Accounting Policies of Pact Industries Ltd. Company

Mar 31, 2024

2.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Current versus Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/non-current
classification.

An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle;

• Held primarily for the purpose of trading;

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

• Cash or Cash Equivalent unless restricted from being exchanged or used to settle 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 expected to be settled in normal operating cycle;

• It is held primarily for the purpose of trading;

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

• There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period.

• 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 for processing and their realisation in
cash and cash equivalents. The Company has identified twelve months as its operating cycle.

B. Fair Value Measurement

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

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

• In the absence of a principal market, in the most advantageous market for the asset or
liability

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

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

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

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

Fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices in active markets for identical assets or liabilities that entity

can access at measurement date;

• Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable

for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

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

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

C. Foreign Currency

(i) Functional and Presentation Currency

The financial statements of the Company are presented using Indian Rupee (Rs.) in Lac, which is also
our functional currency i.e. currency of the primary economic environment in which the company
operates.

(ii) Transactions and Balances

Foreign currency transactions are translated into the respective functional currency using the
exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates are recognized in profit or loss.

D. Property, Plant and Equipment

PPE is recognised when it is probable that future economic benefits associated with the item will
flow to the company and the cost of the item can be measured reliably. PPE is stated at original cost
net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if
any. Property, Plant and Equipment acquired on hire purchase basis are recognised at their cash
values. Cost includes professional fees related to the acquisition of PPE and for qualifying assets,
borrowing costs capitalised in accordance with the company''s accounting policy.

PPE not ready for the intended use as on the date of the Balance Sheet are disclosed as "Capital
Work In Progress". (Also refer to policies on leases, borrowing costs, impairment of assets and
foreign currency transactions).

Depreciation is recognised using Straight Line Method so as to write off the cost of the assets (other
than freehold land & immovable properties) less their residual values over their useful lives
specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was
determined by technical evaluation, over the useful life so determined. Depreciation method is
reviewed at each financial year end to reflect the expected pattern of consumption of the future
economic-benefits embodied in the asset. The estimated useful life and residual values are also
reviewed at each financial year end and the effect of any change in the estimates of useful
life/residual value is accounted on prospective basis.

Where cost of a part of the asset ("asset component") is significant to total cost of the asset and
useful life of that part is different from the useful life of the remaining asset, useful life of that
significant part is determined separately and such asset component is depreciated over its separate
useful life.

Depreciation on additions to / deductions from, owned assets is calculated pro rata to the period of
use.

Depreciation charge for impaired assets is adjusted in future periods in such a manner that the
revised carrying amount of the asset is allocated over its remaining useful life.

Assets acquired under finance leases are depreciated on a straight line basis over the lease term.
Where there is reasonable certainty that the company shall obtain ownership of the assets at the
end of the lease term, such assets are depreciated based on the useful life prescribed under
Schedule II to the Companies Act, 2013 or based on the useful life adopted by the company for
similar assets.

Freehold land is not depreciated.

E. Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less accumulated amortization. Internally generated
intangible assets, excluding capitalized development costs, are not capitalized and expenditure is
reflected in the statement of profit and loss in the year in which the expenditure is incurred.

Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as
"Intangible Assets Under Development".

Intangible assets are amortised on Straight-Line Basis over the estimated useful life. The method of
amortisation and useful life is reviewed at the end of each accounting year with the effect of any
changes in the estimate being accounted for on a prospective basis.

Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining
periods so as to allocate the asset''s revised carrying amount over its remaining useful life.

F. 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 units'' (CGU) net selling price and its value in use. The 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. Where 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 net selling
price, recent market transactions are taken into account, if available. 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.
Impairment losses on non-financial asset, including impairment on inventories, are recognized in the
statement of profit and loss, except for properties previously revalued with the revaluation surplus
taken to OCI. For such properties, the impairment is recognised in OCI upto the amount of any
previous revaluation surplus.

After impairment, depreciation is provided on the revised carrying amount of the asset over its
remaining useful life.

An assessment is made at each reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or have decreased. If such indication exists,
the Group estimates the asset''s or CGU''s recoverable amount. A previously recognised 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 recognised. 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
recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss
unless the asset is carried at a revalued amount, in which case, the reversal is treated as a
revaluation increase.

Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level, as
appropriate; and when circumstances indicate that the carrying value may be impaired.

G. Non-Current Assets Held For Sale

The Company classifies non-current assets and disposal groups as ''Held for Sale'' if their carrying
amounts will be recovered principally through a sale rather than through continuing use and sale is
highly probable i.e. actions required to complete the sale indicate that it is unlikely that significant
changes to the sale will be made or that the decision to sell will be withdrawn.

Non-current assets held for sale and disposal groups are measured at the lower of their carrying
amount and the fair value less costs to sell. Assets and liabilities classified as held for sale are
presented separately in the balance sheet.

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

H. Earnings per Share

Basic EPS amounts are calculated by dividing the profit for the year attributable to the shareholders
of the Company by the weighted average number of equity shares outstanding as at the end of
reporting period.

Diluted EPS amounts are calculated by dividing the profit attributable to the shareholders of the
Company by the weighted average number of equity shares outstanding during the year plus the
weighted average number of Equity shares that would be issued on conversion of all the dilutive
potential equity shares into equity shares.

I. Cash and Cash Equivalents

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

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short¬
term deposits, as defined above, net of outstanding bank overdrafts as they are considered an
integral part of the Company''s cash management.

J. Contingent Liabilities and Contingent Assets

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

Contingent assets are only disclosed when it is probable that the economic benefits will flow to the
entity.

K. Investment Property

Properties, including those under construction, held to earn rentals and/or capital appreciation are
classified as investment property and measured and reported at cost, including transaction costs.

Depreciation is recognised using Straight-Line method so as to write off the cost of the investment
property less their residual values over their useful lives specified in Schedule II to the Companies
Act, 2013 or in case of assets where the useful life was determined by technical evaluation, over the
useful life so determined. Depreciation method is reviewed at each financial year end to reflect the
expected pattern of consumption of the future benefits embodied in the investment property. The
estimated useful life and residual values are also reviewed at each financial year end and the effect
of any change in the estimates of useful life/ residual value is accounted on prospective basis.
Freehold land and properties under construction are not depreciated.

An investment property is derecognised upon disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from the disposal.
Any gain or loss arising on derecognision of property is recognised in the Statement of Profit and
Loss in the same period.

L. Inventories

Inventories which comprise raw material, work in progress, finished goods, traded goods and stores
and spares are valued at the lower of cost and net realisable value. The basis of determining costs
for various categories of inventories is as follows:

i Raw Materials

Raw Material is valued at lower of cost or net realizable value. Cost ascertained on FIFO Basis
includes all the purchase price, duties and taxes which are not recoverable from government
authorities, freight inwards and other expenditure directly attributable to the acquisition.

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

ii Stores & Spares and Consumables

It includes cost of purchase and other costs incurred in bringing the inventories to their
present location and condition.

iii Work-In-Progress

Lower of cost and net realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating capacity.

iv Traded Goods

Lower of cost and net realizable value. Cost ascertained on FIFO Basis includes all the
purchase price, duties and taxes which are not recoverable from government authorities,
freight inwards and other costs incurred in bringing to their present location and condition.

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

M. Financial Instruments

i. Initial Recognition

Financial instruments i.e. Financial Assets and Financial Liabilities are recognised when the
Company becomes a party to the contractual provisions of the instruments. Financial
instruments are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial instruments (other than financial
instruments at fair value through profit or loss) are added to or deducted from the fair value
of the financial instruments, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial instruments assets or financial liabilities at fair
value through profit or loss are recognised in profit or loss.
ii Financial Assets

Subsequent Measurement

All recognised financial assets are subsequently measured at amortized cost using effective
interest method except for financial assets carried at fair value through Profit and Loss
(FVTPL) or fair value through Other Comprehensive Income (FVTOCI).

1) Equity Investments in Subsidiaries, Associates and Joint Venture

The Company accounts for its investment in subsidiaries, joint ventures and associates
and other equity investments in subsidiary companies at cost in accordance with Ind AS
27 - ''Separate Financial Statements''.

2) Equity Investments (other than investments in subsidiaries, associates and joint
venture)

All equity investments falling within the scope of Ind-AS 109 are mandatorily measured
at Fair Value through Profit and Loss (FVTPL) with all fair value changes recognized in
the Statement of Profit and Loss.

The Company has an irrevocable option of designating certain equity instruments as
FVTOCI. Option of designating instruments as FVTOCI is done on an instrument-by¬
instrument basis. The classification made on initial recognition is irrevocable.

If the Company decides to classify an equity instrument as FVTOCI, then all fair value
changes on the instrument are recognized in the Statement of Other Comprehensive
Income (SOCI). Amounts from SOCI are not subsequently transferred to profit and loss,
even on sale of investment.

3) Investment in Preference Shares

Investment in preference shares are classified as debt instruments and carried at
amortised cost if they are not convertible into equity instruments and are not held to
collect contractual cash flows. Other Investment in preference shares which are
classified as debt instruments are carried at FVTPL.

Investment in convertible preference shares of subsidiary, associate and joint venture
companies are treated as equity instruments and carried at cost. Other Investment in
convertible preference shares which are classified as equity instruments are mandatorily
carried at FVTPL.

4) De-recognition

A financial asset is primarily derecognized when the rights to receive cash flows from
the asset have expired, or the Company has transferred its rights to receive cash flows
from the asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a pass through arrangement; and with
that-

a. the Company has transferred substantially all the risks and rewards of the asset, or

b. the Company has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.

5) Impairment of Financial Assets

The Company assesses at each date of balance sheet whether a financial asset or a
group of financial assets is impaired. Ind AS 109 requires expected credit losses to be
measured through a loss allowance. The Company recognizes lifetime expected losses
for all trade receivables and/or contract assets that do not constitute a financing
transaction. For all other financial assets, expected credit losses are measured at an
amount equal to the 12 month expected credit losses or at an amount equal to the life
time expected credit losses if the credit risk on the financial asset has increased
significantly since initial recognition.

iii Financial Liabilities
Classification

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.

Subsequent measurement

The company have all the borrowings at floating interest rate. Being variable interest rate, it is
not possible to estimate future cash flows. Borrowings are recognised initially at an amount
equal to the principal receivable or payable on maturity. So, re-estimating the future cash
flows has no significant impact on the carrying value of Borrowings. Transaction costs are not
material to be included in the EIR calculation. So the carrying value is being considered as
amortised cost for all the borrowings bearing a floating interest rate. For trade and other
payables maturing within one year from the balance sheet date, the carrying are amortised
Cost.

Financial Liabilities recognised at FVTPL, including derivatives, are subsequently measured at
fair value.

1) Compound Financial Instruments

Compound financial instruments issued by the company is an instrument which creates
a financial liability on the issuer and which can be converted into fixed number of
equity shares at the option of the holders.

Such instruments are initially recognised by separately accounting the liability and the
equity components. The liability component is initially recognised at the fair value of a
comparable liability that does not have an equity conversion option. The equity
component is initially recognised as the difference between the fair value of the
compound financial instrument as a whole and the fair value of the liability component.
The directly attributable transaction costs are allocated to the liability and the equity
components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of the compound financial
instrument is measured at amortised cost using the effective interest method. The
equity component of a compound financial instrument is not re-measured
subsequently.

2) Financial Guarantee Contracts

Financial guarantee contracts are initially recognised as a liability at fair value. The
liability is subsequently measured at carrying amount less amortization or amount of
loss allowance determined as per impairment requirements of Ind AS 109, whichever is
higher. Amortisation is recognised as finance income in the Statement of Profit and
Loss.

3) De-Recognition

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

Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount is reported in the balance
sheet where there is a legally enforceable right to offset the recognised amounts and
there is an intention to settle on a net basis or realise the asset and settle the liability
simultaneously.

Re-classification of Financial Instruments

The Company determines classification of financial assets and liabilities on initial
recognition. After initial recognition, no re-classification is made for financial assets,
such as equity instruments designated at FVTPL or FVTOCI and financial liabilities or
financial assets which are debt instruments, a reclassification is made only if there is a
change in the business model for managing those assets.

N. Revenue Recognition
i Revenue

Revenue from contracts with customers is recognised when control of the goods is transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in
exchange for those goods or services. The Company has generally concluded that it is the principal in
its revenue arrangements because it typically controls the goods before transferring them to the
customer.

Sale of Goods

Revenue from sale of products is recognised at the point in time when control of the asset is
transferred to the customer.

2) Insurance & Other Claims

Revenue in respect of claims is recognized when no significant uncertainty exists with regard
to the amount to be realized and the ultimate collection thereof.

ii Contract Balances
1. Contract Assets

A contract asset is the right to consideration in exchange for goods or services transferred to
the customer. If the Company performs by transferring goods or services to a customer before
the customer pays consideration or before payment is due, a contract asset is recognised for
the earned consideration that is conditional.

Contract assets represent revenue recognized in excess of amounts billed and include unbilled
receivables. Unbilled receivables, which represent an unconditional right to payment subject
only to the passage of time, are reclassified to accounts receivable when they are billed under
the terms of the contract.

2) Trade Receivables

A receivable represents the Company''s right to an amount of consideration that is
unconditional (i.e., only the passage of time is required before payment of the consideration is
due).

3) Contract Liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the
Company has received consideration (or an amount of consideration is due) from the
customer. If a customer pays consideration before the Company transfers goods or services to
the customer, a contract liability is recognised when the payment is made, or the payment is
due (whichever is earlier). Contract liabilities are recognised as revenue when the Company
performs under the contract.

Contract liabilities include unearned revenue which represent amounts billed to clients in
excess of revenue recognized to date and advances received from customers. For contracts
where progress billing exceeds, the aggregate of contract costs incurred to date plus
recognised profits (or minus recognised losses, as the case may be), the surplus is shown as
contract liability and termed as unearned revenue. Amounts received before the related work
is performed are disclosed in the balance sheet as contract liability and termed as advances
received from customers.

Interest income on bank deposits and advances to vendors is recognized on a time proportion
basis taking into account the amount outstanding and the applicable interest rate. Interest
income is included under the head "Other Income" in the statement of profit and loss.

O. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of
a qualifying asset are capitalised during the period of time that is required to complete and
prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take
a substantial period of time to get ready for their intended use or sale.

i Borrowing Cost under Service Concession Arrangements

Borrowing costs attributable to the construction of qualifying assets under service concession
arrangement classified as intangible asset, are capitalised to the date of its intended use.
Borrowing costs attributable to concession arrangement classified as financial assets are
charged to Statement of Profit and Loss in the period in which such costs are incurred.

ii Other borrowing costs are charged to Statement of Profit and Loss in the period in which
they are incurred.

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Mar 31, 2017

Pact Industries Limited General Information :

Balance Sheet, Profit & Loss Accounts have been drawn on 31.03.2017 comprising of 12 months. (from 01.04.2016 to 31.03.2017) and previous year figures have been drawn as on 31.03.2016 comprising of 12 months (from 01.04.2015 to 31.03.2016).

The Company is a public limited company incorporated and domiciled in India and has its registered office at 303, Hotel The Taksonz, Opp. Railway Station G.T. Road, Ludhiana, Punjab, India. The Company has its primary listings on BSE Limited and MCX Stock Exchange in India.

Significant Accounting Policies :

a) BASIS OF PREPARATION

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules,2014.

b) REVENUE RECOGNITION:

Sales:

Revenue from sale of goods is recognized :

(i) when all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

(ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

Interest:

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable

Insurance and Other Claims

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

c) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Example of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, the useful lives of depreciable fixed assets and provisions for impairment.

d) FIXED ASSETS :

Fixed assets are stated at historical cost less accumulated depreciation. Interest on borrowed money allocated to and utilized for qualifying fixed assets, pertaining to the period up to the date of capitalization is capitalized. Assets acquired on direct finance lease are capitalized at the gross value and interest thereon is charged to profit and loss account. Intangible assets are stated at the consideration paid for acquisition less accumulated amortization .Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date and the cost of fixed assets not ready for use before such date are disclosed under capital work-in-progress

e) IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. In respect of goodwill the impairment loss will be reversed only when it was caused by specific external events and their effects have been reversed by subsequent external event..

f) INVENTORIES:

Raw materials, sub-assemblies and components are carried at the lower of cost and net realizable value. Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realizable value. Stores and spare parts are carried at cost, less provision for obsolescence. Finished goods produced or purchased by the Company are carried at lower of cost and net realizable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

g) TAXATION:

Current income tax expense comprises taxes on income from operations in India. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available to realize such assets. In other situations, deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets. Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance taxes paid and income tax provisions arising in the same tax jurisdiction and where the Company intends to settle the asset and liability on a net basis. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

h) FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Exchange differences arising on the settlement of monetary items or on reporting respective company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements ,are recognized as income or as expenses in the year in which they arise.

i) EMPLOYEE RETIREMENT BENEFITS :

Provident fund:

Employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee’s salary. A contribution is made to the provident fund trust is made to the Government’s provident fund. During the year Rs 77023.00 have been contributed towards the contribution plan.

j) PROVISIONS. CONTIGENT LIABILITIES AND CONTIGENT ASSETS:

A provision is recognized when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognized in the financial statements. A contingent asset is neither recognized nor disclosed in the financial statements.

k) CASH FLOW STATEMENT

Cash flows are reported using indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

l) CASH & CASH EQUIVALENTS

The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.

Depreciation

Depreciation on fixed assets is provided to the extent of Depreciable amount on the Written Down Value Method (WDV). Depreciation is provided based on useful life as prescribed in Schedule II to The Companies Act, 2013

Investments

Long term investments are stated at cost less provision for diminution in the value of such investments. Diminution in value is provided for where the management is of the opinion that the diminution is of permanent nature. Short term investments are valued at lower of cost and net realizable value

Borrowing costs

Borrowing costs directly attributable to acquisition or construction of fixed assets, which necessarily take a substantial period of time to get ready for their intended use are capitalized. Borrowing cost which are not relatable to qualifying asset are recognized as an expense in the period in which they are incurred.

Previous Year figures ended on 31.03.2016 have been given and some have been regrouped/rearranged for comparison.

Contingent Liabilities not provided for in respect of business during the year is NIL.

Debtors &Creditors Confirmations

The use of confirmation evidence is usually very important in the audit of trade debtors & creditors because there are few other sources of external corroborative evidence. It is usually suitable when the majority of the credit customers are reasonable-sized businesses because existence is an important assertion being verified, it is important that the source from which the sample is selected is tested for completeness. This usually requires selecting the sample from a list of balances that has been tested against the sales & purchase ledger respectively and totaled and agreed with the general ledger balance of debtor & creditors, Loans and advances are subject to confirmation and are taken/included in financial statement on the basis of entries in the books of accounts of the concern.

Operating Expenses Auditor’s remuneration

Auditor''s remuneration in relation to the company statutory audit amounts to Rs 25000.00. The following fees were payable by the company to their principal auditor, M/S Rajesh Mehru & Co.:

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Mar 31, 2015

A) BASIS OF PREPARATION

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules,2006, as amended] and the other relevant provisions of the Companies Act,1956.

b) REVENUE RECOGNITION:

Sales:

Revenue from sale of goods is recognized :

(i) when all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

(ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

Interest:

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable

Benefit under Duty Entitlement Pass Book Scheme / Duty Drawback Scheme Revenue in respect of the above benefit is recognized on post export basis.

Insurance and Other Claims

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

c) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Example of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, the useful lives of depreciable fixed assets and provisions for impairment.

d) FIXED ASSETS:

Fixed assets are stated at historical cost less accumulated depreciation. Interest on borrowed money allocated to and utilized for qualifying fixed assets, pertaining to the period up to the date of capitalization is capitalized. Assets acquired on direct finance lease are capitalized at the gross value and interest thereon is charged to profit and loss account. Intangible assets are stated at the consideration paid for acquisition less accumulated amortization . Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date and the cost of fixed assets not ready for use before such date are disclosed under capital work-in-progress

e) IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. In respect of goodwill the impairment loss will be reversed only when it was caused by specific external events and their effects have been reversed by subsequent external event..

f) INVENTORIES:

Raw materials, sub-assemblies and components are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at cost, less provision for obsolescence. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

g) TAXATION:

Current income tax expense comprises taxes on income from operations in India. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets. Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance taxes paid and income tax provisions arising in the same tax jurisdiction and where the Company intends to settle the asset and liability on a net basis. The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

h) FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Exchange differences arising on the settlement of monetary items or on reporting respective company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements ,are recognised as income or as expenses in the year in which they arise.

i) EMPLOYEE RETIREMENT BENEFITS :

Provident fund:

Employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee's salary. A contribution is made to the provident fund trust is made to the Government's provident fund. During the year Rs 87106.00 have been contributed towards the contribution plan.

j) WRITE OF MISCELLANEOUS EXP:

Revenue Expenditure is written off over as period of 10 years in accordance with provision of section 35-d of Income-Tax Act, 1961.

k) PROVISIONS, CONTIGENT LIABILITIES AND CONTIGENT ASSETS:

A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

l) CASH FLOW STATEMENT

Cash flows are reported using indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

m) CASH & CASH EQUIVALENTS

The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.

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Mar 31, 2014

A) BASIS OF PREPARATION

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules,2006, as amended] and the other relevant provisions of the Companies Act,1956.

b) REVENUE RECOGNITION: Sales:

Revenue from sale of goods is recognized :

(i) when all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

(ii) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Interest:

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable Benefit under Duty Entitlement Pass Book Scheme / Duty Drawback Scheme Revenue in respect of the above benefit is recognised on post export basis.

Insurance and Other Claims

Revenue in respect of claims is recognised when no significant uncertainity exists with regard to the amount to be realised and the ultimate collection thereof.

c) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Example of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, the useful lives of depreciable fixed assets and provisions for impairment.

d) FIXED ASSETS :

Fixed assets are stated at historical cost less accumulated depreciation.Interest on borrowed money allocated to and utilized for qualifying fixed assets, pertaining to the period up to the date of capitalization is capitalized. Assets acquired on direct finance lease are capitalized at the gross value and interest thereon is charged to profit and loss account. Intangible assets are stated at the consideration paid for acquisition less accumulated amortization .Advances paid towards the acquisition of fixed assets outstanding as of each balance sheet date and the cost of fixed assets not ready for use before such date are disclosed under capital work-in-progress

e) IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. In respect of goodwill the impairment loss will be reversed only when it was caused by specific external events and their effects have been reversed by subsequent external event..

f) INVENTORIES:

Raw materials, sub-assemblies and components are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at cost, less provision for obsolescence. Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

g) TAXATION:

Current income tax expense comprises taxes on income from operations in India. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise such assets. In other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise these assets.Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance taxes paid and income tax provisions arising in the same tax jurisdiction and where the Company intends to settle the asset and liability on a net basis.The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

h) FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.Exchange differences arising on the settlement of monetary items or on reporting respective company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements ,are recognised as income or as expenses in the year in which they arise.

i) EMPLOYEE RETIREMENT BENEFITS :

Provident fund:

Employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal to 12% of the covered employee''ssalary. A contribution is made to the provident fund trust is made to the Government''s provident fund.During the year Rs 130713.00 have been contributed towards the contribution plan.

j) WRITE OF MISCELLANEOUS EXP :

Revenue Expenditure is written off over as period of 10 years in accordance with provision of section 35-d of Income-Tax Act, 1961.

k) PROVISIONS, CONTIGENT LIABILITIES AND CONTIGENT ASSETS:

A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised in the financial statements. A contingent asset is neither recognised nor disclosed in the financial statements.

l) CASH FLOW STATEMENT

Cash flows are reported using indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

m) CASH & CASH EQUIVALENTS

The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.

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Mar 31, 2013

A) BASIS OF PREPARATION

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards! Rules,2006, as amended] and the other retevant provisions of the Companies Act,1956.

b) REVENUE RECOGNITION:

Sales:

Revenue from sale of goods is recognized.

(i) when all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

(it) No significant uncertainly exists regarding too amount of the consideration that will tie derived from the sale of goods

Interest:

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable Benefit under Duty Entitlement Pass Bock Scheme / Duty Drawback Scheme Revenue in respect of the above benefit is recognised on post export basis.

Insurance and Other Claims

Revenue in respect of claims is recognised when no significant uncertainly exists with regard to the amount to be realised and the ultimate collection thereof.

c) USE OF ESTIMATES

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year Example of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, the useful fives of depreciable fixed assets anti provisions for impairment.

d) FIXED ASSETS

Fixed assets are slated at historical cost less accumulaled depreciation Interest on borrowed money allocated to and utilized for qualifying fixed assets, pertaining to the period up to the dale of capitalization is capitalized Assets acquired on direct finance lease are capitalized at the gross value and interest thereon is charged Id profit and loss account Intangible assets are stated at the consideration paid for acquisition less accumulaled amortization Advances paid towards lire acquisition of fixed assets outstanding as of each balance sheet dale and the cost of fixed assets not ready for use before such dale arc disclosed under capital work-in-

e) IMPAIRMENT OF ASSETS

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such Indication exists, the Company estimates the recoverable amount of toe asset If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs to is less than 4s carrying amount. the carrying amount Is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the profit and loss account. It at the balance sheet dale there Is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical coat. In respect ot goodwill the impairment toss will be reversed only when it was caused by specific external events and their effects have bean reversed by subsequent external event..

f) INVENTORIES:

Raw materials sub-assemblies and components are carried a! the lower of cost and net realisable value. Cost Is determined on a weighted average basis Purchased goods-in -transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores and spare parts are carried at cost less provision for obsolescence Finished goods produced or purchased by the Company are carried at tower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of manufacturing overheads.

g) TAXATION:

Current income tax expense comprises faxes on Income from operations In India. Income tax payable in India is determined In accordance with the provisions of the Income Tax Act. 1961 Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods Deferred tax assets and liabilities are measured using the lax rales and tax laws that have been enacted or substantively enacted by the balance sheet date.

In the event of unabsorbed depreciation and carry forward of tosses, deferred lax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable Income will Be available to realise such assets 111 other situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realise those assets Advance taxes and provisions for current Income taxes are presented in the balance sheet after off setting advance taxes paid and Income tax provisions arising in the same tax jurisdiction and where the Company Intends lo settle the asset and liability on a net basis.The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

h) FOREIGN CURRENCY TRANSACTIONS :

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the Foreign currency at the dale of the transaction Exchange differences arising on the settlement of monetary items or on reporting respective company's monetary items at rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognised as income or as expenses in the year in which they arise

i) EMPLOYEE RETIREMENT BENEFITS Provident fund:

Employees receive benefits from a provident fund, a defined contribution plan. The employee and employer each make monthly contributions to the plan equal lo 12% of the covered employee salary A contribution is made to the provident fund trust is made to the Government's provident fund. During the year Rs 1 40484.00 have Been contributed towards the contribution plan

j) WRITE OF MISCELLANEOUS EXP

Revenue Expenditure is written off over as period of 10 years In accordance with provision of section 35-d of Income-Tax Act. 1961,

k) PROVISIONS. CONTIGENT LIABILITIES AND CONTIGENT ASSETS:

A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required lo settle the obligation, in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value and are determined based on best estimate required lo settle toe obligation at the balance sheet dale These are reviewed at each balance Sheet date and adjusted to reflect the current best estimates: Contingent liabilities are not recognised in the financial statements. A contingent asset Is neither recognised nor disclosed in the financial statements

l) CASH FLOW STATEMENT

Cash flows are reported using indirect method, whereby net profit before lax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of post or future cash receipts or payments The cash flows from regular revenue generating, investing and financing activities of the Company are segregated.

m) CASH & CASH EQUIVALENTS

The Company considers at highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the dale al purchase, to be cash equivalents.

Depreciation

The Company has provided for depredation al the rates specified In Schedule XIV to the Companies Act. 1956, except In cases of the following assets, which are depreciated at commercial rales, which are higher than the rates specified In Schedule XIV.

Investments

Long term investments are stated at cost less provision for diminution in the value of such investments. Diminution in value Is provided for where the management is of the opinion that the diminution is of permanent nature. Short term investments are valued at lower of cost and net realizable value

Borrowing casts

Borrowing costs directly attributable to acquisition or construction of fixed assets, which necessarily lake a substantial period of lime to get ready for their intended use are capitalised. Borrowing cost which are not relable to qualifying asset are recognized as an expense In the period in which they are incurred.

Previous Year figures ended on 31.03.2012 have been given and same have been regrouped/rearranged lor comparison. Contingent Liabilities not provided for in respect of business during the year is nil.

Debtors &Creditors Confirmations

The use of confirmation evidence is usually very important in the audit of trade debtors & creditors because there are few other sources of external corroborative evidence. II is usually suitable when the majority of the credit customers are reasonable-sized businesses because existence is an important assertion being verified, It is important that the source from which the sample is selected is tested for completeness this usually requires selecting the sample from a list of Balances that has been tested against the sales & purchase ledger repectively and totaled and agreed with the general ledger balance Balance of debtor & creditors, Loans and advances are subject to confirmation and are taken/included in financial statement on the basis of entries in foe books of accounts of the concern.

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Mar 31, 2012

The financial statements are prepared under the historical cost convention, on accrual basis of accounting, in accordance with the Accepted Accounting Principles in India and comply with the mandatory Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006, to the extent applicable and the presentational requirements of the Companies Act, 1956. The accounting polices followed are stated below:

a) ACCOUNTING METHOD :

The company has adopted the mercantile system of accounting in preparation of the financial statements.

b) FIXED ASSETS :

The Company has stated Fixed Assets at cost of acquisition/construction net of Cenvat credit, including all incidental expenses attributable to the acquisition and installation of assets, upto the date when the assets are ready for use. The cost includes all pre- operative expenses relating to construction/pre-installation period including direct and allocable indirect expenses. During the year ended 31.03.2012 the company has converted some of its fixed assets into stock in trade, as a result of which the value of the assets converted into stock in trade had been deducted from the machinery block of the fixed assets. The treatment given is in conformity with the AS-10 "fixed assets" issued by ICAI. The value of the asset converted and the block under which it falls is Rs. 9294027.91/- and the same has being disclosed under the Note-12 of the balance sheet under the head "Inventories".

c) DEPRECIATION :

The Company has been charged on fixed assets as per the rates prescribed in the Companies Act, 1956 during the year. During the year ended 31.03.2012 the company has converted some of its fixed assets into stock in trade, as a result of which the value of the assets converted into stock in trade had been deducted from the machinery block of the fixed assets. As per the guidelines laid down by the AS-6 "Depreciation Accounting" the company had reduced the amount of the accumulated depreciation standing in the books against these assets converted into stock in trade. The same had been adjusted against the Gross block to give a fair view of the present standing of the Block in the books of the company. The amount adjusted is as follows:

The depreciation on this block is claimed after the adjustment had been done on the remaining assets.

d) INVENTORIES:

Stock have been Valued at cost or market price, which ever is lower. During the year some fixed assets have been converted into stock in trade. The same has being disclosed along with the normal inventories under the Note-12 "inventories".

e) EMPLOYEE BENEFITS & RETIREMENT BENEFITS :

(i) EMPLOYEE BENEFITS:

The company had contributed Rs. 114708.00/- to the funds like E.S.I. & E.P.F. for the benefit of the employees. Apart from this the company had also paid Rs. 201467.00/- & Rs. 116010.00/- to employees as Bonus & Leave with wages during the year.

(ii) RETIREMENT BENEFITS:

Since none of employees completed the continues period of 5 years as stipulated under the Payment of Gratuity act. No provision for gratuity has been made.

f) WRITE OF MISCELLANEOUS EXP :

Revenue Expenditure if any is written off over the period as is described & in accordance with provisions of section 35-d of Income-Tax Act, 1961.

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Mar 31, 2011

The financial statement have been prepared in accordance with accepted accounting Standards and relevant Presentations requirement of the convention and on the accounting policies followed which are stated below:

a) ACCOUNTING METHOD

The company has adopted the mercantile system of accounting in preparation of the financial statements.

b) FIXED ASSETS

The Company has stated Fixed Assets at cost of acquisition/construction. The cost includes all pre-operative expenses relating to construction/pre-installation period including direct and allocable indirect expenses.

c) DEPRECIATION

1) Fixed Assets figures have been shown at book value , depreciation upto date have been credited to the separe reserve a/c.

2) The company has provided depreciation on W.D.V. method as per the Inocme Tax Act,1961.

d) INVENTORIES

Inventories has been valued at cost or market price whichever is lower.

e) RETIREMENT BENEFITS

Since none of employees completed the continues period of 5 years as stipulated under the Payment of Gratuity act. No provisions for gratuity has been made.

e) WRITE OF MISCELLANEOUS EXP.

Revenue Expenditure is written off over as period of 10 years in accordance with provision of section 35-d of Income-Tax Act, 1961.