Accounting Policies of Shah Foods Ltd. Company

Mar 31, 2025

CORPORATE INFORMATION:

SHAH FOODS LIMITED (''the company") is engaged in Trading of shares and securities and
was engaged in manufacturing of Biscuits for Britannia Industries Limited till F.Y 19-20. The
company is now engaged in Business Wholesale trading of Fruits and vegetables.

STATEMENT OF COMPLIANCE:

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) [Companies
(Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

1.1 Basis of preparation and presentation

These financial statements are in accordance with Indian Accounting Standards (IND AS)
under the historical cost convention on the accrual basis accept for certain financial
instruments which are measured at fair values, the provision of the Companies Act,2013
("the Act") (to the extent notify) and guidelines issued by the Securities & Exchange Board
of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of
Companies (Indian Accounting Standard) Rules, 2015 and relevant rules issued thereafter.

Accounting policies have been consistently applied except where newly issued accounting
standards are initially adopted or a revision to an existing standard requires a change in the
accounting policy hitherto in used.

As the quarter and year figures are taken from the source and rounded to the nearest digit,
the figures reported for the previous quarters might not always adopt to the year-end
figures reported in these statements.

1.2 Functional and presentation currency

The financial statements are presented in Indian Rupees, the currency of the primary
economic environment in which the Company operates.

1.3 Use of Estimates

The preparation of financial statements are in conformity with the recognition and
measurement principles of Ind AS which requires management to make critical judgments,
estimates and assumptions that affect the reporting of assets, liabilities, income and
expenditure.

Estimates and underlying assumptions are reviewed on an ongoing basis and any revisions
to the estimates are recognised in the period in which the estimates are revised and future
periods are affected.

Key source of estimation of uncertainty at the date of financial statements, which may cause
material adjustment to the carrying amount of assets and liabilities within the next financial
year, is in respect of:

• Useful lives of property, plant and equipment (refer note no. 2.1)

• Valuation of deferred tax assets (refer note no. 2.8)

• Valuation of inventories (refer note no. 2.3)

• Provisions & contingent liabilities (refer note no. 2.6)

2. SIGNIFICANT ACCOUNTING POLICIES

2.1. Property, plant and equipment

Property, plant and equipment are stated at cost of acquisition or construction less
accumulated depreciation and any accumulated impairment losses. The cost of fixed assets
comprises of its purchase price, non-refundable taxes & levies, freight and other incidental
expenses related to the acquisition and installation of the respective assets. Borrowing cost
attributable to financing of acquisition or construction of the qualifying fixed assets is
capitalized to respective assets when the time taken to put the assets to use is substantial.
When major items of property, plant and equipment have different useful lives, they are
accounted for as separate items of property, plant and equipment. The cost of replacement
of any property, plant and equipment is recognized in the carrying amount of the item if it is
probable that the future economic benefit associated with the item will flow to the Company
and its cost can be measured reliably.

The Estimated Useful Lives of assets are in accordance with the Schedule II of the
Companies Act, 2013.

The company has decided to sell its factory land, factory building and plant & machineries
in 2019-20 for which share holder consent/approval was obtained in the general meeting.
Factory Building was demolished and Plant and Machinery were disposed off later.

The Factory Land & Borewell were since then classified as "Assets Held for Sale" under the
"Current Assets" head

2.2. Financial Instruments

2.2.1. Cash and cash equivalents

Cash and cash equivalents consists of cash on hand, short demand deposits and highly
liquid investments, that are readily convertible into known amounts of cash and which are
subject to an insignificant risk of change in value. Short term means investments with
original maturities / holding period of three months or less from the date of investments.
Bank overdrafts that are repayable on demand and form an integral part of the Company''s
cash management are included as a component of cash and cash equivalent for the purpose
of statement of cash flow.

2.2.2. Trade Receivables

Trade receivables are amounts due from customers for sale of goods or services performed
in the ordinary course of business. Trade receivables are initially recognized at its

transaction price which is considered to be its fair value and are classified as current assets
as it is expected to be received within the normal operating cycle of the business.

2.2.3. Borrowings

Borrowings are initially recorded at fair value and subsequently measured at amortized
costs using effective interest method. Transaction costs are charged to statement of profit
and loss as financial expenses over the term of borrowing.

2.2.4. Trade payables

Trade payables are amounts due to vendors for purchase of goods or services acquired in
the ordinary course of business and are classified as current liabilities to the extent it is
expected to be paid within the normal operating cycle of the business.

2.2.5. Other financial assets and liabilities

Other non-derivative financial instruments are initially recognized at fair value and
subsequently measured at amortized costs using the effective interest method.

2.3. Inventories

Items of inventories are measured at lower of cost and net realisable value after providing
for obsolescence, if any except inventory of shares and securities held for trading are valued
at fair value through P&L. Cost of inventories comprises of cost of purchase, cost of
conversion and other costs including manufacturing overheads incurred in bringing them to
their respective present location and condition. Cost of raw materials, process, stores and
spares, packing materials, trading and other products are determined on weighted average
basis.

2.4. Impairment of Assets
Financial assets

At each balance sheet date, the Company assesses whether a financial asset is to be
impaired. Ind AS 109 requires expected credit losses to be measured through loss allowance.
The Company measures the loss allowance for financial assets at an amount equal to lifetime
expected credit losses if the credit risk on that financial asset has increased significantly since
initial recognition. If the credit risk on a financial asset has not increased significantly since
initial recognition, the Company measures the loss allowance for financial assets at an
amount equal to 12-month expected credit losses. The Company uses both forward-looking
and historical information to determine whether a significant increase in credit risk has
occurred.

Non-financial assets
Tangible and intangible assets

Property, plant and equipment and intangible assets with finite life are evaluated for
recoverability whenever there is any indication that their carrying amounts may not be
recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair
value less cost to sell and the value-in-use) is determined on an individual asset basis unless
the asset does not generate cash flows that are largely independent of those from other

assets. In such cases, the recoverable amount is determined for the cash generating unit
(CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying
amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An
impairment loss is recognized in the statement of profit and loss to such extent.

2.5. Employee Benefit

Short term employee benefits

Short term benefits payable before twelve months after the end of the reporting period in
which the employees have rendered service are accounted as expense in statement of profit
and loss.

Long term employee benefits

During the Financial year 19-20 the company has discontinued the job work of Britannia
Industries limited. The company is exploring new line of business. Meanwhile the company
has relived most of the employees and has paid all the dues to the employees. Further the
company has surrendered the Employee Group Gratuity Scheme with LIC of India and also
surrendered employee group super annuation scheme.

---

Mar 31, 2024

2. SIGNIFICANT ACCOUNTING POLICIES

2.1. Property, plant and equipment

Property, plant and equipment are stated at cost of acquisition or construction less
accumulated depreciation and any accumulated impairment losses. The cost of fixed assets
comprises of its purchase price, non-refundable taxes & levies, freight and other incidental
expenses related to the acquisition and installation of the respective assets. Borrowing cost
attributable to financing of acquisition or construction of the qualifying fixed assets is
capitalized to respective assets when the time taken to put the assets to use is substantial.
When major items of property, plant and equipment have different useful lives, they are
accounted for as separate items of property, plant and equipment. The cost of replacement
of any property, plant and equipment is recognized in the carrying amount of the item if it is
probable that the future economic benefit associated with the item will flow to the Company
and its cost can be measured reliably.

The Estimated Useful Lives of assets are in accordance with the Schedule II of the
Companies Act, 2013.

The company has decided to sell its factory land. The said assets are classified as Non
Current assets held for sale. Even though the company could not sell the factory land during
the year, the intention of the management is still same.

2.2. Financial Instruments

2.2.1. Cash and cash equivalents

Cash and cash equivalents consists of cash on hand, short demand deposits and highly
liquid investments, that are readily convertible into known amounts of cash and which are
subject to an insignificant risk of change in value. Short term means investments with
original maturities / holding period of three months or less from the date of investments.
Bank overdrafts that are repayable on demand and form an integral part of the Company''s
cash management are included as a component of cash and cash equivalent for the purpose
of statement of cash flow.

2.2.2. Trade Receivables

Trade receivables are amounts due from customers for sale of goods or services performed
in the ordinary course of business. Trade receivables are initially recognized at its
transaction price which is considered to be its fair value and are classified as current assets
as it is expected to be received within the normal operating cycle of the business.

2.2.3. Borrowings

Borrowings are initially recorded at fair value and subsequently measured at amortized
costs using effective interest method. Transaction costs are charged to statement of profit
and loss as financial expenses over the term of borrowing.

2.2.4. Trade payables

Trade payables are amounts due to vendors for purchase of goods or services acquired in
the ordinary course of business and are classified as current liabilities to the extent it is
expected to be paid within the normal operating cycle of the business.

2.2.5. Other financial assets and liabilities

Other non-derivative financial instruments are initially recognized at fair value and
subsequently measured at amortized costs using the effective interest method.

2.3. Inventories

Items of inventories are measured at lower of cost and net realisable value after providing
for obsolescence, if any except inventory of shares and securities held for trading are valued
at fair value through P&L. Cost of inventories comprises of cost of purchase, cost of
conversion and other costs including manufacturing overheads incurred in bringing them to
their respective present location and condition. Cost of raw materials, process, stores and
spares, packing materials, trading and other products are determined on weighted average
basis.

2.4. Impairment of Assets
Financial assets

At each balance sheet date, the Company assesses whether a financial asset is to be
impaired. Ind AS 109 requires expected credit losses to be measured through loss allowance.
The Company measures the loss allowance for financial assets at an amount equal to lifetime
expected credit losses if the credit risk on that financial asset has increased significantly since
initial recognition. If the credit risk on a financial asset has not increased significantly since
initial recognition, the Company measures the loss allowance for financial assets at an
amount equal to 12-month expected credit losses. The Company uses both forward-looking
and historical information to determine whether a significant increase in credit risk has
occurred.

Non-financial assets
Tangible and intangible assets

Property, plant and equipment and intangible assets with finite life are evaluated for
recoverability whenever there is any indication that their carrying amounts may not be
recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair
value less cost to sell and the value-in-use) is determined on an individual asset basis unless
the asset does not generate cash flows that are largely independent of those from other
assets. In such cases, the recoverable amount is determined for the cash generating unit
(CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying
amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An
impairment loss is recognized in the statement of profit and loss to such extent.

2.5. Employee Benefit

Short term employee benefits

Short term benefits payable before twelve months after the end of the reporting period in
which the employees have rendered service are accounted as expense in statement of profit
and loss.

Long term employee benefits

During the Financial year 19-20 the company has discontinued the job work of Britannia
Industries limited. The company is exploring new line of business. Meanwhile the company
has relived most of the employees and has paid all the dues to the employees. Further the
company has surrendered the Employee Group Gratuity Scheme with LIC of India and also
surrendered employee group super annuation scheme.

---

Mar 31, 2015

2.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention and prepares its accounts on a going concern basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

2.2 Use of estimates

In the preparation of the financial statements, the management of the Company makes estimates and assumptions in conformity with the applicable accounting principles in India that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, and the useful lives of fixed assets and intangible assets.

2.3 Tangible fixed assets

Fixed assets are stated at cost. Cost comprises cost of acquisition, freight, duties levies and directly attributable cost of bringing the assets to their working condition up to the date, the asset is ready for its intended use.

2.4 Capital work-in-progress

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and related incidental expenses.

2.5 Intangible assets

The company recognizes intangible assets in accordance with Accounting Standard i.e. AS 26 issued by the Institute of Chartered Accountants of India on intangible assets less accumulated amortisation and impairment losses.

2.6 Depreciation & amortisation

Depreciation has been provided on a straight line method based on the economic useful life of the assets ascertained by the Management which is greater than or less than or equal to the corresponding rates prescribed in Part "C" of Schedule II of the Companies Act, 2013 and accordingly the rates of depreciation are applied. Depreciation on additions and deletions during the year is calculated on pro-rata basis.

2.7 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss.

2.8 Inventories

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including Octroi and other levies, transit insurance and receiving charges.

Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty

2.9 Revenue Recognition:

Sales

Income from sales of goods is recognised upon passage of risks and rewards of ownerships to goods, which generally coincide with delivery of goods to customers.

Interest income from deposit is accounted on accrual bases and considered as operating income Dividend Income is accounted when the right to receive the payment is established.

2.10 Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

2.12 Employee benefits

Employee benefits include provident fund, gratuity fund and compensated absences.

Annual leave benefits / leave encashment to employees and retirement benefits in form of gratuity are charged to Statement of Profit and Loss based on undiscounted amount (actual bases) rather than actuarial valuations.

Defined contribution plans

The Company's contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and (b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

2.13 Research and development expenses

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product's technological feasibility has been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

2.14 Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. and based on expected outcome of the assessment.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date.

Deferred tax liabilities are recognised for all timing differences.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.

Current and deferred tax relating to items directly recognised in equity are recognised in equity and not in the Statement of Profit and Loss.

2.15 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

However, all known, material contingent liabilities are disclosed by way of separate notes.

2.16 Prior Expenditure / Income

Expenditure / Income relating to prior year are disclosed separately, if any.

2.17 Earnings Per Share Basic EPS

The earnings considered in ascertaining the Company's basic EPS comprise the net profit/ (loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Diluted EPS

The net profit/ (loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.

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Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention and prepares its accounts on a going concern basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

1.2 Use of estimates

In the preparation of the financial statements, the management of the Company makes estimates and assumptions in conformity with the applicable accounting principles in India that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful debts, future obligations under employee retirement benefit plans, income taxes, and the useful lives of fixed assets and intangible /assets.

1.3 Tangible fixed assets

Fixed assets are stated at cost. Cost comprises cost of acquisition, freight, duties levies and directly attributable cost of bringing the assets to their working condition up to the date, the asset is ready for its intended use.

Consumables and other assets in such nature as computers parts, individually costing Rs. 5,000 or less are not capitalized, except when they are part of a large capital investment program.

1.4 Capital work-in-progress

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and related incidental expenses.

1.5 Intangible assets

The company recognizes intangible assets in accordance with Accounting Standard i.e. AS 26 issued by the Institute of Chartered Accountants of India on intangible assets less accumulated amortisation and impairment losses.

1.6 Depreciation & amortisation

Depreciation is provided in accordance with the provisions of Schedule XIV of the Companies Act, 1956 on "straight-line" method as:

Office Equipment @ 4.75%

Factory Building & Tube well @ 3.34%

Furniture and Fixtures @ 6.33%

Computers @ 16.21%

Vehicle @ 5.25%

1.7 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss.

1.8 Inventories

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including Octroi and other levies, transit insurance and receiving charges.

Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty

1.9 Revenue Recognition:

Sales

Income from sales of goods is recognised upon passage of risks and rewards of ownerships to goods, which generally coincide with delivery of goods to customers.

Interest income from deposit is accounted on accrual bases and considered as operating income Dividend Income is accounted when the right to receive the payment is established.

1.10 Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of '' such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

1.12 Employee benefits

Employee benefits include provident fund, gratuity fund and compensated absences.

Annual leave benefits / leave encashment to employees and retirement benefits in form of gratuity are charged to Statement of Profit and Loss based on undiscounted amount (actual bases) rather than actuarial valuations.

Defined contribution plans

The Company''s contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Short-term employee benefits

"The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur."

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.13 Research and development expenses

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technological feasibility has been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

1.14 Taxes on Income

"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. and based on expected outcome of the assessment."

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date.

Deferred tax liabilities are recognised for all timing differences.

Defferred tax assets in respect of unabsorbed depreciation and carry forward losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.

Current and deferred tax relating to items directly recognised in equity are recognised in equity and not in the Statement of Profit and Loss.

1.15 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

However, all known, material contingent liabilities are disclosed by way of separate notes.

1.16 Prior Expenditure/Income

Expenditure / Income relating to prior year are disclosed separately, if any.

1.17 Earnings Per Share

Basic EPS

The earnings considered in ascertaining the Company''s basic EPS comprise the net profit/ (loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Diluted EPS

The net profit/ (loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.

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Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention and prepares its accounts on a going concern basis. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cs-.h equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

1.2 Use of estimates

In the preparation of the financial statements, the management of the Company makes estimates and assumptions in conformity with the applicable accounting principles in India that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions foi doubtful debts, future obligations under employee retirement benefit plans, income taxes, and the useful lives of fixed assets and intangible assets.

1.3 Tangible fixed assets

Fixed assets are stated at cost. Cost comprises cost of acquisition, freight, duties levies and directly attributable cost of bringing the assets to their working condition up to the date, the asset is ready for its intended use.

Consumables and other assets in such nature as computers parts, individually costing Rs. 5,000 or less are not capitalized, except when they are part of a large capital investment program.

1.4 Capital work-in-progress

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and related incidental expenses.

1.5 Intangible assets

The company recognizes intangible assets in accordance with Accounting Standard i.e. AS 26 issued by the Institute of Chartered Accountants of India on intangible assets less accumulated amortisation and impairment losses.

1.6 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss.

1.7 Inventories

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including Octroi and other levies, transit insurance and receiving charges.

Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty

1.8 Revenue Recognition:

Sales

Income from sales of goods is recognised upon passage of risks and rewards of ownerships to goods, which generally coincide with delivery of goods to customers.

Interest income from deposit is accounted on accrual bases and considered as operating income Dividend Income is accounted when the right to receive the payment is established.

1.9 Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

1.10 Employee benefits

Employee benefits include provident fund, gratuity fund and compensated absences.

Annual leave benefits / leave encashment to employees and retirement benefits in form of gratuity are charged to Statement of Profit and Loss based on undiscounted amount (actual bases) rather than actuarial valuations.

Defined contribution plans

The Company's contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Short-term employee benefits

"The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur."

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.11 Research and development expenses

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product's technological feasibility has been established, in which case such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Fixed assets utilised for research and development are capitalised and depreciated in accordance with the policies stated for Tangible Fixed Assets and Intangible Assets.

1.12 Taxes on Income

"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. and based on expected outcome of the assessment."

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date.

Deferred tax liabilities are recognised for all timing differences.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed ot each Balance Sheet date for their reliability.

Current and deferred tax relating to items directly recognised in equity are recognised in equity and not in the Statement of Profit and Loss.

1.13 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

However, all known, material contingent liabilities are disclosed by way of separate notes.

1.14 Prior Expenditure/Income

Expenditure / Income relating to prior year are disclosed separately, if any.

1.15 Earnings Per Share

Basic EPS

The earnings considered in ascertaining the Company's basic EPS comprise the net profit/ (loss) after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Diluted EPS

The net profit/ (loss) after tax and the weighted average number of shares outstanding during the year are adjusted for all the effects of dilutive potential equity shares for calculating the diluted EPS.

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Mar 31, 2010

(1)(A) METHOD OF ACCOUNTING :

Expenses are provided on mercantile system except cash system for Insurance Claims and Sales Tax Refund.

The Accounts have been prepared on historical cost basis of accounting. Ail expenses and income to the extent considered payable and receivable unless stated otherwise are accounted for on accrual basis. Accounting policies not specifically referred to are .in .consistent with generally accepted accounting practices.

(B) FIXED ASSETS:

Fixed Assets are stated at cost of acquisition or construction less depreciation. All costs relating to the acquisition and installation of fixed assets are capitalised.

(C) DEPRECIATION:

Depreciation on Fixed Assets has been provided on straight line method as per rates specified in amended schedule XIV of the Companies Act, 1956 vide Notification No.GSR 758 (2) dated 16th December 1993 other than Freehold Land for full year.

(D) INVENTORIES:

Raw Materials, & Furnace Oil is valued at cost. Stock of shares of Trading activity is valued at cost or market value whichever is lower.

(E) INVESTMENT:

Quoted Investments are stated at cost.

(F) GRATUITY:

Payment for present liability of future payment of Gratuity is being made to approved Gratuity Funds which fully covers the same under cash accumulation scheme of the Life Insurance Corporation of India.