Accounting Policies of Santosh Fine - Fab Ltd. Company

Mar 31, 2024

3. Significant Accounting Policies

3.1 Property, Plant & Equipment:

Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost
less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can
be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when
replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are
incurred.

Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their
estimated useful lives

The assets’ residual values, useful lives and method of depreciation are reviewed at each financial year end and are
adjusted prospectively, if appropriate.

3.2 Intangible Assets:

Intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any Cost
includes expenditure that is directly attributable to the acquisition of the intangible assets.

Identifiable intangible assets are recognised when it is probable that future economic benefits attributed to the asset will
flow to the Company and the cost of the asset can be reliably measured.

Computer software are capitalized at the amount paid to acquire the respective license for use and are amortized over
period of useful lives. The assets useful lives are reviewed at each financial year end.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is
derecognized.

3.3 Capital Work-In-Progress:

Capital work-in-progress/intangible assets under development are carried at cost, comprising direct cost, related
incidental expenses and attributable borrowing cost.

3.4 Employee Benefits:

Short term employee benefits are recognised as an expense in the statement of profit and loss of the year in which the
related services are rendered.

Post employment and other long term employee benefits are charged off in the year in which the employee has rendered
services. The amount charged off is recognized at the present value of the amounts payable determined using actuarial
valuation techniques based on Projected Unit Credit Method. Actuarial gain/losses in respect of post employment and
other long term benefits are charged to Other Comprehensive Income (Net of Tax).

Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are charged
to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

3.5 Foreign Currency Transaction:

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the date of the
transaction.

ii. Monetary Items denominated in foreign currencies at the year end are restated at year end rates. In case of those items,
which are covered by forward exchange contracts, the difference between the year end rate and spot rate on the date of
the contract is recognized as exchange difference and transferred to dollar hedge account account as on the date of
Balance Sheet and the premium paid on forward contracts has been recognized over the life of the contract.

iii. All other exchange difference are dealt with in the profit & loss account.

3.6 Investments:

Long term investments are stated at cost. Provision for diminution in the value of long-term investment is made only if
such decline is other than temporary in the opinion of the management. The carrying amount for current investments
recognized in Financial Statements is the lower of cost and fair value. Any reduction to fair value and any reversals of
such reductions, in case of these Current Investments, are included in the profit and loss statement.

3.7 Inventories:

Inventories are valued at lower of cost and net realisable value. Cost includes all charges incurred for bringing the goods
to their present location and condition, including octroi and other levies, transit insurance and receiving charges. Work-
in-progress and finished goods include appropriate proportion of overheads and, where applicable. Net realisable value
is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated
costs necessary to make the sale.

3.8 Revenue from Contract with Customers:

Revenue from contract with customers is recognised when control of the goods or services are transferred to the
customers at an amount that reflects the consideration at 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 or services before transferring them to the customers.

Sale of Goods:

Revenue from sale of goods is recognised at the point in time when control of the goods has been transferred to the
customer, generally on delivery of the goods and there is no unfulfilled obligation that could affect the customer’s
acceptance of the goods. The company considers whether there are other promises in the contract that are separate
performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction
price for the sale of goods, the company considers the effects of variable consideration, and consideration payable to the
customers (if any). Sales are recorded net of duties and taxes adjusted for discount and after deducting returns, discounts
and claims.

Export Incentive

Export incentives under various schemes notified by government are accounted for in the year of exports based on
eligibility and when there is no uncertainty in receiving the same.

i) . Benefit on account of entitlement to Import duty free materials under the Scheme is recognized as and when right to
receive are established as per the terms of the scheme.

ii) . The Benefit in respect of Duty Drawback is recognised at the time of exports.

Dividend Income

Dividend income from investments is recognised when the Company’s right to receive is established which generally
occurs when the shareholders approve the dividend.

Interest Income

Interest income is included in other income in the statement of profit or loss. Interest Income mainly include trading
interest which is recognised on receipt basis.

3.9 GST paid on acquisition of assets or on incurring expenses:

Expenses and assets are recognised net of the amount of GST paid, except:

• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority (Ineligible input
credit) , in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense
item, as applicable.

• When receivables and payables are stated with the amount of tax included.

•The net amount of tax recoverable from, or payable to, the taxation authority is included as part of "Other Current
Assets" or Other Current Liabilities , as the case may be,in the balance sheet.

3.10 Taxation:

Tax expense recognized in Statement of Profit and Loss comprises the sum of deferred tax and current tax except to the
extent it recognized in other comprehensive income or directly in equity.

Current tax comprises the tax payable or receivable on taxable income or loss for the year and any adjustment to the tax
payable or receivable in respect of previous years. Current tax is computed in accordance with relevant tax regulations.
The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received
after considering uncertainty related to income taxes, if any. Current income tax relating to items recognised outside
profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity).

Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts,
and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

Deferred tax is recognised in respect of temporary differences between carrying amount of assets and liabilities for
financial reporting purposes and corresponding amount used for taxation purposes. Deferred tax assets are recognised on
unused tax loss, unused tax credits and deductible temporary differences to the extent it is probable that the future taxable
profits will be available against which they can be used. This is assessed based on the Company’s forecast of future
operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused
tax loss. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in
which the Company expects, at the reporting date to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognised amounts,
and it is intended to realise the asset and settle the liability on a net basis or simultaneously. Deferred tax relating to items
recognised outside statement of profit and loss is recognised outside statement of profit or loss (either in other
comprehensive income or in equity).

Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively.

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Mar 31, 2014

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared as a going concern basis under historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

B. USE OF ESTIMATE

The preparation of financial statements in conformity with the generally accepted accounting principles 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 reporting period. Difference between the actual result and estimates are recognised in the period in which the results are known/ materialized.

C. FIXED ASSETS

Fixed assets are stated at cost of acquisition or construction, net of cenvat/Value added Tax, less accumulated depreciation and impairment loss, if any. All costs, including finance cost till commencement of commercial production & net charges on forward exchange contracts attributable to the fixed assets are capitalised.

D. INTANGIBLE ASSETS

i. Intangible assets are stated at cost of acquisition less accumulated amortization.

ii. As per Accounting Standard-26 "Intangible Assets", expenditure from which no future economic benefits can be derived are recognised as an expense, like expenditure on start-up activities, unless this expenditure is included in the cost of an item of Fixed Assets under AS-10. Start up costs may consists of Preliminary Expenses incurred in establishing a legal entity such as legal and secretarial costs, etc.

E. CAPITALWORK-IN-PROGRESS

All expenses including direct and indirect expenses that arc exclusively being incurred for the proposed project, except as mentioned in AS-26 but otherwise required by AS-10, are being accumulated and will be attributable to the proposed acquisition / construction of fixed assets to make it reach in its working condition for its intended use, including depreciation, enabling ultimate allocation to different assets on a reasonable basis.

F. DEPRECIATION

i. Depreciation is provided on straight line method at the rates and in the manner prescribed in Schedule XIV, of the Companies Act, 1956.

ii. Depreciation on addition / deletion during the year has been provided on prorate basis to the date of addition/deletion.

iii. No depreciation has been charged on Lease- hold land.

G. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the profit & 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.

H. INVESTMENTS

Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in the opinion of the management. The carrying amount for current investments recognized in Financial Statements is the lower of cost and fair value. Any reduction to fair value and any reversals of such reductions, in case of these Current Investments, are included in the profit and loss statement.

I. TRANSACTION IN FOREIGN CURRENCY

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the date of the transaction.

ii. Monetary Items denominated in foreign currencies at the year end are restated at year end rates. In case of those items, which are covered by forward exchange contracts, the difference between the year end rate and spot rate on the date of the contract is recognized as exchange difference and transferred to dollar hedge account as on to date of Balance Sheet and the premium paid on forward contracts has been recognized over the life of the contract.

iii. All other exchange difference are dealt with in the profit & loss account.

J. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, service tax, excise duty and sales during trial run period, adjusted for discount (net).Sales are recorded net of vat and excise duty, after deducting returns, discount & claim.

K. EXPORT INCENTIVES

i. Benefit on account of entitlement to Import duty free materials under the "Duty Exemption pass book Scheme/Focus Market Scheme/Focus Product scheme" is recognized as and when right to receive are established as per the terms of the scheme.

ii. The Benefits in respect of Advance Licence received by the Company against the Export made by it are recognized as and when goods are imported against them.

iii. The Benefit in respect of Duty Drawback is recoginsed at the time of exports.

L. INVENTORIES

Inventories are valued at lower of cost and net realisable value. Work in process and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

M. EMPLOYEE BENEFITS

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognised in the period in which the employee renders the related service. Long Term Defined Contributions are accounted for on the basis of contributions made during the year, whereas Long Term Defined Benefits are accounted on the basis of as and when it is paid.

N. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

O. PROVISION, 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 event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2013

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared as a going concern basis under historical cost convention, in accordance with (he Company accept accounting Pencil and the provisions of the Companies Act, 1956 as adopted consistently by the

B. USE OF ESTIMATE

The preparation of financial statements in conformity with the generally accepted accounting principles 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 reporting period Difference between the actual result and estimates are recognized in the period in which the results are known materialized.

C. FIXEDASSETS

Fixed assets are stated at cost of acquisition or construction, net of convert/Value added Tax, less accumulated depreciation and impairment loss, if any. All costs, including finance cost till commencement of commercial production & net charges on toward exchange contracts attributable to the Fixed assets are capitalized.

I). INTANGIBLE ASSETS

i. Intangible assets are stated at cost of acquisition less accumulated amortization.

ii. As per Accounting Standard-26 "Intangible Assets''*, expenditure from which no future economic benefits can be derived are recognized as an expense, like expenditure on start-up activities, unless this expenditure is included in the cost of an it e m

E. CAPITALWORK-IN-PROGRESS

All expenses including direct and indirect expenses that are exclusively being incurred for proposed project except us the proposed acquisition/construction of fixed accumulated and will be attributable to the proposed ninth h- 0 fix. classless 10 rack " reach "s working condition for its intended use. including depreciation cabling ultimately location to different assets on reasonable basis.

F. DEPRECIATION

i. Depreciation is provided on straight line method at the rules and in the manner prescribed in Schedule XIV. of the t companies Acts 06.

ii Depreciation on addition/ deletion during the year has been provided on prorate basis to the date of addition/ deletion.

iii. No depreciation has been charged on Lease- hold land.

G. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the profit & loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting pentodes is reversed it there has been a change in the estimate of recoverable amount.

H. INVESTMENTS

Long term investments are stated at cost provision for diminution in the value of long term investment is made only if such opinion to the management. The carrying amount for current investments recognized in Financial Statements is the lower of cost and fair value. Any reduction to fair value and any reversals of such reductions, in ease of these C arrant Investments, are included in the profit and loss statement

I. TRANSACTION IN FOREIGN CURRENCY

Transaction denominated in forcing currencies are normalcy "corded at the exchange role prevailing at I he date of the currencies a'' ''the year end are restated at year end rates. In case of those items "''f art towered by exchange contracts, the difference between the yearend role and spot role on the date of the as exchange difference and transferred lo dollar hedge account as on to date of Balance Sheet and the premium prude on forward contracts has been recognized over the life of the contract 111. All other exchange difference arc dealt with in the profit & loss account

J. REVENUE RECOGNITION A

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, service tax. excise duty and sales during trial run period, adjusted for discount (net).Sales arc recorded net of vat and excise duty, after deducting returns, discount & claim.

K. EXPORT INCENTIVES

i. Benefit on account of entitlement to Import duty free materials under the "Duty Exemption pass book Scheme/Focus Market Scheme/Focus Product scheme" is recognized as and when right to receive are established as per the terms of the scheme.

ii. The Benefits in respect of Advance Licensee received by the Company against the Export made by it arc recognized as and when goods are imported against them.

in. The Benefit in respect of Duty Drawback is recognized at the lime of exports.

L. INVENTORIES

Inventories arc valued at lower of cost and net realizable value. Work in process and finished goods include appropriate proportion of overheads and. where applicable, excise duty.

M. EMPLOYEE BENEFITS

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognized in the period in which the employee renders the related service. Long Term Defined Contributions are accounted for on the basis of contributions made during the year, whereas Long Term Defined Benefits arc accounted on the basis of as and when it is paid.

N. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act. 1%1. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are connected or substantively enacted as on the balance sheet date. Deferred lax tassel is recognized and carried forward only us the Cxienf that there is a virtual certainty that the asset will be realized in future.

O. PROVISION, CONTINGENT LIABILITIES ANO CONTINGENT ASSETS

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

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Mar 31, 2012

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

Financial statements have been prepared as a going concern basis under historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company.

B. USE OF ESTIMATE

The preparation of financial statements in conformity with the generally accepted accounting principles 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 reporting period. Difference between the actual result and estimates are recognised in the period in which the results are known/ materialized.

C. FIXED ASSETS ,

Fixed assets are stated at cost of acquisition or construction, net of cenvat/Value added Tax, less accumulated depreciation and impairment loss, if any. All costs, including finance cost till commencement of commercial production & net charg& on forward exchange contracts attributable to the fixed assets are capitalised.

D. INTANGIBLE ASSETS

i. Intangible assets are stated at cost of acquisition less accumulated amortization. Computer Software is amortized over a period of five years.

ii. As per Accounting Standard-26 "Intangible Assets", expenditure from which no future economic benefits can be derived are recognised as an expense, like expenditure on start-up activities, unless this expenditure is included in the cost of an item of Fixed Assets under AS-10. Start up costs may consists of Preliminary Expenses incurred in establishing a legal entity such as legal and secretarial costs, etc.

E. CAPITAL WORK-IN-PROGRESS

All expenses including direct and indirect expenses that are exclusively being incurred for the proposed project, except as mentioned in AS-26 but otherwise required by AS-10, are being accumulated and will be attributable to the proposed acquisition / construction of fixed assets to make it reach in its working condition for its intended use, including depreciation, enabling ultimate allocation to different assets on a reasonable basis.

F. DEPRECIATION

i. Depreciation is provided on straight line method at the rates and in the manner prescribed in Schedule XIV, of the Companies Act, 1956.

ii. Depreciation on addition / deletion during the year has been provided on prorate basis to the date of addition/deletion.

iii. No depreciation has been charged on Lease- hold land.

G. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the profit & 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.

H. INVESTMENTS

Long term investments are stated at cost. Provision for diminution in the value of long term investment is made only if such decline is other than temporary in the opinion of the management. The carrying amount for current investments recognized in Financial Statements is the lower of cost and fair value. Any reduction to fair value and any reversals of such reductions, in case of these Current Investments, are included in the profit and loss statement.

I. TRANSACTION IN FOREIGN CURRENCY

i. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the date of the transaction.

ii. Monetary Items denominated in foreign currencies at the year end are restated at year end rates. In case of those items, which are covered by forward exchange contracts, the difference between the year end rate and spot rate on the date of the contract is recognized as exchange difference in the profit and loss account and the premium paid on forward contracts has been recognized over the life of the contract.

iii. All other exchange difference are dealt with in the profit & loss account.

J. REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, service tax, excise duty and sales during trial run period, adjusted for discount (net), Value Added Tax (VAT) and gain / loss on corresponding hedge contracts. Sales are recorded net of vat and excise duty, after deducting returns, discount & claim.

K. EXPORT INCENTIVES

i. Benefit on account of entitlement to Import duty free materials under the "Duty Exemption pass book Scheme/Focus Market Scheme/Focus Product scheme" is recognized as and when right to receive are established as per the terms of the scheme.

ii. The Benefits in respect of Advance Licence received by the Company against the Export made by it are recognized as and when goods are imported against them.

iii. The Benefit in respect of Duty Drawback is recoginsed at the time of exports.

L. INVENTORIES '

Inventories are valued at lower of cost and net realisable value. Work in process and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

M. EMPLOYEE BENEFITS

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognised in the period in which the employee renders the related service. Long Term Defined Contributions are accounted for on the basis of contributions made during the year, whereas Long Term Defined Benefits are accounted on the basis of as and when it is paid.

N. PROVISION FOR CURRENT AND DEFERRED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961 Deferred tax will be provided at the end of year, if any.

O. PROVISION, 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 event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2011

A. BASIS OF PREPERATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles & the provisions of the Companies Act, 1956, as adopted consistently by the company.

The company generally follows mercantile system of accounting and recognizes significant items of Income & Expenditure on an accrual basis. The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimated are recognized in the period in which the results are known/materialized.

B. FIXED ASSETS

Fixed assets are recorded at the cost of acquisition/construction (net of Vat/ Cenvat availed) and all direct expenses up to date of production, less accumulated depreciation.

C. DEPRECIATION

Depreciation has been provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956. Depreciation on addition/deletion during the year has been provided on prorata basis to the date of addition/deletion. No depreciation has been charged on Lease- hold land.

D. INVESTMENT

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

E. INVENTORIES

Inventories are valued as per below given basis:

A. Raw material: - Lower of cost or market value.

B. Stock in process: -At estimated cost.

C. Finish stock: - Lower of cost or net realisable value.

F. SALES & PURCHASE

Sales are recorded net of vat and excise duty, after deducting returns, discounts & claim. Purchases are recorded net of Value Added Tax and Cenvat availed.

G. EMPLOYEE RETIREMENT BENEFITS

Gratuity is being accounted on cash basis as & when paid. Company's contribution to provident fund and leave encashment are charged to profit & loss account on accrual basis.

H. CONTINGENT LIABILITIES

Contingent liabilities are not provided for and are disclosed separately by way of notes.

I. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign exchange, not covered by forward contracts, are accounted at the exchange rates prevailing on the date of the transaction. Gains or losses arising out of subsequent fluctuations are accounted for on actual payment/ realization. Amount outstanding on the year end are accounted for exchange gain /loss at rate prevailing on the year end.

J. EXPORT INCENTIVES

Export Incentives have been accounted on accrual basis on exception of claim receivable, any amount & difference between actual amounts received & provision/claimed not accepted has been recorded in the year of actual realization/materialized.

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Mar 31, 2010

A. BASIS OF PREPERATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles & the provisions of the Companies Act, 1956, as adopted consistently by the company.

The company generally follows mercantile system of accounting and recognizes significant items of Income & Expenditure on an accrual basis. The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimated are recognized in the period in which the results are known/materialized.

B. FIXED ASSETS

Fixed assets are recorded at the cost of acquisition/construction (net of Vat/ Cenvat availed) and all direct expenses up to date of production, less accumulated depreciation.

C. DEPRECIATION

Depreciation has been provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956. Depreciation on addition/deletion during the year has been provided on prorata basis to the date of addition/deletion. No depreciation has been charged on Lease- hold land.

D. INVESTMENT

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

E. INVENTORIES

Inventories are valued as per below given basis:

A. Raw material: - Lower of cost or market value.

B. Stock in process: -At estimated cost.

C. Finish stock: - Lower of cost or net realisable value.

F. SALES & PURCHASE

Sales are recorded net of vat and excise duty, after deducting returns, discounts & claim. Purchases are recorded net of Value Added Tax and Cenvat availed.

G. EMPLOYEE RETIREMENT BENEFITS

Gratuity is being accounted on cash basis as & when paid. Companys contribution to provident fund and leave encashment are charged to profit & loss account on accrual basis.

H. CONTINGENT LIABILITIES

Contingent liabilities are not provided for and are disclosed separately by way of notes.

I. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign exchange, not covered by forward contracts, are accounted at the exchange rates prevailing on the date of the transaction. Gains or losses arising out of subsequent fluctuations are accounted for on actual payment/ realization. Amount outstanding on the year end are accounted for exchange gain /loss at rate prevailing on the year end.

J. EXPORT INCENTIVES

Export Incentives have been accounted on accrual basis on exception of claim receivable, any amount & difference between actual amounts received & provision/claimed not accepted has been recorded in the year of actual realization/materialized.