Accounting Policies of Pratiksha Chemicals Ltd. Company

Mar 31, 2024

1. Significant accounting policies
Basis of preparation of financial statements

The financial statements are prepared on going concern basis in accordance with Indian
Accounting Standards (Ind-AS) notified under the Companies (Indian Accounting Standards)
Rules, 2015.

The financial statements have been prepared under the historical cost convention and on
accrual basis, except for certain financial assets and liabilities which have been measured at fair
value (Refer accounting policy regarding financial instruments)

The financial statements are presented in INR, except when otherwise indicated.

i) Current versus non-current classification

The Company presents assets and liabilities in the Balance Sheet based on current/ non-current
classification. An asset is classified as current when it is:

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

• Held primarily for the purpose of trading

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

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is classified 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

The Company classifies all other liabilities as non-current.

The company has identified 12 months as its operating cycle.

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

ii) Revenue Recognition

Revenue shall be recognised when the entity has transferred to the buyer the significant risk
and rewards of ownership of goods, the entity retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the
goods sold, the amount of revenue can be measured reliably, it is probable that the economic
benefits associated with the transaction will flow to the entity, and the costs incurred or to be
incurred in respect of the transaction can be measured reliably.

Amount due in respect of the claim is recognized as revenue only when there are conditions
stipulated in the contracts for such claims are evidenced inter-alia by way of confirmation by
the customers.

a) Dividend income

Dividend income is recognised when the Company''s right to receive the payment is established,
which is generally when shareholders approve the dividend.

b) Interest income

For all debt instruments measured at amortized cost and interest-bearing financial assets
classified as fair value through other comprehensive income, interest income is recognized
using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future
cash receipts through the expected life of the financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the financial asset. Interest income is included in
''finance income'' in the statement of profit and loss. Interest income on interest bearing
financial assets classified as fair value through profit and loss is shown under other income.

iii) Exceptional items

On certain occasions, size, type or incidence of an item of income or expense, pertaining to the
ordinary activities of the company, is such that its disclosure improves an understanding of the
performance of the Company. Such income or expense is classified as an exceptional item and
accordingly disclosed in the notes to accounts.

iv) Property, Plant and Equipment

Since there is no change in the functional currency, the Company has elected to continue with
the carrying value for all of its property, plant and equipment as recognised in its previous
GAAP financial statements as deemed cost at the transition date, viz., 1 April, 2015.

Subsequent to initial recognition, property, plant and equipment are stated at cost net of
accumulated depreciation and accumulated impairment losses, if any. Such cost includes the
cost of replacing part of the plant and equipment and borrowing costs for long-term
construction projects if the recognition criteria are met. When significant parts of plant and
equipment are required to be replaced at intervals, the Company depreciates them separately
based on their specific useful lives. The carrying amount of the replaced part accounted for as a
separate asset previously is derecognized. Likewise, when a major inspection is performed, its
cost is recognized in the carrying amount of the plant and equipment as a replacement if the

recognition criteria are satisfied. All other repair and maintenance costs are recognised in the
statement of profit and loss when incurred. The present value of the expected cost for the
decommissioning of an asset after its use is included in the cost of the respective asset if the
recognition criteria for a provision are met.

Depreciation on property, plant and equipment is provided on written down value basis as per
the rate derived on the basis of useful life and method prescribed under Schedule - III of the
Companies Act 2013.

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

v) Intangible Assets:

Since there is no change in the functional currency, the Company has elected to continue with
the carrying value for all of its intangible assets as recognised in its previous GAAP financial
statements as deemed cost at the transition date, viz., 1 April, 2015

Intangible assets with finite lives are amortised over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life
are reviewed at least at the end of each reporting period. Changes in the expected useful life or
the expected pattern of consumption of future economic benefits embodied in the asset are
considered to modify the amortisation period or method, as appropriate, and are treated as
changes in accounting estimates. The amortisation expense on intangible assets with finite lives
is recognised in the statement of profit and loss.

vi) 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. These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded companies or other available fair value
indicators.

The Company bases its impairment calculation on detailed budgets and forecast calculations,
which are prepared separately for each of the Company''s CGUs to which the individual assets
are allocated. These budgets and forecast calculations generally cover a period of five years.
For longer periods, a long-term growth rate is calculated and applied to project future cash
flows after the fifth year.

vii) Taxes on income

a) Current tax

Current income tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or substantively enacted by
the reporting date. Current taxes are recognized in profit or loss except to the extent that the
tax relates to items recognized in other comprehensive income or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate.

b) Deferred tax

Deferred income tax is recognized on all temporary differences which are the differences
between the carrying amount of an asset or liability in the statement of financial position and
its tax base except when the deferred income tax arises from the initial recognition of an asset
or liability that effects neither accounting nor taxable profit or loss at the time of the
transaction.

Deferred tax liabilities are recognized for all taxable temporary differences; and deferred tax
assets are recognized for all deductible temporary differences, the carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that future taxable profit will be
available against which the deductible temporary differences, and the carry-forward of unused
tax credits and unused tax losses can be utilized.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
the year when the asset is realized or the liability is settled, based on tax rates and tax laws that
have been enacted or substantively enacted at the reporting date and based on the tax
consequence which will follow from the manner in which the Company expects, at financial
year end, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax relating to item recognised outside the statement of profit and loss is recognised
outside the statement of profit and loss. Deferred tax items are recognised in correlation to the
underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to
set off current income tax assets against current income tax liability and the deferred taxes

The company has shifted to tax u/s 115BAA w.e.f AY 2022-23 (relevant FY 2021-22) under
Income Tax Act, and therefore the outstanding MAT credit remain unutilised of earlier year has
been reversed to Profit and Loss Account, Further MAT will not be applicable in the future and
therefor there will be no effect in Deferred Tax relating to MAT provisions.

vii) Foreign Currency transactions

The Company''s financial statements are presented in INR, which is also the company''s
functional currency. Foreign currency transactions are recorded on initial recognition in the
functional currency, using the exchange rate at the date of the transaction. At each balance
sheet date, foreign currency monetary items are reported using the closing exchange rate.
Exchange differences that arise on settlement of monetary items or on reporting at each
balance sheet date of the Company''s monetary items at the closing rate are recognised as
income or expenses in the period in which they arise. Non-monetary items which are carried at
historical cost denominated in a foreign currency are reported using the exchange rate at the
date of transaction.

viii) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand and other short term highly
liquid investments with an original maturity of three months or less that are readily convertible
to a known amount of cash and are subject to an insignificant risk of changes in value.

ix) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period
attributable to equity shareholders (after deducting preference dividends and attributable
taxes) by the weighted average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or loss for the period
attributable to equity shareholders and the weighted average number of shares outstanding
during the period are adjusted for the effects of all dilutive potential equity shares except when
the results would be anti-dilutive.

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Mar 31, 2014

(a) Basis of preparation of financial statements:

These financial statements have been prepared on the accrual basis of accounting, under the historical cost convention, and in accordance with the Companies Act, 1956 and the applicable accounting standards issued by The Institute of Chartered Accountants of India.

(b) Use of estimates:

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Differences between the actual result and estimates are recognised in the period in which the results are known/ determined.

(c) Fixed Assets:

(i) Fixed Assets are stated at their original cost including incidental expenses related to acquisition and installation, less accumulated depreciation. Cost comprises of the purchase price and any other attributable cost of bringing the assets to its working condition for its intended use.

(ii) Capital Work in Progress is stated at cost.

(d) Impairment of Assets

An asset is treated as impaired when its carrying cost exceeds its recoverable value. An

impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(e) Borrowing Costs:

Borrowing Costs that are directly attributable to acquisition of qualifying assets are capitalized for the period until the asset is ready for intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing

costs are recognized as an expense in the period in which they are incurred. No borrowing costs are eligible for capitalization during the year.

(f) Depreciation:

Depreciation on assets is provided on the Straight Line Method at rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

(g) Investments:

Investments are valued at cost. Provision for diminution in the value of Long Term investment is made only if, such decline is not temporary in nature in the opinion of the management.

(h) Inventories:

(i) Stock in trade comprising of raw materials (including goods in transit), packing material, stock in process and finished goods are valued at the lower of cost and net realizable value after making such provisions as required on account of damage, unserviceable and obsolete stocks

(ii) Stocks of stores, spares and consumable are valued at cost.

(i") Value of raw material and packing material does not include excise duty, counter veiling duty paid to the extent of which CENVAT credit is available.

(iv) Excise duty on goods manufactured by the company and remaining in inventory is included as a part of valuation of finished goods.

(i) Retirement Benefits:

(i) Contributions to provident fund are made at predetermined rates to Government Authority and charged to profit and loss account.

(ii) The Company is accounting for gratuity and leave encashment on cash basis.

(j) Revenue Recognition:

(i) Sales are recognized when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risks and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods. Sales are stated at contractual realizable values, net of excise duty, sales tax and trade discounts.

(ii) Commission income is recognized as per contracts/receipt of credit note.

(iii) Job work Income is recognized when the goods are transferred to buyer and where no uncertainty exists regarding realization of revenue.

(k) Foreign Currency Transactions:

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

(ii) In respect of monetary items denominated in foreign currencies, exchange differences arising out of settlement or on conversion at the closing rate are recognized in the Profit and Loss Account, other than exchange differences on acquisition of fixed assets, which are adjusted in the carrying amount of fixed assets.

(l) Stores and Spares:

Items of stores and spares are charged to the revenue at the stage of purchase and stocks of such items as at the end of the year is accounted at cost.

(m) Research and Development Expenditure:

Revenue Expenditure in respect of Research and Development is charged to the Profit and Loss Account and Capital Expenditure is added to the cost of Fixed Assets in the year in which it is incurred.

(n) Taxation:

Provision for income-tax is based on the taxable income computed in accordance with the provision of the Income-tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, 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 period.

(o) Provisions. Contingent Liabilities and Contingent AssPts:

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

(p) Amortization of Deferred Revenue Expenditure:

The Company is amortizing l/5th of Deferred Revenue Expenditure every year.

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Mar 31, 2012

(a) Basis of preparation of financial statements :

These financial statements have been prepared on the accrual basis of accounting, under the historical cost convention, and in accordance with the Companies Act, 1956 and the applicable accounting standard issued by The Institute of Chartered Accountants of India.

(b) Use of estimates :

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Differences between the actual result and estimates are recognised in the period in which the results are known/ determined.

(c) Fixed Assets :

(i) Fixed Assets are stated at their original cost including incidental expenses related to acquisition and installation, less accumulated depreciation. Cost comprises of the purchase price and any other attributable cost of bringing the assets to its working condition for its intended use.

(ii) Capital Work in Progress is stated at cost.

(d) Impairment of Assets :

An asset is treated as impaired when its carrying cost exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(e) Borrowing Costs :

Borrowing Costs that are directly attributable to acquisition of qualifying assets are capitalized for the period until the asset is ready for intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognizing as an expense in the period in which they are incurred. No borrowing costs are eligible for capitalization during the year.

(f) Depreciation :

Depreciation on assets is provided on the straight line method at rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

(g) Investments :

Investments are valued at cost. Provision for diminution in the value of Long Term investment is made only if, such decline is not temporary in nature in the opinion of the management.

(h) Inventories :

(i) Stock in trade comprising of raw materials (including goods in transit), packing material, stock in process and finished goods are valued at the lower of cost and net realizable value after making such provisions as required on account of damage, unserviceable and obsolete stocks

(ii) Stocks of stores, spares and consumable are valued at cost.

(iii) Value of raw material and packing material does not include excise duty, counter veiling duty paid to the extent of which CENVAT credit is available.

(iv) Excise duty on goods manufactured by the company and remaining in inventory is included s a part of valuation of finished goods.

(i) Retirement Benefits :

(i) Contributions to provident fund are made at predetermined rates to Government Authority and charged to profit and loss account.

(ii) The Company is accounting for gratuity and leave encashment on cash basis.

(j) Revenue Recognition :

(i) Sales are recognized when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risks and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods. Sales are stated at contractual realizable values, net of excise duty, sales tax and trade discounts.

(ii) Commission income is recognized as per contracts/receipt of credit note.

(iii) Job work Income is recognized when the goods are transferred to buyer and where no uncertainty exists regarding realization of revenue.

(k) Foreign Currency Transactions :

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

(ii) In respect of monetary items denominated in foreign currencies, exchange differences arising out of settlement or on conversion at the closing rate are recognized in the Profit and Loss Account, other than exchange differences on acquisition of fixed assets, which are adjusted in the carrying amount of fixed assets.

(l) Stores and Spares :

Items of stores and spares are charged to the revenue at the stage of purchase and stocks of such items as at the end of the year is accounted at cost.

(m) Research and Development Expenditure :

Revenue Expenditure in respect of Research and Development is charged to the Profit and Loss Account and Capital Expenditure is added to the cost of Fixed Assets in the year in which it is incurred.

(n) Taxation :

Provision for income-tax is based on the taxable income computed in accordance with the provision of the Income-tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, 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 period.

(o) Provisions, Contingent Liabilities and Contingent Assets :

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

(p) Amortization of Deferred Revenue Expenditure :

The Company is amortizing 1/5 of Deferred Revenue Expenditure every year.

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Mar 31, 2010

(a) Basis of preparation of financial statements basis of accounting, under the historical These financial statements have been prepared on the accrual basis of accounting cost convention, and in accordance with the standard issued by The Institute of Chartered Accountants of India.

(b) Use of estimates :

The presentation of financial statements requires estimates and, statements and effect the reported amount of assets and liabitilties reported period. Differences between determined,

(c) Fixed Assets : incidental expenses related to acquisition

(i) Fixed Assets are stated at their original cost including purchase price and any

(ii) Capital Work in Progress is stated at cost.

(d)Impaiment of Assets: An asset is treated as impired when its carrying cost exceeds its recverable value An impirment loss is charged to the Profit and Loss Account in the year in which as asset is identfied as impanired The impirment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(e) Borrowing Costs:

Borrowing Costs that are directly attributable to acquisition of qualfying assets are capitalized for the period unitil the assset is ready for the period unit the asset is ready for intended use A qualifying assets is an asset that necassarily takes substantial period of time to get ready for its intended us Other borrowing costs are recognize as an expense in the period in which they are incurred. No borrowing cost are eligible for capitalization during the year.

(f) Depreciation

Depreciation on assets is provided on the straight line method at rates and in the manner prescribed in schedule XIV to the Companies Act, 1956

(g) Investments:

Investments are valued at cost Provision for diminution in the value of Long Term investment is made only if, such decline is not temporary in nature in the opinion of the management.

(h) Inventories:

(i) Stock in trade comprising of raw materials (including goods in transit), packing material, stock in process and finished goods are valued at the lower of cost and net realizable value after making such provisions as required on account of damage, unserviceable and obsolete stocks

(ii) Stocks of stores, spares and consumable are valued at cost.

(iii) Value of raw material and packing material does not include excise duty, counter valid duty paid to the extent of which CENVAT credit is available.

(iv) Excise duty on goods manufactured by the company and remaining in inventory is included as a part of valuation of finished goods.

(i) Retirement Benefits :

(i) Contributions to provident fund are made at predetermined rates to Government Authority and charged to profit and loss account.

(ii) The Company is accounting for gratuity and leave encashment on cash basis.

(j) Revenue Recognition :

(i) Sales are recognized when the seller has transferred to the buyer, the property in the goods, for a price or all significant risks and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods. Sales are stated at contractual realizable values, net of excise duty, sales tax and trade discounts.

(ii) Commission income is recognized as per contracts/receipt of credit note

(iii) Job work Income is recognized when the goods are transferred to buyer and where no uncertainty exists regarding realization of revenue.

(k) Foreign Currency Transactions :

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

(ii) In respect of monetary items denominated in foreign currencies, exchange differences arising out of settlement or on conversion at the closing rate are recognized in the Profit and Loss Account, other than exchange differences on acquisition of fixed assets, which are adjusted in the carrying amount of fixed assets.

(l) Stores add Spares:

ltems of stores and spares are charged to the revenue at the stage of purchase and stocks of such items as at the end of the year is accounted at cost.

(m) Research and Development Expenditure :

Revenue Expenditure in respect of Research and Development is charged to the Profit and Loss Account and Capital Expenditure is added to the cost of Fixed Assets in the year in which it is incurred.

(n) Provision for income-tax is based on the taxable income computed in accordance with the provision of the income-tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, on Snug 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 period. Deferred tax assete

are recognized on unabsorbed depreciation and carry forward of losses based on virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

(o) Provisions, Contingent Liabilities and Contingent Assets :

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

(p) Amortization of Deferred Revenue Expenditure :

The Company is amortizing 1/5th of Deferred Revenue Expenditure every year.

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Mar 31, 2009

(a) Basis of preparation o1| financial statements:

These financial statements have been prepared on the accrual basis of accounting, under the historical cost convention, and in accordance with the Companies Act, 1956 and the applicable accounting standard issued by The Institute of Chartered Accountants of India.

(b) Use of estimates

The presentation of firancial statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Differences between the actual result and estimates are recognised in the period in which the results are known/ determined.

(c) Fixed Assets:

(i) Fixed Assets are stated at their original cost including incidental expenses related to acquisition and installation, less accumulated depreciation. Cost comprises of the purchase price and any other attributable! cost of bringing the assets to its working condition for its intended use.

(ii) Capital Work in progress is stated at cost.

(d) Impairment of Assets

An asset is treated as impaired when its carrying cost exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the • estimate of recoverable amount.

(e) Borrowing Costs:

Borrowing Costs that are directly attributable to acquisition of qualifying assets are capitalized for the period until the asset is ready for intended use. A qualifying assets is an asset, that necessarily takes substantial period of ti|me to get ready for its intended use. Other borrowing costs are recognize as an expense in the period in which they are incurred. No borrowing costs are eligible for capitalization during the year.

(f) Depreciation:

Depreciation on assets is provided on the straight line method at rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

(g) Investments:

Investments are valued at cost. Provision for diminution in the value of Long Term investment is made only if, such decline is not temporary in nature in the opinion of the management.

(h) Inventories:

(i) Stock in trade comprising of raw materials (including goods in transit), packing material, stock in process and finished goods are valued at the lower of cost and net realizable value after making such provisions as required on account of damage, unserviceable and obsolete stocks

(ii) Stocks of stores, spares and consumable are valued at cost.

(iii) Value of raw material and packing material does not include excise duty, counter valid duty paid to the extent of which CENVAT credit is available.

(iv) Excise duty on goods manufactured by the company and remaining in inventory is included as a part of valuation of finished goods.

(i) Retirement Benefits:

(i) Contributions to provident fund are made at predetermined rates to Government Authority and charged to profit and loss account.

(ii) The Company is accounting for gratuity and leave encashment on cash basis.

(j) Revenue Recognition:

(i) Sales are recognized when the seller has transferred to the buyer, the property in the goods, for a price, or all significant risks and rewards of ownership have been transferred to the buyer without the seller retaining any effective control over the goods. Sales are stated at contractual realizable values, net of excise duty, sales tax and trade discounts.

(ii) Commission income is recognized as per contracts/receipt of credit note.

(iii) Job work Income is recognized when the goods are transferred to buyer and where no uncertainty exists regarding realisation of revenue.

(k) Foreign Currency Transactions:

(i) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.

(ii) In respect of monetary items denominated in foreign currencies, exchange differences arising out of settlement or on conversion at the closing rate are recognized in the Profit and Loss Account, other than exchange differences on acquisition of fixed assets, which are adjusted in the carrying amount of fixed assets.

(l) Stores and Spares:

Items of stores and spares are charged to the revenue at the stage of purchase and stocks of such items as at the end of the year is accounted at cost.

(m) Research and Development Expenditure:

Revenue Expenditure in respect of Research and Development is charged to the Profit and Loss Account and Capital Expenditure is added to the cost of Fixed Assets in the year in which it is incurred.

(n) Taxation:

Provision for income-tax is based on the taxable income computed in accordance with the provision of the Income-tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, 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 period. Deferred tax assets are recognized on unabsorbed depreciation and carry forward of losses based on virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

(o) Provisions, Contingent Liabilities and Contingent Assets

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

(p) Amortization of Deferred Revenue Expenditure:

The Company is amortizing 1/5th of Deferred Revenue Expenditure every year.