Accounting Policies of Meyer Apparel Ltd. Company

Mar 31, 2025

3. Material accounting policies

3.1. Basis of preparation

3.1.1. Compliance with Ind AS

These Financial Statements (‘financial statements’) have been prepared in accordance with the Indian
Accounting Standards (referred to as “Ind AS”) as prescribed under Section 133 of the Companies
Act, 2013 read together with Companies (Indian Accounting Standards) Rules, 2016 and other relevant
provisions of the Act, to the extent applicable.

The accounting policies, as set out in the following paragraphs of this note, have been consistently
applied, by the Company, to all the periods presented in the said Financial Statements

The preparation of the said Financial Statements requires the use of certain critical accounting
estimates and judgements. It also requires the management to exercise judgement in the process of
applying the Company’s accounting policies. The areas where estimates are significant to the Financial
Statements, or areas involving a higher degree of judgement or complexity, are disclosed in Note no.
29.

The Financial Statements are based on the classification provisions contained in Ind AS 1,
‘Presentation of Financial Statements’ and division II of schedule III of the Companies Act 2013.

Further, for the purpose of clarity, various items are aggregated in the statement of profit and loss and
balance sheet. Nonetheless, these items are dis-aggregated separately in the notes to the Financial
Statements, where applicable or required. All the amounts included in the Financial Statements have
been rounded off to the nearest Lakhs upto two decimals, as required by General Instructions for

preparation of Financial Statements in Division II of Schedule III to the Companies Act, 2013, except
per share data and unless stated otherwise.

These Financial Statements are approved for issue by the Board of Directors on May 17, 2025. The
revision to these Financial Statements is permitted by the Board of Directors after obtaining necessary
approvals or at the instance of regulatory authorities as per provisions of the Act.

3.1.2 Historical Cost Convention

The financial statements have been prepared on the accrual and going concern basis, and the historical
cost convention except where the Ind AS requires a different accounting treatment. The principal
variations from the historical cost convention relate to financial instruments classified as fair value for
the followings:

• certain financial assets and liabilities and contingent consideration that is measured at
fair value;

• assets held for sale measured at fair value less cost to sell;

• defined benefit plans plan assets measured at fair value; and

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

The Financial Statements are presented in Indian Rupees in Lakhs except where otherwise stated.
3.1.3 Use of Estimates and Judgments

The preparation of these financial statements in conformity with the recognition and measurement
principles of Ind AS requires the management of the Company to make estimates and judgements that
affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at
the date of the financial statements and the reported amounts of income and expense for the periods
presented.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and future periods are affected

3.2. Current versus non-current classification

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

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

b) Held primarily for the purpose of trading, or

c) Expected to be realised within twelve months after the reporting period other than for (a )
above, 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 current when:

a) It is expected to be settled in normal operating cycle

b) It is held primarily for the purpose of trading

c) It is due to be settled within twelve months after the reporting period other than for (a )
above, 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.

3.3. Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance
sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date.

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.

The Company categorizes assets and liabilities measured at fair value into one of three levels as
follows:

• Level 1 — Quoted (unadjusted)

This hierarchy includes financial instruments measured using quoted prices.

• Level 2

Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.

Level 2 inputs include the following:

a) quoted prices for similar assets or liabilities in active markets.

b) quoted prices for identical or similar assets or liabilities in markets that are not active.

c) inputs other than quoted prices that are observable for the asset or liability.

d) Market - corroborated inputs.

• Level 3

They are unobservable inputs for the asset or liability reflecting significant modifications to
observable related market data or Company’s assumptions about pricing by market participants.

Fair values are determined in whole or in part using a valuation model based on assumptions that
are neither supported by prices from observable current market transactions in the same instrument
nor are they based on available market data.

3.4 Property Plant and Equipment

An item is recognised as an asset, if and only if, it is probable that the future economic benefits
associated with the item will flow to the Company and its cost can be measured reliably.

PPE are stated at actual cost less accumulated depreciation and impairment loss if any. Actual cost
is inclusive of freight, installation cost, duties, taxes and other incidental expenses for bringing the
asset to its working conditions for its intended use (net of CENVAT/GST) and any cost directly
attributable to bring the asset into the location and condition necessary for it to be capable of
operating in the manner intended by the Management. It include professional fees and borrowing
costs for qualifying assets.

Significant Parts of an item of PPE (including major inspections) having different useful lives &
material value or other factors are accounted for as separate components. All other repairs and
maintenance costs are recognized in the statement of profit and loss as incurred.

Property, Plant and Equipment and intangible assets are not depreciated or amortized once
classified as held for sale.

Depreciation of these PPE commences when the assets are ready for their intended use.

Depreciation is provided pro-rata to the period of use on the straight line method on the basis of
estimated useful life. On assets acquired on lease (including improvements to the leasehold
premises), amortization has been provided for on Straight Line Method over the primary period of
lease. The residual values are not more than 5% of the original cost of the assets

The estimated useful lives and residual values are reviewed on an annual basis and if necessary,
changes in estimates are accounted for prospectively.

Depreciation on subsequent expenditure on PPE arising on account of capital improvement or other
factors is provided for prospectively over the remaining useful life.

as owned assets or over the shorter of the assets useful life and the lease term if there is an
uncertainty that the company will obtain ownership at the end of the lease term.

An item of PPE is de-recognized upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement
of an item of PPE is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognized in the Statement of Profit and Loss.

3.5 Intangible Assets

Intangible assets are recognised when it is probable that the future economic benefits that are
attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.
Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated
amortization and cumulative impairment. Administrative and other general overhead expenses that are
specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the
cost of the intangible assets.

Amortization periods and methods: Intangible assets are amortized on straight line basis over a period
ranging between 3-5 years which equates its economic useful life.

3.6. 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. The financial instruments are recognised in the balance
sheet when the Company becomes a party to the contractual provisions of the financial instrument.
The Company determines the classification of its financial instruments at initial recognition.

3.7.1. Financial assets

Initial recognition and measurement

All financial assets are recognised 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 are recognized on the trade date, i.e., the date that the Company
commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in following categories
based on business model of the entity:

• Debt instruments at amortized cost

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

• Debt instruments, derivatives and equity instruments at fair value through profit or loss
(FVTPL)

• Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Cash and cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into
known amounts of cash that are subject to an insignificant risk of change in value and having original
maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash
equivalents consist of balances with banks which are unrestricted for withdrawal and usage.

De-recognition of financial assets
A financial asset is de-recognized only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• retains the contractual rights to receive the cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, it evaluates whether it has transferred substantially
all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de¬
recognized.

Where the Company has neither transferred a financial asset nor retains substantially all risks and
rewards of ownership of the financial asset, the financial asset is de-recognised if the company
has not retained control of the financial asset. Where the company retains control of the financial
asset, the asset is continued to be recognised to the extent of continuing involvement in the
financial asset.

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 amortized 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) Trade receivables or any contractual right to receive cash or another financial asset that
result from transactions that are within the scope of Ind AS 11 and Ind AS 18

e) Loan commitments which are not measured as at FVTPL

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

• Trade receivables or contract revenue receivables; and

• All lease receivables resulting from transactions within the scope of Ind AS 17

ECL impairment loss allowance (or reversal) recognized during the period is recognized as
income/ expense in the statement of profit and loss (P&L).

3.7.2 Financial liabilities

Financial liabilities and equity instruments issued by the company are classified according to the
substance of the contractual arrangements entered into and the definitions of a financial liability
and an equity instrument.

Initial recognition and measurement

Financial liabilities are recognised when the company becomes a party to the contractual
provisions of the instrument. Financial liabilities are initially measured at the fair value.
Transaction costs that are directly attributable to financial liabilities (other than financial liabilities
at fair value through profit or loss) are added to or deducted from the fair value measured on
initial recognition of financial liability.

Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using the effective interest rate
method. Financial liabilities carried at fair value through profit or loss are measured at fair value
with all changes in fair value recognised in the statement of profit and loss.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the
end of financial period 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 amortised cost using the
effective interest method.

Loans and borrowings

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

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires.

3.7. Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an 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

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.

Impairment losses of continuing operations, including impairment on inventories, are recognized
in the statement of profit and loss.

A previously recognized impairment loss (except for goodwill) 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 to the carrying amount of the asset.

3.8. Inventories

Basis of Valuation:-

Inventories are valued at the lower of cost and net realizable value.

Methods of Valuation:-

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

• Raw materials: Cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined on First-in First-out
Cost Method.

• Finished goods and work in progress: Cost includes cost of direct materials and labour and a
proportion of manufacturing overheads based on the normal operating capacity, but excluding
borrowing costs. Cost is determined on First-in First-out Cost Method.

• Traded goods: Cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined on First-in First-out
basis.

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

3.9. Revenue recognition
• Sale of Goods

The company recognizes revenue in accordance with Ind- AS 115. Revenue is recognized upon
transfer of control of promised products or services to customers in an amount that reflects the
consideration that the Company expects to receive in exchange for those products or services.

Revenues in excess of invoicing are classified as contract assets (which may also refer as unbilled
revenue) while invoicing in excess of revenues are classified as contract liabilities (which may
also refer to as unearned revenues).

The Company presents revenues net of indirect taxes in its Statement of Profit and loss.

• Interest income

Revenue is recognized on a time proportion basis taking into account the amount outstanding
and the interest rate applicable. Interest income is included under the head “other income” in
the statement of profit and loss.

For all debt instruments measured either at amortized cost or at fair value through other
comprehensive income, interest income is recorded using the effective interest rate (EIR).

• Duty Drawback

Duty drawback on exports has been accounted for on accrual basis on approval of the shipping
bill by the customs authorities.

• Insurance Claims

Insurance claims are accounted for as and when admitted by the concerned authority.

3.10. Employee Benefits

Short-Term employee benefits: -

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related
service are recognized in respect of employees’ services up to the end of the reporting period and
are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligations in the balance sheet.

Long-Term employee benefits

Compensated expenses which are not expected to occur within twelve months after the end of
period in which the employee renders the related services are recognized as a liability at the
present value of the defined benefit obligation at the balance sheet date.

Post-employment obligations

i. Defined contribution plans

Provident Fund and employees’ state insurance schemes

All employees of the Company are entitled to receive benefits under the Provident Fund,
which is a defined contribution plan. Both the employee and the employer make monthly
contributions to the plan at a predetermined rate (presently 12%) of the employees’ basic
salary. These contributions are made to the fund administered and managed by the
Government of India. In addition, some employees of the Company are covered under the
employees’ state insurance schemes, which are also defined contribution schemes
recognized and administered by the Government of India.

The Company’s contributions to both these schemes are expensed in the Statement of
Profit and Loss. The Company has no further obligations under these plans beyond its
monthly contributions.

ii. Defined benefit plan
Gratuity plan

The Company provides for gratuity obligations through a defined benefit retirement plan
(the ‘Gratuity Plan’) covering all employees. The Gratuity Plan provides a lump sum
payment to vested employees at retirement or termination of employment based on the
respective employee salary and years of employment with the Company. The Company
provides for the Gratuity Plan based on actuarial valuations in accordance with Indian
Accounting Standard 19 (revised), “Employee Benefits“. The present value of obligation
under gratuity is determined based on actuarial valuation using Project Unit Credit
Method, which recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build up the final
obligation.

Defined retirement benefit plans comprising of gratuity, un-availed leave, post-retirement
medical benefits and other terminal benefits, are recognized based on the present value of
defined benefit obligation which is computed using the projected unit credit method, with
actuarial valuations being carried out at the end of each annual reporting period. These are
accounted either as current employee cost or included in cost of assets as permitted.

iii Actuarial gains and losses are recognized in OCI as and when incurred.

The net interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligation and the fair value of plan assets. This cost is included in
employee benefit expense in the statement of profit and loss.

Remeasurement, comprising actuarial gains and losses, the effect of the changes to the
asset ceiling (if applicable) and the return on plan assets (excluding net interest as defined
above),are recognized in other comprehensive income except those included in cost of
assets as permitted in the period in which they occur and are not subsequently reclassified
to profit or loss.

The retirement benefit obligation recognized in the Financial Statements represents the
actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting
from this calculation is limited to the present value of any economic benefits available in
the form of reductions in future contributions to the plans.

Termination benefits

Termination benefits are recognized as an expense in the period in which they are
Incurred.

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Mar 31, 2024

3. Material accounting policies

3.1. Basis of preparation

3.1.1. Compliance with Ind AS

These financial statements have been prepared in accordance with the Indian Accounting Standards
(referred to as “Ind AS”) as prescribed under Section 133 of the Companies Act, 2013 read with
Companies (Indian Accounting Standards) Rules as amended from time to time

3.1.2 Historical Cost Convention

The financial statements have been prepared on the accrual and going concern basis, and the
historical cost convention except where the Ind AS requires a different accounting treatment. The
principal variations from the historical cost convention relate to financial instruments classified as
fair value for the followings:

? certain financial assets and liabilities and contingent consideration that is measured at fair
value;

? assets held for sale measured at fair value less cost to sell;

? defined benefit plans plan assets measured at fair value; and

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

The Financial Statements are presented in Indian Rupees in Lakhs except where otherwise stated.
3.1.3 Use of Estimates and Judgments

The preparation of these financial statements in conformity with the recognition and measurement
principles of Ind AS requires the management of the Company to make estimates and judgements
that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities
as at the date of the financial statements and the reported amounts of income and expense for the
periods presented.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimates are revised and future periods are
affected

3.2. Current versus non-current classification

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

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

b) Held primarily for the purpose of trading, or

c) Expected to be realised within twelve months after the reporting period other than for (a ) above,
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 current when:

a) It is expected to be settled in normal operating cycle

b) It is held primarily for the purpose of trading

c) It is due to be settled within twelve months after the reporting period other than for (a ) above,
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.

3.3. Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet
date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.

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.

The Company categorizes assets and liabilities measured at fair value into one of three levels as follows:

? Level 1 — Quoted (unadjusted)

This hierarchy includes financial instruments measured using quoted prices.

? Level 2

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly.

Level 2 inputs include the following:

a) quoted prices for similar assets or liabilities in active markets.

b) quoted prices for identical or similar assets or liabilities in markets that are not active.

c) inputs other than quoted prices that are observable for the asset or liability.

d) Market - corroborated inputs.

? Level 3

They are unobservable inputs for the asset or liability reflecting significant modifications to observable
related market data or Company’s assumptions about pricing by market participants. Fair values are
determined in whole or in part using a valuation model based on assumptions that are neither supported
by prices from observable current market transactions in the same instrument nor are they based on
available market data.

3.4 Property Plant and Equipment

Property, Plant and Equipment and intangible assets are not depreciated or amortized once classified as
held for sale.

PPE are stated at actual cost less accumulated depreciation and impairment loss. Actual cost is inclusive
of freight, installation cost, duties, taxes and other incidental expenses for bringing the asset to its
working conditions for its intended use (net of CENVAT/GST) and any cost directly attributable to bring
the asset into the location and condition necessary for it to be capable of operating in the manner intended
by the Management. It include professional fees and borrowing costs for qualifying assets.

Significant Parts of an item of PPE (including major inspections) having different useful lives & material
value or other factors are accounted for as separate components. All other repairs and maintenance costs
are recognized in the statement of profit and loss as incurred.

Depreciation of these PPE commences when the assets are ready for their intended use.

Depreciation is provided for on straight line method on the basis of useful life. On assets acquired on
lease (including improvements to the leasehold premises), amortization has been provided for on Straight
Line Method over the primary period of lease.

The estimated useful lives and residual values are reviewed on an annual basis and if necessary, changes
in estimates are accounted for prospectively.

Depreciation on subsequent expenditure on PPE arising on account of capital improvement or other
factors is provided for prospectively over the remaining useful life.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as
owned assets or over the shorter of the assets useful life and the lease term if there is an uncertainty that
the company will obtain ownership at the end of the lease term.

An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an
item of PPE is determined as the difference between the sales proceeds and the carrying amount of the
asset and is recognized in the Statement of Profit and Loss.

3.5 Intangible Assets

All expenditure on intangible items are expensed as incurred unless it qualifies as intangible assets. The
carrying value of intangible assets is assessed for recoverability by reference to the estimated future
discounted net cash flows that are expected to be generated by the asset. Where this assessment indicates
a deficit, the assets are written down to the market value or fair value as computed above.

(i) Intangible assets

? Recognition of intangible assets

Computer software

Purchase of computer software used for the purpose of operations is capitalized. However, any
expenses on software support, maintenance, upgrade etc. payable periodically is charged to the
Statement of Profit & Loss.

? De-recognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected
from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured
as the difference between the net disposal proceeds and the carrying amount of the asset, and are
recognized in the Statement of Profit and Loss when the asset is derecognized.

3.6. 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. The financial instruments are recognised in the balance
sheet when the Company becomes a party to the contractual provisions of the financial instrument.
The Company determines the classification of its financial instruments at initial recognition.

3.7. Financial assets

3.7.1. Initial recognition and measurement

All financial assets are recognised 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
are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in following categories based
on business model of the entity:

? Debt instruments at amortized cost

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

? Debt instruments, derivatives and equity instruments at fair value through profit or loss
(FVTPL)

? Equity instruments measured at fair value through other comprehensive income (FVTOCI)
De-recognition of financial assets

A financial asset is de-recognized only when

? The Company has transferred the rights to receive cash flows from the financial asset or

? retains the contractual rights to receive the cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, it evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognized.

Where the Company has neither transferred a financial asset nor retains substantially all risks and
rewards of ownership of the financial asset, the financial asset is de-recognised if the Group has not
retained control of the financial asset. Where the Group retains control of the financial asset, the asset
is continued to be recognised to the extent of continuing involvement in the financial asset.

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 amortized 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) Trade receivables or any contractual right to receive cash or another financial asset that result
from transactions that are within the scope of Ind AS 11 and Ind AS 18

d) Loan commitments which are not measured as at FVTPL

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

? Trade receivables or contract revenue receivables; and

? All lease receivables resulting from transactions within the scope of Ind AS 17

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/
expense in the statement of profit and loss (P&L).

3.7.2 Financial liabilities

Financial liabilities and equity instruments issued by the company are classified according to the
substance of the contractual arrangements entered into and the definitions of a financial liability and
an equity instrument.

Initial recognition and measurement

Financial liabilities are recognised when the company becomes a party to the contractual provisions of
the instrument. Financial liabilities are initially measured at the fair value. Transaction costs that are
directly attributable to financial liabilities (other than financial liabilities at fair value through profit or
loss) are added to or deducted from the fair value measured on initial recognition of financial liability.

Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using the effective interest rate
method. Financial liabilities carried at fair value through profit or loss are measured at fair value with
all changes in fair value recognised in the statement of profit and loss.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end
of financial period 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 amortised cost using the effective interest method.

Loans and borrowings

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

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires.

Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an 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 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.

Impairment losses of continuing operations, including impairment on inventories, are recognized in
the statement of profit and loss.

A previously recognized impairment loss (except for goodwill) 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 to the carrying amount of the asset.

3.8. Inventories

Inventories are valued at the lower of cost and net realizable value.

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

? Raw materials: Cost includes cost of purchase and other costs incurred in bringing the inventories to
their present location and condition. Cost is determined on First-in First-out Cost Method.

? Finished goods and work in progress: Cost includes cost of direct materials and labour and a
proportion of manufacturing overheads based on the normal operating capacity, but excluding
borrowing costs. Cost is determined on First-in First-out Cost Method.

? Traded goods: Cost includes cost of purchase and other costs incurred in bringing the inventories to
their present location and condition. Cost is determined on First-in First-out basis.

? Spare parts and consumables at lower of cost or net realisable value.

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

3.9. Revenue recognition

? Sale of Goods

The company recognizes revenue in accordance with Ind- AS 115. Revenue is recognized upon
transfer of control of promised products or services to customers in an amount that reflects the
consideration that the Company expects to receive in exchange for those products or services.

Revenues in excess of invoicing are classified as contract assets (which may also refer as unbilled
revenue) while invoicing in excess of revenues are classified as contract liabilities (which may also
refer to as unearned revenues).

The Company presents revenues net of indirect taxes in its Statement of Profit and loss.

? Interest income

Revenue is recognized on a time proportion basis taking into account the amount outstanding and
the interest rate applicable. Interest income is included under the head “other income” in the
statement of profit and loss.

For all debt instruments measured either at amortized cost or at fair value through other
comprehensive income, interest income is recorded using the effective interest rate (EIR).

? Duty Drawback

Duty drawback on exports has been accounted for on accrual basis on approval of the shipping bill
by the customs authorities.

? Insurance Claims

Insurance claims are accounted for as and when admitted by the concerned authority.

3.10. Employee Benefits

Short term employee benefits:-

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related service
are recognized in respect of employees’ services up to the end of the reporting period and are measured
at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.

Long-Term employee benefits

Compensated expenses which are not expected to occur within twelve months after the end of period
in which the employee renders the related services are recognized as a liability at the present value of
the defined benefit obligation at the balance sheet date.

Post-employment obligations

i. Defined contribution plans

Provident Fund and employees’ state insurance schemes

All employees of the Company are entitled to receive benefits under the Provident Fund, which is a
defined contribution plan. Both the employee and the employer make monthly contributions to the
plan at a predetermined rate (presently 12%) of the employees’ basic salary. These contributions are
made to the fund administered and managed by the Government of India. In addition, some employees
of the Company are covered under the employees’ state insurance schemes, which are also defined
contribution schemes recognized and administered by the Government of India.

The Company’s contributions to both these schemes are expensed in the Statement of Profit and Loss.
The Company has no further obligations under these plans beyond its monthly contributions.

ii.Defined benefit

Gratuity plan

The Company provides for gratuity obligations through a defined benefit retirement plan (the ‘Gratuity
Plan’) covering all employees. The Gratuity Plan provides a lump sum payment to vested employees

at retirement or termination of employment based on the respective employee salary and years of
employment with the Company. The Company provides for the Gratuity Plan based on actuarial
valuations in accordance with Indian Accounting Standard 19 (revised), “Employee Benefits“. The
present value of obligation under gratuity is determined based on actuarial valuation using Project
Unit Credit Method, which recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build up the final obligation.

Defined retirement benefit plans comprising of gratuity, un-availed leave, post-retirement medical
benefits and other terminal benefits, are recognized based on the present value of defined benefit
obligation which is computed using the projected unit credit method, with actuarial valuations being
carried out at the end of each annual reporting period. These are accounted either as current employee
cost or included in cost of assets as permitted.

iii Actuarial gains and losses are recognized in OCI as and when incurred.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the
statement of profit and loss.

Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling
(if applicable) and the return on plan assets (excluding net interest as defined above),are recognized
in other comprehensive income except those included in cost of assets as permitted in the period in
which they occur and are not subsequently reclassified to profit or loss.

The retirement benefit obligation recognized in the Financial Statements represents the actual deficit
or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is
limited to the present value of any economic benefits available in the form of reductions in future
contributions to the plans.

Termination benefits

Termination benefits are recognized as an expense in the period in which they are incurred.

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Mar 31, 2016

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial Statements have been prepared on accrual and going concern basis and in accordance with historial cost convention and generally accepted accounting principles including mandatory accounting standards and relevant presentational requirements of the Companies Act, 2013.

2. FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses reIated to acquisition . In respect of major projects invoIving construction , if any, reIated pre-operationaI expenses form part of the vaIue of assets capitaIised. However, with effect from 1st ApriI , 2014, the company has aIigned usefuI Iife of the tangibIe fixed assets in the manner specified in Sc heduIe- II to the Companies Act, 2013.

3. DEPRECIATION

Effective from ApriI 1,2014, the Company has revised depreciation rates on the tangibIe fixed assets as per the usefuI Iife specified in Part ''C'' of ScheduIe II of the Companies Act, 2013.

4. IMPAIRMENT OF ASSETS:

Impairment of an asset is worked out at the year end after depreciation and necessary revaIuations and is accounted for in accordance with the Accounting Standard-28 issued by the Institute of Chartered Accountants of India.

5. INVENTORI ES

Inventories have been vaIued on the foIIowing basis:

- Raw MateriaIs and Stock in Process at Iower of the direct cost incIuding over heads, if any, and net reaIisabIe vaIue.

- Spare parts and consumabIes at Iower of cost or net reaIisabIe vaIue.

- Finished goods at the lower of cost (inclusive of excise duty, if any) or net realisable value.

- Bought- out items at Iower of cost or net reaIisabIe vaIue.

- The Cost is calculated using FIFO method and the Net realisable value as certified by the Management.

6. EMPLOYEE BENEFITS

The Company has adopted AS-15 (Revised)-“ Employee Benefit” issued by the Institute of Chartered Accountants of India. Present value of Gratutiy and Leave Encashment is determined based on actuarial valuation and are provided for at the year-end only.

7. FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currency have been recorded at the exchange rates prevailing on the date of the transaction. LiabiIities/ReceivabIes in foreign currency on the BaIance Sheet date are converted at the exchange rate prevaiIing at the end of the year.

8. REVENUE RECOGNITION

- Export sales are accounted for when the items are shipped to the customers.

- Sales to others are accounted for on despatch and are stated inclusive of excise duty, if any, and net of sales tax/ VAT and trade discounts.

- Income from RentaIs, Interest, and Other Incomes are booked on AccruaI basis.

9. DUTY DRAWBACK

Duty drawback on exports has been accounted for on accruaI basis on approvaI of the shipping biII by the customs authorities.

10. BORROWING COSTS

Borrowing costs incurred in respect of working capital are expensed off. Borrowing cost that are directly attributable to the acquisition of the fixed assets are capitalised along with the cost of the asset.

11. PRIOR PERIOD, EXCEPTIONAL, AND EXTRAORDINARY ITEMS

Prior period items and extraordinary items having material impact on the financial affairs of the Company have been credited/charged to the Profit & Loss Account and discIosed separateIy.

12. DEFERRED TAX

Provision ha s been made during the year for deferred tax as sets required under the Accounting Standard -22, nameIy, “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India.

The deferred tax resuIting from ‘timing difference’ between book profits and taxabIe profit for the year under reporting has been accounted for using the tax rates and Iaws that have been enacted or subsequentIy enacted as on the BaIance Sheet date. The deferred tax asset is recognized and carried forward onIy to the extent that there is a reasonabIe certainty that the asset wiII be adjusted in the future.

13. MISCELLENEOUS EXPENDITURE

PreIiminary expenses and PubIic issue expenses, if any, are written off @ 10% per annum from the date of commencement of commercial production. .

14. ESOPS

The Company had so far issued 16.75 Lacs stock options out of the totaI 20 Lacs stock options to the empIoyees as weII as to certain directors of the Company and to those of the associated company (ies) under the ESOS, 2009 scheme of the Company, read with SEBI GuideIines. The finance cost in this regard is to recognize to the extent and in the year in which the vested options are actuaIIy exercised.

15. The Company has foIIowed aII the mandatory accounting standards as given in Section 133 of the Companies Act, 2013 as and where appIicabIe.

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Mar 31, 2014

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared on accrual and going concern basis and in accordance with historical cost convention and generally accepted accounting principles including mandatory accounting standards and relevant presentational requirements of the Companies Act, 1956.

2. FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, if any, related pre-operational expenses form part of the value of assets capitalised.

3. DEPRECIATION

Depreciation on the fixed assets has been provided for on the straight-line method at the rates and in the manner specified in the Schedule-XIV to the Companies Act, 1956.

4. IMPAIRMENT OF ASSETS:

Impairment of an asset is worked out at the year end after depreciation and necessary revaluations and is accounted for in accordance with the Accounting Standard-28 issued by the Institute of Chartered Accountants of India.

5. INVENTORIES

Inventories have been valued on the following basis:

Raw Materials and Stock in Process at lower of the direct cost including overheads, if any, and net realisable value.

Spare parts and consumables at lower of cost or net realisable value.

Finished goods at the lower of cost (inclusive of excise duty, if any) or net realisable value.

Bought-out items at lower of cost or net realisable value.

The Cost is calculated using FIFO method and the Net realisable value as certified by the Management.

6. EMPLOYEE BENEFITS

The Company has adopted AS-15(Revised)-"Employee Benefit" issued by the Institute of Chartered Accountants of India. Present value of Gratuity and Leave Encashment is determined based on actuarial valuation and are provided for at the year end.

7. FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currency have been recorded at the exchange rates prevailing on the date of the transaction. Liabilities/Receivables in foreign currency on the Balance Sheet date are converted at the exchange rate prevailing at the end of the year.

8. REVENUE RECOGNITION

Export sales are accounted for when the items are shipped to the customers.

Sales to others are accounted for on despatch and are stated inclusive of excise duty, if any, and net of sales tax/VAT and trade discounts.

Income from Rentals, Interest, and Other Incomes are booked on Accrual basis.

9. DUTY DRAWBACK

Duty drawback on exports has been accounted for on accrual basis on approval of the shipping bill by the customs authorities.

10. BORROWING COSTS

Borrowing costs incurred in respect of working capital are expensed off. Borrowing cost that are directly attributable to the acquisition of the fixed assets are capitalised along with the cost of the asset.

11. PRIOR PERIOD, EXCEPTIONAL, AND EXTRAORDINARY ITEMS

Prior period items and extraordinary items having material impact on the financial affairs of the Company have been credited/charged to the Profit & Loss Account and disclosed separately.

12. DEFERRED TAX

Provision has been made during the year for deferred tax assets required under the Accounting Standard - 22, namely, "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

13. MISCELLENEOUS EXPENDITURE

Preliminary expenses and Public issue expenses, if any, are written off @ 10% per annum from the date of commencement of commercial production.

14. ESOPS

The Company had so far issued 16.75 Lacs stock options out of the total 20 Lacs stock options to the employees as well as to certain directors of the Company and to those of the associated company (ies) under the ESOS, 2009 scheme of the Company, read with SEBI Guidelines. The finance cost in this regard is to recognize to the extent and in the year in which the vested options are actually exercised.

15. The Company has followed all the mandatory accounting standards as given in Section 211 (3C) of the Companies Act, 1956 as and where applicable.

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Mar 31, 2013

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared on accrual and going concern basis and in accordance with historical cost convention and generally accepted accounting principles including mandatory accounting standards and relevant presentational requirements of the Companies Act, 1956.

2. FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, if any, related pre-operational expenses form part of the value of assets capitalised.

3. DEPRECIATION

Depreciation on the fixed assets has been provided for on the straight-line method at the rates and in the manner specified in the Schedule-XIV to the Companies Act, 1956.

4. IMPAIRMENT OF ASSETS :

Impairment of an asset is worked out at the year end after depreciation and necessary revaluations and is accounted for in accordance with the Accounting Standard-28 issued by the Institute of Chartered Accountants of India.

5. INVENTORIES

Inventories have been valued on the following basis:

- Raw Materials and Stock in Process at lower of the direct cost including overheads, if any, and net realisable value.

- Spare parts and consumables at lower of cost or net realisable value.

- Finished goods at the lower of cost (inclusive of excise duty, if any) or net realisable value. ,- Bought-out items at lower of cost or net realisable value.

- The Cost is calculated using FIFO method and the Net realisable value is as certified by the Management.

6. EMPLOYEE BENEFITS

The Company has adopted AS-15(Revised)-"Employee Benefit" issued by the Institute of Chartered Accountants of India. Present value of Gratuity and Leave Encashment is determined based on actuarial valuation and are provided for at the year end.

7. FOREIGN EXCHANGE TRANSACTIONS

¦ Transactions in foreign currency have been recorded at the exchange rates prevailing on the date of the transaction. Liabilities/Receivables in foreign currency on the Balance Sheet date are converted at the exchange rate prevailing at the end of the year.

8. REVENUE RECOGNITION

- Export sales are accounted for when the items are shipped to the customers.

- Sales to others are accounted for on despatch and are stated inclusive of excise duty, if any, and net of sales tax/ VAT and trade discounts.

- Income from Rentals, Royalty, Interest, and Other Incomes are booked on Accrual basis.

9. DUTY DRAWBACK

Duty drawback on exports has been accounted for on Accrual basis on approval of the shipping bill by the customs authorities.

10. BORROWING COSTS

Borrowing costs incurred in respect of working capital are expensed off. Borrowing cost that are directly attributable to the acquisition of the fixed assets are capitalised along with the cost of the asset.

11. PRIOR PERIOD, EXCEPTIONAL, AND EXTRAORDINARY ITEMS

Prior period items and extraordinary items having material impact on the financial affairs of the Company have been credited/charged to the Profit & Loss Account and disclosed separately.

12. DEFERRED TAX

Provision has been made during the year for deferred tax assets required under the Accounting Standard - 22, namely, "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

13. MISCELLENEOUS EXPENDITURE

Preliminary expenses and Public issue expenses, if any, are written off @ 10% per annum from the date of commencement of commercial production.

14. ESOPS

The Company had so far issued 16.75 Lacs stock options out of the total 20 Lacs stock options to the employees as well as to certain directors of the Company and to those of the associated company (ies) under the ESOS, 2009 scheme of the Company, read with SEBI Guidelines. The finance cost in the regared is to recognize to the extent and in the year in which the vested options are actually exercised.

15. The Company has followed all the mandatory accounting standards as given in Section 211 (3C) of the Companies Act, 1956 as and where applicable.

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Mar 31, 2012

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared on accrual and going concern basis and in accordance with historical cost convention and generally accepted accounting principles including mandatory accounting standards and relevant presentational requirements of the Companies Act, 1956.

2. FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalised.

3. DEPRECIATION

Depreciation on the fixed assets has been provided for on the straight-line method at the rates and in the manner specified in the Schedule-XIV to the Companies Act, 1956.

4. IMPAIRMENT OF ASSETS :

Impairment of an asset is worked out at the year end after depreciation and necessary revaluations and is accounted for in accordance with the Accounting Standard-28 issued by the Institute of Chartered Accountants of India.

5. INVENTORIES

Inventories have been valued on the following basis:

- Raw Materials and Stock in Process at lower of the direct cost including overheads, if any, and net realisable value.

- Spare parts and consumables at lower of cost or net realisable value.

- Finished goods at the lower of cost (inclusive of excise duty, if any) or net realisable value.

- Bought-out items at lower of cost or net realisable value.

- The Cost is calculated using FIFO method and the Net realisable value is as certified by the Management.

6. EMPLOYEE BENEFITS

The Company has adopted AS-15(Revised)-"Employee Benefit" issued by the Institute of Chartered Accountants of India. Present value of Gratuity and Leave Encashment is determined based on actuarial valuation and are provided for at the year end.

7. FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currency have been recorded at the exchange rates prevailing on the date of the transaction. Liabilities/Receivables in foreign currency on the Balance Sheet date are converted at the exchange rate prevailing at the end of the year.

8. REVENUE RECOGNITION

- Export sales are accounted for when the items are shipped to the customers.

- Sales to others are accounted for on despatch and are stated inclusive of excise duty, if any, and net of sales tax/ VAT and trade discounts.

- Income from Rentals, Royalty, Interest, and Other Incomes are booked on Accrual basis.

9. DUTY DRAWBACK

Duty drawback on exports has been accounted for on Accrual basis on approval of the shipping bill by the customs authorities.

10. BORROWING COSTS

Borrowing costs incurred in respect of working capital are expensed off. Borrowing cost that are directly attributable to the acquisition of the fixed assets are capitalised along with the cost of the asset.

11. PRIOR PERIOD, EXCEPTIONAL, AND EXTRAORDINARY ITEMS

Prior period items and extraordinary items having material impact on the financial affairs of the Company have been credited/charged to the Profit & Loss Account and disclosed separately.

12. DEFERRED TAX

Provision has been made during the year for deferred tax assets required under the Accounting Standard - 22, namely, "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

13. MISCELLENEOUS EXPENDITURE

Preliminary expenses and Public issue expenses, if any, are written off @ 10% per annum from the date of commencement of commercial production.

14. ESOPS

Out of the total 20 Lacs stock options, 13.25 Lacs stock options were issued on 11th January, 2010 to the employees of the Company as well as to certain directors of the Company and those of the associated company (ies) under the ESOS, 2009 scheme of the Company, read with SEBI Guidelines. The finance cost in this regard will be recognized to the extent and in the year in which the vested options are actually exercised.

15. The Company has followed all the mandatory accounting standards as given in Section 211 (3C) of the Companies Act, 1956 as and where applicable.

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Mar 31, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared on accrual and going concern basis and in accordance with historical cost convention and generally accepted accounting principles including mandatory accounting st andards and relevant present ational requirements of the Companies Act, 1956.

2. FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major project s involving construction, related pre-operational expenses form p art of the value of assets capitalised. During the year under reference, the value of fixed asset s have been taken on the basis of valuation report of TR Chadha & Company, Chartered Accountants and the differential amount has been adjusted against the capital Reduction account in pursuance to the Reduction of Capital Scheme of the Company u/s 100 of the Companies Act, 1956.

3. DEPRECIATION

Depreciation on the fixed assets has been provided for on the straight-line method at the rates and in the manner specified in the Schedule-XIV to the Companies Act, 1956.

4. INVENTORIES

Inventories have been valued on the following basis:

- Raw Materials and Stock in Process at lower of the direct cost including overheads, if any , and net realisable value.

- Spare parts and consumables at lower of cost or net realisable value.

- Finished goods at the lower of cost (inclusive of excise duty, if any) or net realisable value.

- Bought-out items at lower of cost or net realisable value.

- The Cost is calculated using FIFO method and the Net realisable value is as certified by the Management.

5. EMPLOYEE BENEFITS

The Company has adopted AS-15(Revised)-“Employee Benefit” issued by the Institute of Chartered Accountants of India. Present value of Gratuity and Leave Encashment is determined based on actuarial valuation and are provided for at the year end.

6. FOREIGN EXCHANGE TRANSACTIONS

Transactions in foreign currency have been recorded at the exchange rates prevailing on the date of the transaction. Liabilities/ Receivables in foreign currency on the Balance Sheet date are converted at the exchange rate prevailing at the end of the year.

7. REVENUE RECOGNITION

- Export sales are accounted for when the items are shipped to the customers.

- Sales to others are accounted for on despatch and are stated inclusive of excise duty, if any, and net of sales tax / VAT and trade discounts.

- Income from Rentals, Royalty, Interest, and Other Incomes are booked on Accrual basis.

8. DUTY DRAWBACK

Customs Duty/ Excise Duty etc. drawback on exports has been accounted for on Accrual basis.

9. BORROWING COSTS

Borrowing costs incurred in respect of working capit al are expensed off. Borrowing cost that are directly attribut able to the acquisition of the fixed assets are capitalised along with the cost of the asset.

10. PRIOR PERIOD, EXCEPTIONALAND EXTRAORDINARY ITEMS

Prior period items and extraordinary items having material impact on the financial afairs of the Company have been credited/ charged to the Profit & Loss Account and disclosed separately.

11. DEFERRED TAX

Provision has been made during the year for deferred t ax assets required under the Accounting Standard – 22, namely , “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India.

12. The Company has followed all the mandatory accounting standards as given in Section 211(3C) of the Companies Act, 1956 as and where applicable.

13. MISCELLENEOUS EXPENDITURE

Preliminary expenses and Public issue expenses, if any, are written off @ 10% per annum from the date of commencement of commercial production.