Accounting Policies of Madhur Industries Ltd. Company

Mar 31, 2024

NOTE 3 SIGNIFICANT ACCOUNTING POLICIES AND KEY ACCOUNTING ESTIMATES

(A) Significant Accounting Policies:

1. Current / Non-Current Classification:

The Company presents assets and liabilities in the balance sheet based on current and non-current
classification. An asset is treated 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 treated 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.

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

The operating cycle is the time between the acquisition of assets/materials for processing and their
realisation in cash and cash equivalents. As the Company''s normal operating cycle is not clearly
identifiable, it is assumed to be twelve months.

2. Foreign Currencies:

The Company''s standalone financial statements are prepared in Indian Rupee ("Rupee") which is
the also the Company''s functional currency.

Transactions and balances:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the
time of the transaction, i.e. spot rate.

Monetary assets and liabilities denominated in foreign currencies are translated using the
exchange rate at the reporting date.

Exchange differences arising on settlement or translation of monetary items are recognised in the
statement of profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions.

3. Fair Value Measurements:

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

a) In the principal market for the asset or liability, or

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

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

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

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

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

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

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

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

c) Level 3 — Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable.

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

External valuers are involved, wherever required, for valuation of significant assets, such as
properties, unquoted financial assets and significant liabilities. Involvement of external valuers is
decided upon by the Company after discussion with and approval by the Company''s management.
Selection criteria include market knowledge, reputation, independence and whether professional
standards are maintained. The Company, after discussions with its external valuers, determines
which valuation techniques and inputs to use for each case.

At each reporting date, the Company analyses the movements in the values of assets and
liabilities which are required to be premeasured or re-assessed as per the Company''s accounting
policies.

For this analysis, the Company verifies the major inputs applied in the latest valuation by agreeing
the information in the valuation computation to contracts and other relevant documents. The
Company also compares the change in the fair value of each asset and liability with relevant
external sources to determine whether the change is reasonable.

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

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

4. Property, Plant And Equipment:

All the items of property, plant and equipment are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any.

Fixed Assets are stated at their Original Cost of acquisition less accumulated depreciation The Cost
of fixed assets include freight, taxes, duties and other incidental expenses related to acquisition
and any other attributable cost of bringing the asset to its working condition for its intended use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it
increases the future benefits from the existing asset beyond its previously assessed standard of
performance. All other expenses on existing fixed assets, including day-to-day repair and
maintenance expenditure and cost of replacing parts, are charged to the statement of profit and
loss for the period during which such expenses are incurred.

The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.

Depreciation on Fixed Assets has been provided on Straight Line Method over the useful lives of
assets estimated by Management. Depreciation for assets purchased/sold during a period is
proportionately charged. The Management estimates the useful lives for other fixed assets as
follows:

5. Leases: |

The determination of whether an arrangement is (or contains) a lease or not is based on the |

substance of the arrangement at the inception of the lease. The arrangement is, or contains, a |

lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the |

arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified |

in an arrangement. |

As a lessee: |

A lease is classified at the inception date as a finance lease or an operating lease. A lease that |

transfers substantially all the risks and rewards incidental to ownership to the Company is |

classified as a finance lease. The Company does not have any arrangement during or at the »

reporting period that can be classified as finance lease. |

Operating lease payments are recognized as an expense in the statement of profit and loss on a
straight-line basis over the lease term except in the case where incremental lease reflects
inflationary effect in which case, lease expense is accounted by actual rent for the period.

As a lessor:

Leases in which the Company does not transfer substantially all the risks and rewards of ownership
of an asset are classified as operating leases. Rental income from operating lease is recognized on
a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating
and arranging an operating lease are added to the carrying amount of the leased asset and
recognized over the lease term on the same basis as rental income. Contingent rents are
recognized as revenue in the period in which they are earned.

6. Borrowing Costs:

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

7. Investment Properties:

Investment properties are measured initially at cost, including transaction costs. Subsequent to
initial recognition, investment properties are stated at cost less accumulated depreciation and
accumulated impairment loss, if any.

Investment properties are derecognized either when they have been disposed of or when they are
permanently withdrawn from use and no future economic benefit is expected from their disposal.
The difference between the net disposal proceeds and the carrying amount of the asset is
recognized in profit or loss in the period of derecognition.

8. Intangible Assets:

Intangible assets acquired separately are measured, on initial recognition, at cost. Following the
initial recognition, intangible assets are carried at cost less any accumulated amortization and
accumulated impairment losses. The amortization expense on intangible assets is recognized in the
statement of profit and loss.

Intangible assets are derecognised either when they have been disposed of or when they are
permanently withdrawn from use and no future economic benefit is expected from their disposal.
The difference between the net disposal proceeds and the carrying amount of the asset is
recognized in profit or loss in the period of derecognition.

9. Impairment of Non-Financial Assets: |

The Company assesses, at each reporting date, whether there is any indication that an asset may >;¦

be impaired. If any indication exists, or when annual impairment testing for an asset is required, |

the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the |

higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value |

in use. |

Recoverable amount is determined for an individual asset, unless the asset does not generate cash |

inflows that are largely independent of those from other assets or groups of assets. When the |

carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered >;¦

impaired and is written down to its recoverable amount. |

In assessing value in use, the estimated future cash flows are discounted to their present value |

using a pre-tax discount rate that reflects current market assessments of the time value of money S

and the risks specific to the asset. In determining fair value less costs of disposal, recent market |

transactions are taken into account. If no such transactions can be identified, an appropriate |

valuation model is used. These calculations are corroborated by valuation multiples, quoted share |

prices for publicly traded companies or other available fair value indicators. The Company bases its %

impairment calculation on detailed budgets and forecast calculations. |

Impairment losses are recognized in the statement of profit or loss. |

An assessment is made at each reporting date to determine whether there is an indication that »

previously recognized impairment losses on assets no longer exist or have decreased. If such |

indication exists, the Company estimates the asset''s or CGU''s recoverable amount. 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 or loss. |

10. Revenue Recognition: |

Revenue is recognised to the extent it is probable that the economic benefits will flow to the |

Company and the revenue can be reliably measured, regardless of when the payment is being |

made. Revenue is measured at the fair value of the consideration received or receivable, taking |

into account contractually defined terms of payment and excluding taxes or duties collected on I

behalf of the government. The Company has concluded that it is the principal in all of its revenue |

arrangements since it is the primary obligor in all the revenue arrangements as it has pricing |

latitude and is also exposed to inventory and credit risks. |

Based on Ind AS 18 issued by the ICAI, the Company has assumed that recovery of excise duty <

flows to the Company on its own account. This is for the reason that it is a liability of the <

manufacturer which forms part of the cost of production, irrespective of whether the goods are ;

sold or not. Since the recovery of excise duty flows to the Company on its own account, revenue ;

includes excise duty. i

However, sales tax/ value added tax (VAT) is not received by the Company on its own account. ;

Rather, it is tax collected on value added to the commodity by the seller on behalf of the ;

government. Accordingly, it is excluded from revenue. The specific recognition criteria described i

below must also be met before revenue is recognised. <

Sale of products: ;

Sale of goods is recognized when significant risk and rewards is transferred, amount can be <

reliably measured and it is reasonable to expect ultimate collection. Turnover includes sale of ;

goods, sales tax, and adjusted for value added tax. ;

Rendering of services: <

The Company is providing management consulting towards various operational and strategic ;

activities and certain other shared services to some of its subsidiaries. Income from such ;

management consultancy and shared services are recognised in the statement of profit and loss in ;

which such services are rendered. \

Interest income: <

For all financial assets measured either at amortised cost or at fair value through other (

comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is <

the rate that exactly discounts the estimated future cash payments or receipts over the expected <

life of the financial instrument or a shorter period, where appropriate, to the gross carrying <

amount of the financial asset or to the amortised cost of a financial liability. When calculating the (

effective interest rate, the Company estimates the expected cash flows by considering all the (

contractual terms of the financial instrument but does not consider the expected credit losses. <

Interest income is included in ''Other Income'' in the statement of profit and loss. <

Dividends: <

Revenue is recognised when the Company''s right to receive the payment is established, which is <

generally when shareholders approve the dividend. <

11. Financial instruments: <

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. <

Financial assets:

Initial recognition and measurement:

All financial assets, except investment in subsidiaries and associate, are recognized initially at fair
value plus, in the case of financial assets not recorded at fair value through profit or loss,
transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales
of financial assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognized on the trade date, i.e., the
date that the Company commits to purchase or sell the asset.

Investments in subsidiaries and associate are carried at cost as per Ind AS 27 ''Separate Financial
Statements''. In case, the investments are classified as held for sale, such investments are
accounted for in accordance with Ind AS 105 ''Non-current Assets Held for Sale and Discontinued
Operations''.

Subsequent measurement:

For purposes of subsequent measurement, financial assets are primarily classified in three
categories:

a) Debt instruments at amortised cost;

b) Debt instruments at fair value through other comprehensive income (FVTOCI); and

c) Other financial instruments measured at fair value through profit or loss (FVTPL).

a) Debt instruments at amortised cost

A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:

i) The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and

ii) Contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost
using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The
EIR amortisation is included in finance income in the statement of profit or loss. The losses arising
from impairment are recognized in the statement of profit or loss. This category generally applies
to trade and other receivables.

b) Debt instruments at fair value through other comprehensive income (FVTOCI)

A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

i) The objective of the business model is achieved both by collecting contractual cash flows and
selling the financial assets; and

ii) The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each
reporting date at fair value. Fair value movements are recognized in the other comprehensive
income (OCI). However, the Company recognises interest income, impairment losses & reversals
and foreign exchange gain or loss in the statement of Profit and Loss. On derecognition of the
asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to
statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as
interest income using the EIR method.

c) Other financial instruments measured at fair value through profit and loss (FVTPL)

Any financial asset that does not qualify for amortised cost measurement or measurement at
FVTOCI must be measured subsequent to initial recognition at FVTPL.

Derecognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised when the rights to receive cash flows from the asset
have expired.

Impairment of financial assets:

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:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans,
debt securities, deposits, trade receivables and bank balance;

b) Financial assets that are debt instruments and are measured as at FVTOCI;

c) Lease receivables under Ind AS 17; and

d) Financial guarantee contracts which are not measured as at FVTPL.

The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade
receivables. The application of simplified approach does not require the Company to track changes
in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a
subsequent period, credit quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the entity reverts to recognizing
impairment loss allowance based on 12-month ECL.

Financial liabilities:

Initial recognition and measurement:

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss or as those measured at amortised cost.

The Company''s financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts and financial guarantee contracts.

Subsequent measurement:

The measurement of financial liabilities depends on their classification, as described below:

a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are
satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own
credit risks are recognized in OCI. These gains/ loss are not subsequently transferred to the
statement of profit & loss. However, the Company may transfer the cumulative gain or loss within
equity. All other changes in fair value of such liability are recognised in the statement of profit or
loss. The Company has not designated any financial liability as at fair value through profit and
loss.

b) Financial liabilities at amortised cost

Financial liabilities at amortised cost include loans and borrowings and payables.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs
in the statement of profit and loss.

Derecognition:

A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as the derecognition of the original liability and the
recognition of a new liability.

The difference in the respective carrying amounts is recognised in the statement of profit or loss.

12. Cash And Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and term
deposits with an original maturity of three months or less, which are subject to an insignificant risk
of changes in value.

13. Taxes:

Current Taxes:

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

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

Deferred Taxes:

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

Deferred tax asset is recognized and carried forward only to the extent that there is virtual
certainty that sufficient future taxable income will be available against which such deferred tax
assets can be realized. The carrying amount of deferred tax assets is reviewed at each reporting
date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax
assets are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.

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

14. Employee Benefits:

Provision for employees benefit (Gratuity) is made on rationale basis for gratuity while provision
for other benefits such as leave encashment has not been made. This accounting policy of
company is not in compliance with Ind AS - 19 "Employee Benefits" issued by The Institute of
Chartered Accountants of India which prescribes Actuarial Valuation.

15. Earnings Per Share:

The basic earnings per share is computed by dividing the net profit attributable to equity
shareholders for the period by the weighted average number of equity shares outstanding during
the period. The number of shares used in computing diluted earnings per share comprises the
weighted average shares considered for deriving basic earnings per share, and also the weighted
average number of equity shares which could be issued on the conversion of all dilutive potential
equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the
period, unless they have been issued at a later date. In computing dilutive earnings per share,
only potential equity shares that are dilutive and that would, if issued, either reduce future
earnings per share or increase loss per share, are included.

16. Dividend Distributions:

The Company recognises a liability to make cash distributions to equity holders of the parent when
the distribution is authorised and the distribution is no longer at the discretion of the Company. As
per the corporate laws in India, a distribution is authorised when it is approved by the
shareholders. A corresponding amount is recognised directly in equity.

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Mar 31, 2013

(a) Basis of Accounting:

The financial statements are prepared under historical cost convention and to comply in all material respect with the notified accounting standards by the Companies Accounting standard Rules - 2006 and the relevant provision of Companies Act, 1956.

(b)Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principle require estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liability on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from this estimate and differences between actual results and estimates are recognized in the period in which the results are known / materialize.

(c) Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. The cost of fixed asset comprise of its purchase price and any directly attributable cost of bringing the assets in an operational condition for its intended use.

(d)Depreciation:

Depreciation has been provided at the rates and in the manner prescribed in Schedule XIV of the Companies act, 1956 on SLM Method. Depreciation on addition or on sale/ disposal of assets is calculated pro-rata from the date of such addition or sale/ disposal as the case may be. Expenses for Advertisement film are amortized from and over the maximum period of 5 years,

(e) Valuation of Inventories:

Inventory of goods are valued at Cost.

(f) Investment:

Long term investments are stated at cost. Provision of diminution in the value of Long term investments is made only if such decline is other than temporary in nature in the opinion of the Management.

(g) Revenue Recognition:

All the items of Income and expenses are recognized on accrual basis, except dividend and interest on overdue installments/defaults and Municipal Tax is accounted on cash basis.

(h)Retiremeni/ Post retirement Benefits:

No Provision for has been made for liabilities for retirement benefits including gratuity and leave encashment in respect of employees as required by the Accounting Standards -15 on Retirement Benefits.

(i) Borrowing Costs

Borrowing costs attributable to the acquisition or construction of qualification assets, as defined in Accounting Standard 16 on "Borrowing Costs" are capitalized as part of the cost of such assets up to the date when the asset is ready for its intended use. Other borrowing costs are expensed as incurred.

(J) Taxation:

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

Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized

(k)Provisions, Contingent Assets and Contingent Liabilities:

Contingent Liabilities as defined in Accounting Standard 29 on "Provisions, Contingent Liabilities and Contingent Assets" are disclosed by way of notes to the account. Provision is made if it is probable that an outflow of future economic benefits will be required for an item previously dealt with as a contingent liability.

(J) Miscellaneous Expenditure:

Miscellaneous Expenditure is written off to the Profit and Loss Account over a period of up to ten years depending upon the nature and expected future benefit of such expenditure. The management reviews the amortization period on a regular basis and if expected future benefits from such expenditure are significantly lower from previous estimates, the amortization period is accordingly changed.

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Mar 31, 2010

(a) Basis of Accounting:

The financial statements are prepared under historical cost convention and to comply in all material respect with the notified accounting standards by the Companies Accounting standard Rules - 2006 and the relevant provision of Companies Act, 1956.

(b) Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. The cost of fixed asset comprise of its purchase price and any directly attributable cost of bringing the assets in an operational condition for its intended use.

(c) Depreciation:

Depreciation has been provided at the rates and in the manner prescribed in Schedule XIV of the Companies act, 1956 on SLM Method. Depreciation on addition or on sale/ disposal of assets is calculated pro-rata from the date of such addition or sale/ disposal as the case may be. Expenses for Advertisement film are amortized from and over the maximum period of 5 years,

(d) Valuation of Inventories:

Inventory of goods are valued at Cost.

(e) Investment:

Long term investments are stated at cost. Provision of diminution in the value of Long term investments is made only if such decline is other than temporary in nature in the opinion of the Management.

(f) Revenue Recognition:

All the items of Income and expenses are recognized on accrual basis, except dividend and interest on overdue installments/defaults and Municipal Tax is accounted on cash basis.

(g) Retirement/ Post retirement Benefits:

No Provision for has been made for liabilities for retirement benefits including gratuity and leave encashment in respect of employees as required by the Accounting Standards -15 on Retirement Benefits.

(h) Taxation:

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

Deferred tax assets are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

(i) Provisions, Contingent Assets and Contingent Liabilities:

A provision involving substantial degree of estimation are recognized when there is a present obligation as a result of recognized when there is a present obligation as a result of past event and it is probable that there will be on outflow or resources.

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Mar 31, 2009

1. Accounting Methodology:

The accounts are prepared on historical cost basis and as a going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles.

2. Fixed Assets & Depreciation:

Fixed Asset are value at cost less depreciation. The depreciation has been calculated at the rates provided. No depreciation has been taken on the value of land.

3. Income:

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

4. Amortization:

Expenses for Advertisement Film are amortized from and over the maximum period of 5 years.

5. Stock:

As regards to Valuation of Closing stock, it is explained by the Managing Director that it is valued at the Market Price and the market value is approx. same as cost (Average Cost Method).

6. Investments:

The Investments are stated at cost and no provision has been made for diminution in the value of investment.

7. Expenses:

Expenses are accounted for on Mercantile Basis but some expenses due to their peculiar nature are accounted for on cash basis.

8. Sales-

Sales turnover for the year is recorded at the actual amount realized in case of export of goods.

9. Bonus:

No provision is made accounts for bonus payable to employees of export division. The payment is recorded when actual disbursement is made.

10. Retirement Benefit:

The liability for retirement benefit in respect of employees is accounted on cash basis. The company does not have the policy of encashment of leave due to the employees during tenure of their service & as such has not been provided in books of account as per the Accounting Standard - 157 issued by the Institute of Chartered Accountants of India. The same will be accounted on cash basis and liabilities on this account is not ascertained.

11. Prior Period:

Material Items if any, relating to the prior period , non-recurring and extraordinary items etc. are disclosed separately.

12. Sundry Debtors, Creditors & Advances:

Balances of Debtors, Creditors and Unsecured Loans are subject to confirmation, whenever management finds any debts and advances as doubtful or bad and hence irrecoverable, necessary adjustments are being made in the profit & Loss A/c for the year in which such question arises.

13. Sales Tax Assessment:

The sales tax assessments are pending and therefore liabilities in this regards remains unascertained.