Accounting Policies of Regency Ceramics Ltd. Company

Mar 31, 2024

1.A Material Accounting Policies:

1.1) Basis of Preparation of Financial Statements

a. Compliance with Ind AS

The Financial Statements comply in all material aspects with Indian Accounting Standards (“Ind
AS”) notified under Section 133 of the Companies Act, 2013 (“the Act”), and relevant rules issued
thereunder and the relevant provisions of the Act. In accordance with proviso to Rule 4A of the
Companies (Accounts) Rules, 2014, the terms used in these financial statements are in accordance
with the definitions and other requirements specified in the applicable Accounting Standards.

b. Historical Cost Convention

These Ind AS Financial Statements have been prepared on a going concern basis using historical
cost convention and on an accrual method of accounting, except for certain financial assets and
Financial Liabilities that are measured at fair values at the end of each reporting period, as stated
in the accounting policies set out below. The accounting policies have been applied constantly
over all the periods presented in these financial statements.

The Financial Statements are presented in INR which is also the Company’s functional currency,
and all values are rounded to the nearest Lakhs (INR 00,000), except when otherwise indicated.

1.2) Use of Estimates

The preparation of Financial Statements in conformity with the Indian Generally Accepted
Accounting Principles (GAAP) requires the management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the
date of the financial statements and reported amount of income and expenses during the period.
Actual figures may differ from these estimates. Any revision to the accounting estimates is
recognized prospectively in current and future periods.

Key Assumptions

1.3) Plant and Equipment-Tangible Assets:

i. Plant and Equipment are stated at historical cost less accumulated depreciation. Cost directly
attributable to acquisition are capitalized until the Plant and Equipment are ready to for use,
as intended by the management.

ii. Subsequent expenditure relating to Plant and Equipment are capitalized only when it is
probable that the future economic benefits associated with them will flow to the Company
and the cost of the expenditure can be measured reliably. Repairs and Maintenance costs are
recognized in the statement of Profit and Loss when they are incurred.

iii. Depreciation on Plant and Equipment has been provided under Straight Line Method over
the useful life of assets estimated by the management which is in line with terms prescribed

in Schedule II of the Companies Act-2013 except the assets costing Rs.5000 or less on which
depreciation is charged @ 100% in the year of acquisition. Depreciation for assets purchased
/sold during the period is proportionately charged. Depreciation methods, useful lives &
residual values are reviewed periodically.

The management estimates the useful life of the assets as follows:

Plant and Equipment (Process) : 25years

Plant and Equipment (Others) : 15 years

Buildings (Factory Buildings) : 30 years

Buildings (other than Factory Buildings) : 60 years

iv. Transition to Ind AS: On transition to Ind AS, the Company has selected to continue with the
carrying value of all of its Plant and Equipment recognised as at April 1, 2016 measured as per the
previous GAAP and use that carrying values as deemed cost of the Plant and Equipment.

1.4) Inventory:

Inventories are valued at the lower of Cost or Net Realizable Value. The cost is determined on
Weighted Average basis. Cost of finished goods and work-in-process include all costs of
purchases, conversion costs and other costs incurred in bringing the inventories to their present
location and condition. Stores and Packing Materials are valued at cost on weighted average basis.

1.5) Financial Instruments:

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

A. Financial Assets:

Initial recognition and measurement

All financial instruments are recognized initially at fair value plus, in the case of financial assets
not recorded at fair value through Profit & Loss account transaction costs that are attributable to
the acquisition of the financial asset, purchase or sales of financial assets that require delivery of
assets within a time frame established by regulation or convention in the market place are
recognized on the trade date i.e. the date that the Company commits to purchase or sell the asset.

Subsequent Measurement

For the purpose of subsequent measurement, financial assets are classified and measured at:

i. Amortized Cost

ii. Fair Value Through Profit and Loss (FVTPL)

iii. Fair Value Through Other Comprehensive Income (FVTOCI)

Financial Asset measured at Amortized Cost

Financial Assets held within a business model whose objective is to hold financial assets in order
to collect contractual cash flows and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal

amount outstanding are measured at amortized cost using effective interest rate (EIR) method.
The EIR amortization is recognized as finance income in the Statement of Profit & Loss.

The Company, while applying above criteria has classified all the financial assets (except
investments in equity shares) at Amortized Cost.

Financial Assets at Fair Value Through Profit and Loss (FVTPL)

Financial Assets are measured at fair value through Profit & Loss if it does not meet the criteria
for classification as measured at Amortized Cost or at FVTOCI. All fair value changes are
recognized in the Statement of Profit & Loss.

Financial Assets Measured at Fair Value Through Other Comprehensive Income

Financial assets that are held within a business model whose objective is achieved by both, selling
financial assets and collecting contractual cash flows that are solely payments of principal and
interest, are subsequently measured at Fair Value Through Other Comprehensive Income. Fair
value movements are recognized in the Other Comprehensive Income (OCI). Interest income
measured using the EIR method and impairment Losses, if any are recognized in the Statement
of Profit and Loss. On de-recognition, cumulative gain or Loss previously recognized in OCI is
reclassified from the equity to other income in the Statement of Profit and Loss.

De-recognition of Financial Assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire, or it transfers the contractual rights to receive the cash flows from the
asset.

Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for
measurement and recognition of impairment Loss on the debt instruments, that are measured at
amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance. Expected
Credit Loss is the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the entity expects to receive.

The management uses a provision matrix to determine the impairment Loss on the portfolio of
trade and other receivables. The provision matrix is based on its historically observed Expected
Credit Loss rates over the expected life of the trade receivables and is adjusted for forward¬
looking estimates.

Expected Credit Loss allowance or reversal recognized during the period is recognized as income
or expense, as the case may be, in the Statement of Profit and Loss. In case of Balance Sheet, it
is shown as reduction from the specific financial asset.

B. Financial Liabilities.

Initial Recognition and Measurement

Financial Liabilities are recognized initially at fair value plus any transaction cost that are
attributable to the acquisition of the financial liability except Financial Liabilities at FVTPL that
are measured at fair value.

Subsequent Measurement

Financial Liabilities are subsequently measured at amortized cost using the EIR method. Financial
Liabilities carried at Fair Value Through Profit and Loss. Gain or Losses on liabilities held for
trading are recognized in the Statement of Profit and Loss.

The Company does not designate any Financial Liability at Fair Value Through Profit and Loss.
Financial Liabilities at Amortized cost

Amortized cost for Financial Liabilities represents amount at which Financial Liability is
measured at initial recognition minus the principal repayments, plus or minus the cumulative
amortization using the effective interest method of any difference between the initial amount and
the maturity amount.

All the Financial Liabilities of the Company are subsequently measured at Amortized Cost using
the Effective Interest method.

De recognition of Financial Liabilities

A Financial Liability shall be derecognized when, and only when, it is extinguished i.e. when the
obligation specified in the contract is discharged or cancelled or expires.

1.6) Foreign Currency Transactions

The functional and presentation currency of the Company is Indian Rupee. Transactions in foreign
currency are accounted for at the exchange rate prevailing on the transaction date. Gains/ Losses
arising on settlement as also on translation of monetary items are recognised in the Statement of
Profit and Loss.

1.7) Borrowing Costs

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are
capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other Borrowing Costs are
recognized as an expense in the period in which they are incurred.

1.8) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured regardless of when the payment is made. The
specific recognition criteria described below must also be met before revenue is recognized.

a. Sale of Products

Revenue from the sale of Products is recognised when significant risks and rewards of ownership
have been transferred to the customer, the Company no longer retain continuing managerial
involvement to the degree usually associated with ownership nor has effective control over the
Products sold, which is mainly upon delivery, the amount of revenue can be measured reliably
and recovery of the consideration that will be derived in the sale of Products.

Revenue from Sale of Products excludes amounts collected on behalf of third parties i.e GST and
Sales tax. Sale of Products in respect of export sales are recognized as and when the shipment of
products has taken place.

b. Recognition of Export benefits

Export benefits entitlements in respect of Incentive Schemes including Duty Drawback,
Merchandise Export Incentive Scheme (MEIS), FMS and FPS of the Government of India are
recognized in the year in which Export Sales are accounted for.

c. Interest Income

Interest on deposits with Government Departments and Financial Institutions are recognized in
Statement of Profit and Loss when the right to receive/receivable during the period.

1.9) Dividend Distribution

Dividends paid (including income tax thereon) is recognized in the period in which the interim
dividends are approved by the Board of Directors, or in respect of the final dividend when
approved by shareholders.

1.10) Employee Benefits:

• Defined Contribution Plan

Employer’s Contribution to Provident Fund/Employee State Insurance which is in the nature of
defined Contribution Scheme is expensed off when the contributions to the respective funds are
due. There are no other obligations other than the contribution payable to the fund.

• Defined Benefit Plan

a. Gratuity

Gratuity liability is in the nature of defined benefit obligation. Such liability is provided only for
employees who have completed 5 years of continuous service as per the provisions of the
Payment of Gratuity Act, 1972.

b. Compensated absences

Compensated absences which are in the nature of defined benefit obligation are provided for
based on number of leaves outstanding as on Balance Sheet date according to the policy of the
Company.

---

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES AND KEY ACCOUNTING ESTIMATES AND JUDGEMENTS.

l.A Significant Accounting Policies:

1.1) Basis of Preparation of Financial Statements

a. Compliance with Ind AS

The Standalone Financial Statements comply in all material aspects with Indian Accounting

Standards (“Ind AS”) notified under Section 133 of the Companies Act, 2013 (''the Act”), and relevant rules issued thereunder and the relevant provisions of the Act. In accordance with proviso to Rule 4A of the Companies (Accounts) Rules, 2014, the terms used in these financial statements are in accordance with the definitions and other requirements specified in the applicable Accounting Standards.

b. Historical Cost Convention

These Ind AS Financial Statements have been prepared on a going concern basis using historical cost convention and on an accrual method of accounting, except for certain financial assets and Financial Liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied constantly over all the periods presented in these financial statements.

The Financial Statements are presented in INR which is also the Company’s functional currency, and all values are rounded to the nearest Lakhs (INR 00,000), except when otherwise indicated.

1.2) Use of Estimates

The preparation of Financial Statements in conformity with the Indian Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial statements and reported amount of income and expenses during the period. Actual figures may differ from these estimates. Any revision to the accounting estimates is recognized prospectively in current and future periods.

Key Assumptions

1.3) Plant and Equipment-Tangible Assets:

i. Plant and Equipment are stated at historical cost less accumulated depreciation. Cost directly attributable to acquisition are capitalized until the Plant and Equipment are ready to for use, as intended by the management.

ii. Subsequent expenditure relating to Plant and Equipment are capitalized only when it is probable that the future economic benefits associated with them will flow to the Company and the cost of the expenditure can be measured reliably. Repairs and Maintenance costs are recognized in the statement of Profit and Loss when they are incurred.

iii. Depreciation on Plant and Equipment has been provided under Straight Line Method over the useful life of assets estimated by the management which is in line with terms prescribed in Schedule II of the Companies Act-2013 except the assets costing Rs.5000 or less on which depreciation is charged @ 100% in the year of acquisition. Depreciation for assets purchased /sold during the period is proportionately charged. Depreciation methods, useful lives & residual values are reviewed periodically.

The management estimates the useful life of the assets as follows:

Plant and Equipment (Process) : 25years

Plant and Equipment (Others) : 15 years

Buildings (Factory Buildings) : 30 years

Buildings (other than Factory Buildings) : 60 years

iv. Transition to Ind AS: On transition to Ind AS, the Company has selected to continue with the carrying value of all of its Plant and Equipment recognised as at April 1, 2016 measured as per the previous GAAP and use that carrying values as deemed cost of the Plant and Equipment.

1.4) Inventory:

Inventories are valued at the lower of Cost or Net Realizable Value. The cost is determined on Weighted Average basis. Cost of finished goods and work-in-process include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition. Stores and Packing Materials are valued at cost on weighted average basis.

1.5) Financial Instruments:

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

A. Financial Assets:

Initial recognition and measurement

All financial instruments are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through Profit & Loss account transaction costs that are attributable to the acquisition of the financial asset, purchase or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place are recognized on the trade date i.e. the date that the Company commits to purchase or sell the asset.

Subsequent Measurement

For the purpose of subsequent measurement, financial assets are classified and measured at:

i. Amortized Cost

ii. Fair Value Through Profit and Loss (FVTPL)

iii. Fair Value Through Other Comprehensive Income (FVTOCI)

Financial Asset measured at Amortized Cost

Financial Assets held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are measured at amortized cost using effective interest rate (EIR) method. The EIR amortization is recognized as finance income in the Statement of Profit & Loss.

The Company, while applying above criteria has classified all the financial assets (except investments in equity shares) at Amortized Cost.

Financial Assets at Fair Value Through Profit and Loss (FVTPL)

Financial Assets are measured at fair value through Profit & Loss if it does not meet the criteria for classification as measured at Amortized Cost or at FVTOCI. All fair value changes are recognized in the Statement of Profit & Loss.

Financial Assets Measured at Fair Value Through Other Comprehensive Income

Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at Fair Value Through Other Comprehensive Income. Fair value movements are recognized in the Other Comprehensive Income (OCI). Interest income measured using the EIR method and impairment Losses, if any are recognized in the Statement of Profit and Loss. On de-recognition, cumulative gain or Loss previously recognized in OCI is reclassified from the equity to other income in the Statement of Profit and Loss.

De-recognition of Financial Assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the contractual rights to receive the cash flows from the asset.

Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment Loss on the debt instruments, that are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance. Expected Credit Loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive.

The management uses a provision matrix to determine the impairment Loss on the portfolio of trade and other receivables. The provision matrix is based on its historically observed Expected Credit Loss rates over the expected life of the trade receivables and is adjusted for forward-looking estimates.

Expected Credit Loss allowance or reversal recognized during the period is recognized as income or expense, as the case may be, in the Statement of Profit and Loss. In case of Balance Sheet, it is shown as reduction from the specific financial asset.

B. Financial Liabilities.

Initial Recognition and Measurement

Financial Liabilities are recognized initially at fair value plus any transaction cost that are attributable to the acquisition of the financial liability except Financial Liabilities at FVTPL that are measured at fair value.

Subsequent Measurement

Financial Liabilities are subsequently measured at amortized cost using the EIR method. Financial Liabilities carried at Fair Value Through Profit and Loss. Gain or Losses on

liabilities held for trading are recognized in the Statement of Profit and Loss.

The Company does not designate any Financial Liability at Fair Value Through Profit and Loss.

Financial Liabilities at Amortized cost

Amortized cost for Financial Liabilities represents amount at which Financial Liability is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount.

All the Financial Liabilities of the Company are subsequently measured at Amortized Cost using the Effective Interest method.

De recognition of Financial Liabilities

A Financial Liability shall be derecognized when, and only when, it is extinguished i.e. when the obligation specified in the contract is discharged or cancelled or expires.

1.6) Foreign Currency Transactions

The functional and presentation currency of the Company is Indian Rupee. Transactions in foreign currency are accounted for at the exchange rate prevailing on the transaction date. Gains/ Losses arising on settlement as also on translation of monetary items are recognised in the Statement of Profit and Loss.

1.7) Borrowing Costs

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other Borrowing Costs are recognized as an expense in the period in which they are incurred.

1.8) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured regardless of when the payment is made. The specific recognition criteria described below must also be met before revenue is recognized.

a. Sale of Products

Revenue from the sale of Products is recognised when significant risks and rewards of ownership have been transferred to the customer, the Company no longer retain continuing managerial involvement to the degree usually associated with ownership nor has effective control over the Products sold, which is mainly upon delivery, the amount of revenue can be measured reliably and recovery of the consideration that will be derived in the sale of Products.

Revenue from Sale of Products includes excise and other duties which the Company pays as a principal but excludes amounts collected on behalf of third parties i.e GST and Sales tax.

Sale of Products in respect of export sales are recognized as and when the shipment of products has taken place.

b. Recognition of Export benefits

Export benefits entitlements in respect of Incentive Schemes including Duty Drawback, Merchandise Export Incentive Scheme (MEIS), FMS and FPS of the Government of India are recognized in the year in which Export Sales are accounted for.

c. Interest Income

Interest on deposits with Government Departments and Financial Institutions are recognized in Statement of Profit and Loss when the right to receive/receivable during the period.

1.9) Dividend Distribution

Dividends paid (including income tax thereon) is recognized in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by shareholders.

1.10) Employee Benefits:

• Defined Contribution Plan

Employer’s Contribution to Provident Fund/Employee State Insurance which is in the nature of defined Contribution Scheme is expensed off when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the fund.

• Defined Benefit Plan

a. Gratuity

Gratuity liability is in the nature of defined benefit obligation. Such liability is provided only for employees who have completed 5 years of continuous service as per the provisions of the Payment of Gratuity Act, 1972.

b. Compensated absences

Compensated absences which are in the nature of defined benefit obligation are provided for based on number of leaves outstanding as on Balance Sheet date according to the policy of the Company.

---

Mar 31, 2015

2.1. SYSTEM OF ACCOUNTING:

The company generally follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

2.2. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition inclusive of foreign exchange fluctuation, inland freight, duties and taxes and incidental expenses related to acquisition.

2.3. DEPRECIATION:

During the year, depreciation is provided on Straight Line Method and at the useful life and in the manner specified in Schedule II to the Companies Act, 2013.

2.4. SALES:

Gross sales are stated net of Sales Tax and inclusive of Excise duty.

2.5. EMPLOYEE BENEFITS:

Contribution to provident fund is remitted to the Provident Fund Commissioner and such paid/payable amounts are charged against revenue. Group Gratuity Scheme is administrated through Trustees for which policies are taken from LIC of India. The above payments/ provisions are charged to revenue. The liabilities towards such schemes are determined by an independent actuarial valuation as per the requirements of Accounting Standard-15.(Revised 2005) on "Employee Benefits". Encashment of leave is accounted for on accrual basis.

2.6. INVENTORIES:

Inventories are valued at lower of cost or net realizable value. The cost is calculated on weighted average method. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity.

2.7. INVESTMENTS:

Long term investments are stated at cost. Any decline in the value of long term investment is recognized by providing for such diminution in the value of investments, unless the reduction is of temporary in nature.

2.8. RECOGNITION OF INCOME:

Advance Licenses and Import Entitlements received against exports made by the company are accounted in the books on accrual basis.

2.9. FOREIGN EXCHANGE TRANSACTIONS:

Foreign currency transactions are accounted at the exchange rates ruling on the date of transactions. The net gain/loss arising on revenue account during the year in respect of foreign exchange transaction is reckoned in the Profit and Loss Account.

2.10. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of long lead time capital assets are capitalized as a part of cost of the asset. All other borrowing costs are charged to revenue.

2.11. DEFERRED TAXATION:

Deferred tax, being tax on timing difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years, has been recognized. Deferred tax assets, arising from temporary timing differences and out of unabsorbed loss or depreciation are recognized to the extent that there is reasonable certainty that the assets can be realized in future.

2.12. RESEARCH AND DEVELOPMENT:

i. Revenue expenditure is charged to Profit & Loss Account.

ii. Capital expenditure is shown as addition to fixed assets under natural heads.

2.13. CONTINGENT LIABILITIES:

Contingent liabilities not provided for are indicated by way of a Note and will be provided/ paid on crystallization.

---

Mar 31, 2014

01. SYSTEM OF ACCOUNTING:

The company generally follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

02. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition inclusive of foreign exchange fluctuation, inland freight, duties and taxes and incidental expenses related to acquisition.

03. DEPRECIATION:

Depreciation on the Assets of the company is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956.

04. SALES:

Gross sales are stated net of Sales Tax and inclusive of Excise duty.

05. EMPLOYEE BENEFITS:

Contribution to provident fund is remitted to the Provident Fund Commissioner and such paid/payable amounts are charged against revenue.

Group Gratuity Scheme is administrated through Trustees for which policies are taken from LIC of India. The above payments/ provisions are charged to revenue. The liabilities towards such schemes are determined by an independent actuarial valuation as per the requirements of Accounting Standard-15.(Revised 2005) on "Employee Benefits". Encashment of leave is accounted for on accrual basis.

06. INVENTORIES:

Inventories are valued at lower of cost or net realizable value. The cost is calculated on weighted average method. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity.

07. INVESTMENTS:

Long term investments are stated at cost. Any decline in the value of long term investment is recognized by providing for such diminution in the value of investments, unless the reduction is of temporary in nature.

08. RECOGNITION OF INCOME:

Advance Licenses and Import Entitlements received against exports made by the company are accounted in the books on accrual basis.

09. FOREIGN EXCHANGE TRANSACTIONS:

Foreign currency transactions are accounted at the exchange rates ruling on the date of transactions. The net gain/loss arising on revenue account during the year in respect of foreign exchange transaction is reckoned in the Profit and Loss Account.

10. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of long lead time capital assets are capitalized as a part of cost of the asset. All other borrowing costs are charged to revenue.

11. DEFERRED TAXATION:

Deferred tax, being tax on timing difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years, has been recognized. Deferred tax assets, arising from temporary timing differences and out of unabsorbed loss or depreciation are recognized to the extent that there is reasonable certainty that the assets can be realized in future.

12. RESEARCH AND DEVELOPMENT:

i. Revenue expenditure is charged to Profit & Loss Account.

ii. Capital expenditure is shown as addition to fixed assets under natural heads.

13. CONTINGENT LIABILITIES:

Contingent liabilities not provided for are indicated by way of a Note and will be provided/ paid on crystallization.

---

Mar 31, 2013

01. SYSTEM OF ACCOUNTING:

The company generally follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

02. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition inclusive of foreign exchange fluctuation, inland freight, duties and taxes and incidental expenses related to acquisition.

03. DEPRECIATION:

Depreciation on the Assets of the company is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956.

04. SALES:

Gross sales are stated net of Sales Tax and inclusive of Excise duty.

05. EMPLOYEE BENEFITS:

Contribution to provident fund is remitted to the Provident Fund Commissioner and such paid/payable amounts are charged against revenue.

Group Gratuity Scheme is administrated through Trustees for which policies are taken from LIC of India. The above payments/ provisions are charged to revenue. The liabilities towards such schemes are determined by an independent actuarial

valuation as per the requirements of Accounting Standard-15.(Revised 2005) on "Employee Benefits".

Encashment of leave is accounted for on accrual basis.

06. INVENTORIES:

Inventories are valued at lower of cost or net realizable value. The cost is calculated on weighted average method. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity.

07. INVESTMENTS:

Long term investments are stated at cost. Any decline in the value of long term investment is recognized by providing for such diminution in the value of investments, unless the reduction is of temporary in nature.

08. RECOGNITION OF INCOME:

Advance Licenses and Import Entitlements received against exports made by the company are accounted in the books on accrual basis.

10. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of long lead time capital assets are capitalized as a part of cost of the asset. All other borrowing costs are charged to revenue.

11. DEFERRED TAXATION:

Deferred tax, being tax on timing difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years, has been recognized. Deferred tax assets, arising from temporary timing differences and out of unabsorbed loss or depreciation are recognized to the extent that there is reasonable certainty that the assets can be realized in future.

12. RESEARCH AND DEVELOPMENT:

i. Revenue expenditure is charged to Profit & Loss Account.

ii. Capital expenditure is shown as addition to fixed assets under natural heads.

13. CONTINGENT LIABILITIES:

Contingent liabilities not provided for are indicated by way of a Note and will be provided/ paid on crystallization.

---

Mar 31, 2010

1. SYSTEM OF ACCOUNTING:

The Company generally follows mercantile system of accounting and recognizes income and expenditure on accrual basis.

2. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition inclusive of foreign exchange fluctuation, inland freight, duties and taxes and incidental expenses related to acquisition.

3. DEPRECIATION:

Depreciation on the Assets of the Company is provided on Straight Line Method as per Schedule XIV to the Companies Act, 1956.

4. SALES:

Gross sales are stated net of Sales Tax and inclusive of Excise duty.

5. EMPLOYEE BENEFITS:

Contribution to provident fund is remitted to the Provident Fund Commissioner and such paid/payable amounts are charged against revenue.

Group Gratuity Scheme is administrated through Trustees for which policies are taken from LIC of India. The above payments/ provisions are charged to revenue. The liabilities towards such schemes are determined by an independent actuarial valuation as per the requirements of Accounting Standard-15.(Revised 2005) on " Employee Benefits".

Encashment of leave is accounted for on accrual basis.

6. INVENTORIES:

Inventories are valued at lower of cost or net realizable value. The cost is calculated on weighted average method. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity.

7. INVESTMENTS:

Long term investments are stated at cost. Any decline in the value of long term investment is recognized by providing for such diminution in the value of investments, unless the reduction is of temporary in nature.

8. RECOGNITION OF INCOME:

Advance Licenses and Import Entitlements received against exports made by the Company are accounted in the books on accrual basis.

9. FOREIGN EXCHANGE TRANSACTIONS:

Foreign currency transactions are accounted at the exchange rates ruling on the date of transactions. The net gain/loss arising on revenue account during the year in respect of foreign exchange transaction is reckoned in the Profit and Loss Account.

10. BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of long lead time capital assets are capitalized as a part of cost of the asset. All other borrowing costs are charged to revenue.

11. DEFERRED TAXATION:

Deferred tax, being tax on timing difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years, has been recognized. Deferred tax assets, arising from temporary timing differences and out of unabsorbed loss or depreciation are recognized to the extent that there is reasonable certainty that the assets can be realized in future.

12. RESEARCH AND DEVELOPMENT:

i) Revenue expenditure is charged to Profit & Loss Account.

ii) Capital expenditure is shown as addition to fixed assets under natural heads.

13. CONTINGENT LIABILITIES:

Contingent liabilities not provided for are indicated by way of a Note and will be provided/ paid on crystallization.