to be recognized ''Prepaid lease rental'' under ''Other Non-Current assets'' and amortized over the lease period.

Based on independent technical evaluation, the useful life of E.T.P is estimated shorter than prescribed in Schedule II of Companies Act, 2013, which is as under:

Name of Assets Life Taken

RO Membrane Less than 1 Year

Other Machinery in ETP/Water Tank 5 years

Gain/loss on disposal: The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss on the date of disposal or retirement.

Component accounting: When parts of an item of property, plant and equipment have different useful life, they are accounted for as separate items (Major components) and are depreciated over the useful life respectively.

Projects under which assets are not ready for their intended use are disclosed under Capital Work-in-progress.

4.9 Foreign Currency Transaction

Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction.

Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year-end spot rates and those covered by forward contracts are restated at each reporting date by using forward rate for remaining period prevailing on the reporting date and exchange rate difference was booked. The Exchange rate difference on Forward Contract was charged to Statement of Profit & Loss, since Fair Value Model has been adopted by the Company.

4.10 Government Grants

Government grants related to assets are presented in balance sheet by setting up the grant as deferred income under Non-Current Liability and the same is recognized in statement of profit and loss on a systematic basis.

Export incentive under "Duty Drawback Scheme" is accounted in the year of export at FOB value. The Company is eligible for MEIS Scheme. Income under MEIS scheme is accounted on accrual basis. Government grant related to revenue is deducted in reporting the related expenses. During the year the Company has received interest subsidy under TUF Scheme and Customized Package Scheme which is deducted from expenses.

The Company has received Terminal Excise Duty refund during the year which is recognized as other noncurrent liabilities in the balance sheet and the same is recognized in statement of profit and loss on a systematic basis, since it has been treated as grant related to asset. All Government grants are recognized on accrual basis.

Government Grant related to EPCG is recorded in the books at the time of import in accordance with IND AS -20 and same is amortized in the books of accounts in the ratio of depreciation charged on the respective asset as per IND AS 16.

4.11 Employee retirement benefits

A. Short - term Employee Benefits:-All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related services

The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

B Post-employment Benefits:-

(a)Defined Contribution Plan: Contribution to superannuation fund is recognized as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trust. Eligible employees receive benefits from a provident fund which is a defined contribution plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary.

(b)Defined Benefit Plan and Other Long Term Benefits: Retirement benefits in the form of gratuity is determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date.

Other long term benefits in the form of leave encashment is provided based on the percentages notified by Government guidelines.

(c)The cost of providing Gratuity, a Defined Benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuations carried out by an independent actuarial valuer at each Balance Sheet date. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to Other Comprehensive Income in the period in which they arise. Other costs are accounted in statement of profit and loss.

4.12 Borrowing Cost

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

4.13 Earnings per share

Basic earnings per share is computed using the net profit for the year attributable to the shareholders'' and weighted average number of shares outstanding during the year.

Diluted earnings per share is computed using the net profit for the year attributable to the shareholder'' and weighted average number of equity and potential equity shares outstanding during the year, except where the result would be anti-dilutive.

4.14 Impairment of assets

An asset is considered as impaired when at the date of Balance Sheet there are indications of impairment and the carrying amount of the asset exceeds its recoverable amount (i.e. the higher of the fair value less cost to sell and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss. Any impairment gain loss is transferred to statement of profit and loss.

4.15 Provisions and contingencies

(A) Provisions

- Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

- If the effect of the time value of money is material, provisions are discounted using equivalent period government securities interest rate.

- Unwinding of the discount is recognized in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

(B)Contingencies

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

- Contingent assets are not recognized in the books of the accounts but are disclosed in Board Report. However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset and the corresponding income is booked in the Statement of Profit and Loss.

4.16 Taxation

- Income tax expense represents the sum of Current Tax and Deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in Equity or Other comprehensive income, in such cases the tax is also recognized directly in equity or in other comprehensive income.

- Current tax provision is computed for Income calculated after considering allowances and exemptions under the provisions of the Income Tax Act 1961. Current tax assets and current tax liabilities are off set and presented as net.

- Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set, and presented as net.

4.17 Cash and cash equivalents

Cash and cash equivalents include cash in hand and at bank, deposits held at call with banks, Fixed Deposits.

For the purpose of the Statement of Cash Flows, cash and cash equivalents consists of cash and short term deposits, having maturity less than 3 months

4.18 Financial instruments - initial recognition, subsequent measurement and impairment

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

(a) Financial Assets

Financial Assets are measured at amortized cost or fair value through Other Comprehensive Income or fair value through Profit or Loss, depending on the judgment of the management for managing those financial assets and the assets'' contractual cash flow characteristics.

Subsequent measurements of financial assets are dependent on initial categorization. For impairment purposes, financial assets are assessed individually.

De-recognition of financial Asset

- A financial asset is primarily derecognized (i.e. removed from the balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership.

Impairment of financial assets (other than fair value)

- In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure: Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance

Trade receivables:

- A receivable is classified as a ''trade receivable'' if it is in respect to the amount due from customers on account of goods sold or services rendered in the ordinary course of business. Trade receivables are recognized initially at fair value and subsequently measured at amortized cost , less expected credit loss if any.

- Impairment is made for the expected credit losses. The estimated impairment losses are presented as a deduction from the value of trade receivables and the impairment losses are recognized in the Statement of Profit and Loss under "Other expenses".

- Subsequent changes in assessment of impairment are recognized in ECL and the change in impairment losses are recognized in the Statement of Profit and Loss under "Other Expenses".

- Individual receivables which are known to be uncollectible are written off by reducing the carrying amount of trade receivables and the amount of the loss is recognized in the Statement of Profit and Loss under "Other Expenses".

- Subsequent recoveries of amounts previously written off are credited to "Other Income". b Financial liabilities

At initial recognition, all financial liabilities other than those valued at fair value through profit and loss are recognized at fair value less transaction costs that are directly related to the issue of financial liability. Transaction costs of financial liability carried at fair value through profit or loss are expensed in profit or loss.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial measurement recognition at fair value through profit or loss.

Financial liabilities measured at amortized cost

After initial recognition, interest free Security Deposits and other financial liabilities are valued at Amortized cost using Effective Interest Rate method (EIR Method). The EIR amortization is included in finance costs in the Statement of Profit and Loss. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.

Trade and other payables

A payable is classified as ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.

De-recognition of financial liability

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid is recognized in profit or loss as "Other Income" or "Finance Expense".

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously

4.19 Assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less cost to sell. Any resulting impairment loss is recognized in the Statement of Profit and Loss. On classification as held for sale the assets are no longer depreciated.

4.20 Segment reporting

The Company identifies primary segments based on nature of products and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the managing board in deciding how to allocate resources and in assessing performance.

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Mar 31, 2016

1.1 System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

(I) Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.

(ii) Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a portion of manufacturing overheads based on normal operating capacity.

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

1.3 Cash Flow Statement (AS-3)

Cash flows are reported using the indirect method as prescribed in Accounting Standard 3 ''Cash Flow Statement'', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.4 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Schedule II of the Companies Act, 2013. Depreciation on additions/disposals during the year is provided on pro-rata basis.

Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.5 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realization but exclusive of Value Added Tax charged. Export sale has been recognized at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

Duty Drawback Scheme are accounted for in the year of export at FOB value. Import License under DEPB Scheme and Focus Product Scheme are accounted for at net realizable value on accrual basis.

1.6 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred up to the date of commencement of commercial use of the assets.

1.7 Foreign Currency Transaction (AS-11)

(I) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the yearend rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recognized over the life of the contract. Foreign exchange financial instruments in hand at the yearend are valued mark to market. Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss.

1.8 Government Grants (AS-12)

In case of depreciable assets, the cost of asset is shown at gross value and grant thereon is treated as Capital Grants which are withdrew over the period and in the proportion in which depreciation is charged.

1.9 Employee retirement benefits (AS-15)

(i) Short - term Employee Benefits:-

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related services

The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

(ii) Post-employment Benefits:-

(a) Defined Contribution Plan: Contribution to superannuation fund is recognized as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trusts.

(b) Defined Benefit Plan and Other Long Term Benefits: Retirement benefits in the form of gratuity, provident fund, post retirement medical benefit schemes and other long term benefits in the form of leave encashment, silver jubilee and long service award are determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Actuarial gains/losses are recognized immediately in the Statement of Profit & Loss.

1.10 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.11 Earning Per Share (AS-20)

Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

1.12 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year. Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit - Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India

1.13 Intangible Assets (AS-26)

Intangible assets are stated at cost less accumulated amount of amortization.

1.14 Impairment of assets (AS-28)

If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of future cash flows.

1.15 Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but disclosed in the notes. Contingent assets is neither recognized nor disclosed in the financial statement.

1.16 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.

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Mar 31, 2015

OVERVIEW

The Company was originally incorporated on 29.2.1980 under Companies Act, 1956 as KG Petrochem Private Limited .The name

of the company changed to KG Petrochem Limited as per fresh Certificate of Incorporation dated 24.8.1995 issued by Registrar of Companies, Rajasthan, Jaipur.

Presently the Company is engaged in the business of manufacturing and services as under-

(I) Textile Division:-Manufacturing and marketing of terry towels, made-ups etc. in the domestic and inter-national market.

(ii) Agency Division :Consignment Stockiest of GAIL (India) Ltd. for marketing and distribution of polymers in Rajasthan and

(iii) Garment Division: Manufacturing & marketing of readymade garment like bathrobes, babyhood towels, pillows etc.

1.1 System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

(I) Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.

(ii) Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and

labour and a portion of manufacturing overheads based on normal operating capacity.

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

1.3 Cash Flow Statement (AS-3)

Cash flows are reported using the indirect method as prescribed in Accounting Standard 3 'Cash Flow Statement', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.4 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Schedule II of the Companies Act, 2013. Depreciation on additions/disposals during the year is provided on pro-rata basis. Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.5 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realization but exclusive of Value Added Tax charged. Export sale has been recognized at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

Duty Drawback Scheme are accounted for in the year of export at FOB value. Import License under DEPB Scheme and Focus Product Scheme are accounted for at net realizable value on accrual basis.

1.6 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred up to the date of commencement of commercial use of the assets. *

1.7 Foreign Currency Transaction (AS-11)

(I) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction. (ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recognized over the life of the contract. Foreign exchange financial instruments in hand at the yearend are valued mark to market. Any income or expenses on account of exchange difference either on settlement or on i translation is recognized in the Statement of Profit & Loss.

1.8 Government Grants (AS-12)

In case of depreciable assets, the cost of asset is shown at gross value and grant thereon is treated as Capital Grants which are withdrew over the period and in the proportion in which depreciation is charged.

1.9 Employee retirement benefits (AS-15) (i) Short - term Employee Benefits:-

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related services The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

(ii) Post-employment Benefits:-

(a) Defined Contribution Plan: Contribution to superannuation fund is recognized as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trusts.

(b) Defined Benefit Plan and Other Long Term Benefits: Retirement benefits in the form of gratuity, provident fund, post retirement medical benefit schemes and other long term benefits in the form of leave encashment, silver jubilee and long service award are determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Actuarial gains/losses are recognized immediately in the Statement of Profit & Loss.

1.10 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.11 Earnings Per Share (AS-20)

Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

1.12 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year.

Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MATCredit- Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India

1.13 Intangible Assets (AS-26)

Intangible assets are stated at cost less accumulated amount of amortization.

1.14 Impairment of assets (AS-28)

If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of future cash flows.

1.15 Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but disclosed in the notes. Contingent assets is neither recognized nor disclosed in the financial statement. '

1.16 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.

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Mar 31, 2014

1.1 System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

(i) Raw materials, components, stores and spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.

(ii) Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and a portion of manufacturing overheads based on normal operating capacity.

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

1.3 Cash Flow Statement (AS-3)

Cash flows are reported using the indirect method as prescribed in Accounting Standard 3 ''Cash Flow Statement'', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.4 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Section 205(2) (b) of the Companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis.

Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.5 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realisation but exclusive of Value Added Tax charged. Export sale has been recognised at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

Duty Drawback Scheme are accounted for in the year of export at FOB value.

Import Licence under DEPB Scheme and Focus Product Scheme are accounted for at net realisable value on accrual basis.

1.6 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred upto the date of commencement of commercial use of the assets.

1.7 Foreign Currency Transaction (AS-11)

(i) Transactions denominated in foreign currency are normally recorded at the exchange rate prevalling at the time of transaction.

(ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recongnised over the life of the contract. Foreign exchange financial instruments in hand at the year end are valued mark to market.

Any income or expenses on account of exchange difference either on settlement or on translation is recongnised in the Statement of Profit & Loss.

1.8 Government Grants (AS-12)

In case of depreciable assets, the cost of asset is shown at gross value and grant thereon is treated as Capital Grants which are withdrew over the period and in the proportion in which depreciation is charged.

1.9 Employee retirement benefits (AS-15)

(i) Short - term Employee Benefits:-

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognised in the period in which the employee renders the related services

The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

(ii) Post-employment Benefits:-

(a) Defined Contribution Plan: Contribution to superannuation fund is recognised as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trusts.

(b) Defined Benefit Plan and Other Long Term Benefits: Retirement benefits in the form of gratuity, provident fund, post retirement medical benefit schemes and other long term benefits in the form of leave encashment, silver jubilee and long service award are determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Actuarial gains/losses are recognised immediately in the Statement of Profit & Loss.

1.10 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.11 Earning Per Share (AS-20)

Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

1.12 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year. Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit - Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.

1.13 Impairment of assets (AS-28)

If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of future cash flows.

1.14 Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but disclosed in the notes.

1.15 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.

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Mar 31, 2013

1.1 System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

(i) Raw materials, components, stores and spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, components, stores and spares is determined on FIFO basis.

(ii) Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and a portion of manufacturing overheads based on normal operating capacity. (iii) Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.3 Cash Flow Statement (AS-3)

Cash flows are reported using the indirect method as prescribed in Accounting Standard 3 ''Cash Flow Statement'', where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expense associated with investing or financial cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

1.4 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Section 205(2) (b) of the Companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis.

Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.5 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realisation but exclusive of Value Added Tax charged. Export sale has been recognised at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

"Duty Drawback Scheme are accounted for in the year of export at FOB value. Import Licence under DEPB Scheme and Focus Product Scheme are accounted for at net realisable value on accrual basis."

1.6 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred upto the date of commencement of commercial use of the assets.

1.7 Foreign Currency Transaction (AS-11)

"(I) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction, (ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recongnised over the life of the contract. Foreign exchange financial instruments in hand at the year end are valued mark to market. Any income or expenses on account of exchange difference either on settlement or on translation is recongnised in the Statement of Profits Loss."

1.8 Government Grants (AS-12)

In case of depreciable assets, the cost of asset is shown at gross value and grant thereon is treated as Capital Grants which are withdrew overthe period and in the proportion in which depreciation is charged.

1.9 Employee retirement benefits (AS-15)

(i) Short-term Employee Benefits:-

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognised in the period in which the employee renders the related services

The Company recognises the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability after deducting any amount already paid.

(ii) Post-employment Benefits:-

(a) Defined Contribution Plan: Contribution to superannuation fund is recognised as an expense in the Statement of Profit & Loss as it is incurred. There are no other obligations other than the contribution payable to the respective trusts.

(b) Defined Benefit Plan and Other Long Term Benefits: Retirement benefits in the form of gratuity, provident fund, post retirement medical benefit schemes and other long term benefits in the form of leave encashment, silver jubilee '' and long service award are determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Actuarial gains/losses are recognised immediately in the Statement of Profit & Loss.

1.10 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.11 Earning Per Share (AS-20)

Earnings per equity share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the year end.

1.12 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year.

Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit - Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India

1.13 Impairment of assets (AS-28)

If the carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value in use determined by the present value of future cash flows.

1.14 Provisions, Contingent Liabilities and Contingent Assets (AS-29)

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but disclosed in the notes.

1.15 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.

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Mar 31, 2012

1.1 System of Accountingand use of estimates.

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

1.2 Valuation of Inventories (AS-2)

Inventories are valued at lower of cost and net realizable value. Cost is measured on first in first out basis.

1.3 Depreciation (AS-6)

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of Section 205(2) (b) of the Companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis. Individual asset costing less than Rs 5000/- has been fully depreciated in the year of purchase.

1.4 Revenue Recognition (AS-9)

Turnover are inclusive of excise duty and other related realisation but exclusive of Value Added Tax charged. Export sale has been recognised at the time of removal of goods from factory at invoice value (whether FOB or CIF) on the basis of exchange rates declared by Custom Department for that particular month.

"Duty Drawback Scheme are accounted for in the year of export at FOB value. Import Licence under DEPB Scheme and Focus Product Scheme are accounted for at net realisable value on accrual basis."

1.5 Fixed Assets (AS-10)

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable borrowing cost and other identifiable direct expenses incurred upto the date of commencement of commercial use of the assets.

1.6 Foreign Currency Transaction (AS-11)

"(i) Transactions denominated in foreign currency are normally recorded at the exchange rate prevailing at the time of transaction.

(ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate diff erance between the forward rate and exchange rate on the date of transaction such difference having been recongnised over the life of the contract. Foreign exchange financial instruments in hand at the year end are valued mark to market. Any income or expenses on account of exchange difference either on settlement or on translation is recongnised in the Statement of Profit & Loss Account.

1.7 Employee retirement benefits (AS-15)

Company's contribution paid / payable during the year towards provident fund scheme and employee state insurance scheme are recognized in the profit & loss account. Leave encashment is accounted for on cash basis.

1.8 Borrowing Cost (AS-16)

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

1.9 Taxes on Income (AS-22)

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year. Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit - Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.

1.10 Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.

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Mar 31, 2010

1) System of Accounting and use of estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts. The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements ands the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are know/materialized.

2) Fixed Assets

Value of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure on installations, attributable pre-operative expenses including borrowing cost and other identifiable direct expenses incurred upto the date of commencement of commercial use of the assets.

3) Depreciation:

Depreciation on fixed assets is provided for on straight line method in accordance with the provisions of section 205(2) (b) of the companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis.

4) Valuation of Inventories :

Inventories are valued at lower of cost or net realizable value. Cost is measured on first in first out basis.

5) Turnover

Turnovers are inclusive of excise duty, refund and other related realization but exclusive of value added tax charged. Export sale has been recognized at the time of removal of goods from factory gate at invoice value (whether FOB or CIF) on the basis of exchange rates declared by the Customs department for that particular month.

During the year export sale of Rs.103.32 Lacs (Previous Year Rs.27.28 Lacs) booked on the basis of removal of goods at invoice value however let export order date of the same was after 31 st March 2010.

6) Benefits receivable against export and its obligation

Duty Drawback Scheme are accounted for in the year of export at FOB value

7) Deferred Revenue Expenses

Preliminary Expenses are amortized over a period of 5 years.

8) Foreign Currency Transaction:

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

(ii) Monetary items denominated in foreign currency at the year end and not covered by forward exchange contracts are translated at the year end rates and those covered by forward contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction such difference having been recognized over the life of the contract. Foreign exchange financial instruments in hand at the year end are valued mark to market.

Any income or expenses on account of exchange difference either on settlement or on translation is recognized in the profit & loss account.

9) Employee retirement benefits:

Companys contribution paid / payable during the year towards provident fund scheme and employee state insurance scheme are recognized in the profit & loss account. Leave encashment is accounted for on cash basis

10) Taxes on Income

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year.

Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differences being difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty that future taxable income will be available against which such deferred tax assets can be realized.

Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.

11) Borrowing Cost

Borrowing cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying assets is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowing cost are charged to revenue.

12) Except where stated, accounting policies are consistent with the generally accepted accounting principles and have been consistently applied.