Accounting Policies of Vamshi Rubber Ltd. Company

Mar 31, 2024

2. Significant Accounting Policies

This note provides a list of the significant accounting policies adopted in the preparation of these
financial statements. These policies have been consistently applied to all the years presented, unless
otherwise stated.

a) Basis of preparation

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

ii) Historical cost convention

The financial statements have been prepared on a historical cost basis except certain
financial assets carried at fair value.

b) Segment reporting

The Operating segment has been reported in a manner consistent with the internal reporting
provided to the chief financial officer and the chief executive officer who are the chief operating
decision maker (CODM). The Company is engaged in the manufacturing of the Precured Tread
Rubber, Cushion Gum, Vulcanising Solution and Curing Enevelopes which are used for retreading
of tires. These products do not have any different risk and returns and thus CODM performs
review based on one operating segment.

The company prepared segment information in conformity with the accounting policies adopted for
preparing and presenting the financial statements of the company as a whole.

c) Foreign currency translation
Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary
economic environment in which the entity operates (''the functional currency''). The financial
statements are presented in Indian rupee (Rs), which is Company''s functional and presentation
currency.

Transactions and balances

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

Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. Translation differences on assets
and liabilities carried at fair value are reported as part of the fair value gain or loss.

d) Revenue Recognition:

Revenue is measured at the fair value of the consideration received or receivable. Amounts
disclosed as revenue is net of returns, trade allowances, GST and amounts collected on behalf of
third parties.

The company recognises revenue when the amount of revenue can be reliably measured, it is
probable that future economic benefits will flow to the entity and specific criteria have been met for
each of the company''s activities as described below.

Sale of products

Timing of recognition- Revenue from sale of products is recognised when significant risks and
rewards in respect of ownership of products are transferred to customers based on the terms of
sale. Measurement of revenue- Revenue from sales is based on the price specified in the sales
contracts, net of volume discounts and returns at the time of sale.

Interest income

Interest income is recognized using effective interest rate method. The effective interest rate is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial
asset to the gross carrying amount of a financial asset. Interest income is included under the head
‘Other Income’ in the statement of profit and loss.

Dividend Income

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

Export incentives:

Export incentives (Income) i.e.MEIS/RODTEP claims are depend upon eligibility criteria and
sanction from respective authority. Being in nature of contingent as MEIS/RODTEP claims are
accounted as income, only after the certainty of receipt during the year. Hence, MEIS/RODTEP
income is accounted in the period when the claim amount is formally approved and amount is
received.

e) Govern ment g ra nts

Grants from the government are recognised at fair value where there is a reasonable assurance
that the grant will be received and the Company will comply with all attached conditions.

f) Income tax

The income tax expense or credit for the period is the tax payable on the current period''s taxable
income based on the applicable income tax rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period.

Deferred income tax provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. Deferred income tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses
only if it is probable that future taxable amounts will be available to utilize those temporary
differences and losses.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity, In this case, the tax is also
recognised in other comprehensive income or directly in equity, respectively.

g) Leases

The company as a Lessee:

The Company’s lease asset classes primarily consist of leases for land and buildings. The
Company assesses whether a contract contains a lease at the inception of a contract. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset, the
company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company
has substantially all of the economic benefits from use of the asset through the period of the lease
and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of use (ROU) asset
and a corresponding lease liability for all lease arrangements in which it is a lease, except for lease
with a term of 12 months or less (short-term leases) and low-value leases. For these short-term
and low-value leases, the Company recognizes the lease payments as an operating expense on a
straight-line basis over the term of the lease.

Certain lease arrangements include the options to extend or terminate the lease before the end of
the lease term. ROU assets and lease liabilities include these options when it is reasonably certain
that they will be exercised.

ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any
initial direct cost less accumulated depreciation and impairment losses.

ROU assets are depreciated from the commencement date on a straight-line basis over the shorter
of the lease term and useful life of the underlying asset. ROU assets are evaluated for
recoverability whenever events or changes in circumstances indicate that their carrying amounts
may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the
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.

The lease liability is initially measured at amortized cost at the present value of the future lease
payments. The lease payments are discounted using the interest rate implicit in the lease or, if not
readily determinable, using the incremental borrowing rates in the country of domicile of these
leases. Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset
if the Company changes its assessment of whether it will exercise an extension or a termination
option.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease
payments have been classified as financing cash flows.

The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee,
the contract is classified as a finance lease. All other leases are classified as operating leases.

When the Company is an intermediate lessor, it accounts for its interest in the head lease and the
sublease separately. The sublease is classified as a finance or operating lease by reference to the
right-of-use asset arising from the lead lease.

For operating leases, rental income is recognized on a straight-line basis over the term of the
relevant lease.

i) Impairment of assets

Assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset''s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset''s fair value less costs of disposal and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or
groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the impairment at the end of each reporting
period.

j) Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes
cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

k) Trade receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortized
cost using effective interest method, less provision for impairment.

l) Inventories

Raw materials and stores, work-in-progress, traded and finished goods are stated at the lower of
cost and net realizable value. Cost of raw materials and traded goods comprise of cost of
purchase. Cost of work-in-progress and finished goods comprises direct materials, direct labour
and an appropriate proportion of variable and fixed overhead expenditure, the later being allocated
on the basis of normal operating capacity. Cost of inventories also includes all other cost incurred
in bringing the inventories to their present location and condition. Costs are assigned to individual
items of inventory on weighted average basis. Costs of purchased inventory are determined after
deducting rebates and discounts. Net realizable 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.

m) Investments and other financial assets

(i) Classification

The Company classifies its financial assets in the following measurement categories:

- Those to be measured subsequently at fair value (either through other comprehensive
income, or through profit or loss), and those measured at amortized cost.

- The classification depends on the entity''s business model for managing the financial
assets and the contractual terms of the cash flows. For assets measured at fair value,
gains and losses will either be recorded in profit or loss or other comprehensive income.

(ii) Measurement

At initial recognition, the company measures a financial asset at its fair value plus, in the case
of a financial asset not at fair value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets
carried at fair value through profit or loss are expensed in profit or loss.

Debt instruments: Subsequent measurement of debt instruments depends on the Company''s
business model for managing the asset and the cash flow characteristics of the asset. There
are three measurement categories into which the Company classifies its debt instruments:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash
flows represent solely payments of principal and interest are measured at amortized cost. A
gain or loss on a debt investment that is subsequently measured at amortized cost and is not
part of a hedging relationship is recognised in profit or loss when the asset is derecognized or
impaired. Interest income from these financial assets is included in finance income using the
effective interest rate method.

Fair value through other comprehensive income (FVOCI): Assets that are held for
collection of contractual cash flows and for selling the financial assets, where the assets'' cash
flows represent solely payments of principal and interest, are measured at fair value through
other comprehensive income (FVOCI). Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains or losses, interest revenue and foreign
exchange gains and losses which are recognised in profit and loss. When the financial asset is
derecognized, the cumulative gain or loss previously recognised in OCI is reclassified from
equity to profit or loss and recognised in other gains/(losses). Interest income from these
financial assets is included in other income using the effective interest rate method.

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or
FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment
that is subsequently measured at fair value through profit or loss and is not part of a hedging
relationship is recognised in profit or loss and presented net in the statement of profit and loss
within other gains/(losses) in the period in which it arises. Interest income from these financial
assets is included in other income.

Equity instruments: The Company subsequently measures all equity investments at fair
value. Where the company''s management has elected to present fair value gains and losses
on equity investments in other comprehensive income, there is no subsequent reclassification
of fair value gains and losses to profit or loss. Dividends from such investments are recognised
in profit or loss as other income when the Company''s right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognized
in other gain/(losses) in the statement of profit and loss. Impairment losses (and reversal of
impairment losses) on equity investments measured at FVOCI are not reported separately
from other changes in fair value.

(iii) Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with
its assets carried at amortized cost and FVOCI debt instruments. The impairment methodology
applied depends on whether there has been a significant increase in credit risk. The Company
applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires
expected lifetime losses to be recognised from initial recognition of the receivables.

(iv) Derecognition of financial assets

A financial asset is derecognized only when

• The Company has transferred the rights to receive cash flow from the financial asset or

• retains the contractual rights to receive the cash flows of the financial assets, but assumes
a contractual obligation to pay cash flows to one or more recipients.

Where the entity has transferred an asset, the Company evaluates whether it has
transferred substantially all risks and rewards of ownership of the financial asset. In such
cases, the financial asset is derecognized. Where the entity has not transferred
substantially all risks and rewards of ownership of the financial asset is not derecognized.

Where the entity has neither transferred a financial asset nor retains substantially all risks
and rewards of ownership of the financial asset, the financial asset is derecognized if the
Company has not retained control of the financial asset. Where the Company retains
control of the financial asset, the asset is continued to be recognised to the extent of
continuing involvement in the financial asset.

n) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where
there is a legally enforceable right to offset the recognized amounts and there is an intention to
settle on a net basis or realize the asset and settle the liability simultaneously. The legally
enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the Company or the
counterparty.

o) Property, Plant and Equipment

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

Depreciation/Amortization methods, estimated useful lives and residual value

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

The useful lives have been determined based on the estimated useful life of assets and in the
manner laid down under schedule II of the Companies Act, 2013. The residual values are not more
than 5% of the original cost of the asset. The assets residual values and useful lives are reviewed
and adjusted if appropriate, at the end of each reporting period.

Gains or losses on disposal are determined by comparing proceeds with carrying amount.

p) Intangible assets

i) Recognition

Intangible assets consist of software licenses etc, which are measured at cost on initial
recognition and amortized over their estimated useful life.

ii) Amortization methods and periods

The Company amortizes intangible assets on a straight line method over a period of three
years.

q) Trade and other payables

These amounts represent liabilities for goods and services provided to the company prior to the
end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30
days of recognition. Trade and other payables are presented as current liabilities unless payment is
not due within 12 months after the reporting period. They are recognized initially at their fair value
and subsequently measured at amortized cost using the effective interest method.

r) Borrowings

Borrowings are initially recognized at fair value, net of transaction cost incurred. Borrowings are
subsequently measured at amortized cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognized in profit or loss over the period of the borrowings
using the effective interest method.

Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability
that has been extinguished or transferred to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

Borrowings are classified as current liabilities unless the Company has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting period.

General and specific borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset are capitalized during the period of time that is required to
complete and prepare the asset for its intended use or sale. Qualifying assets are assets that
necessarily take a substantial period of time to get ready for their intended use or sale. Investment
income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing cost eligible for capitalization.

Other borrowings costs are expensed in the period in which they are incurred.

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Mar 31, 2015

A) Basis of Preparation of Financial Statements:

i) The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis, the applicable accounting standards issued by the Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 2013.

ii) Accounting policies not specifically referred to otherwise are in consonance with prudent accounting principles.

iii) All income and expenditure items having material bearing on the financial statements are recognized on accrual basis.

b) Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognised in the period in which the results are known or materialized.

c) Fixed Assets:

Fixed Assets are stated at acquisition cost (net of Cenvat if any) including directly attributable cost bringing them to their respective working conditions for their intended use less accumulated depreciation. All costs, including financing / borrowing cost till commencement of commercial production attributable to the fixed assets have been capitalized.

d) Revenue Recognition:

All revenue income and expenditure are recognized on accrual concept of accounting.

Sale of Precured Tread Rubber

Revenue is recognized when significant risks and rewards of ownership of goods have passed to the buyer and is disclosed including Excise Duty and Sales tax and excluding returns, as applicable.

Interest

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

e) Government Grants and Subsidies:

Grants and subsidies from the government are recognized where there is reasonable assurance that (i) the Company will comply with the conditions attached to them and (ii) the grant/subsidy will be received.

f) Depreciation:

Pursuant to the enactment of the Companies Act, 2013 ('the act'), the company has complied with Part C of the Schedule II of the Companies Act, 2013 except the useful lives of Plant & Machinery, Computers & Software and Non-Factory Building. The same were reviewed by the management to reflect periods over which these assets are expected to be used. The details of estimate useful lives of these assets are given below:

g) Inventories:

Inventories are valued at lower of cost or net realizable value. Cost is determined using FIFO method.

h) Foreign Currency Transactions:

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

Forward contracts for hedging: The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts for speculation purposes.

The premium arising at the inception of such a forward exchange contract is amortized as expense over the life of the contract.

i) Investments:

Investments made by the company are primarily of long term nature and are valued at cost. Provision will be made for decline, other than temporary, in the value of investments.

j) 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 intended use. All other borrowing cost is charged to revenue.

k) Employee Benefits:

Gratuity: Liability towards gratuity is provided on the basis of actuarial valuation made by an independent actuary.

Provident Fund: Contributions paid to the prescribed authority are charged to statement of profit and loss account every year.

Leave Encashment: is at the discretion of the management and is charged to revenue in the year of payment.

Ex-gratia is at the discretion of the management and is charged to statement of profit and loss account

l) Earnings per Share:

The Company reports its Earnings per Share (EPS) in accordance with Accounting Standard 20 issued by the Institute of Chartered Accountants of India.

m) Taxes on Income

- The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.

- Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

n) Provisions, Contingent Liabilities and Contingent Assets:

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

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Mar 31, 2014

A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 1956.

ii) Accounting policies not specifically referred to otherwise are consonance with prudent accounting principles.

iii) All income and expenditure items having material bearing on the financial statements are recognized on accrual basis.

b) FIXED ASSETS

Fixed Assets are stated at acquisition cost (Net of Modvat / cenvat, if any) including directly attributable cost of bringing them to their respective working conditions for the intended use less accumulated depreciation. All costs, including financing/borrowing cost till commencement of commercial production attributable to the fixed assets have been capitalized.

c) REVENUE RECOGNITION

All revenue income and expenditure are recognized on accrual concept of accounting.

Sale of Precured Tread Rubber

Revenue is recognized when significant risks and rewards of ownership of goods have passed to the buyer and is disclosed including Excise Duty and Sales tax and excluding returns, as applicable.

Interest

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

d) DEPRECIATION

Depreciation on fixed assets has been provided on straight-line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis.

e) INVENTORIES

Inventories are valued at lower of cost or net realizable value. Cost is determined using FIFO method.

f) FOREIGN CURRENCY TRANSACTIONS

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

Forward contracts for hedging: The company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts for speculation purposes.

The premium arising at the inception of such a forward exchange contract be amortized as expense over the life of the contract.

g) INVESTMENTS

Investments made by the company are primarily of long term nature and are value at cost. Provision will be made for decline, other than temporary, in the value of investments.

h) 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 intended use. All other borrowing cost are charged to revenue.

i) EMPLOYEE BENEFITS

Gratuity: Liability towards gratuity is provided on the basis of actuarial valuation made by an independent actuary.

Provident Fund: Contributions paid to the prescribed authority are charged to revenue every year.

Leave Encashment: is at the discretion of the management and is charged to revenue in the year of payment.

Exgratia: is at the discretion of the management and is charged to statement of profit and loss account..

j) EARNING PER SHARE

The Company reports its Earnings per Share (EPS) in accordance with Accounting Standard 20 issued by the Institute of Chartered Accountants of India.

k) TAXES ON INCOME

- The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.

- Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

l) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

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Mar 31, 2013

A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 1956.

ii) Accounting policies not specifically referred to otherwise are in consonance with prudent accounting principles.

iii) All income and expenditure items having material bearing on the financial statements are recognized on accrual basis.

b) FIXED ASSETS

Fixed Assets are stated at acquisition cost (Net of Modvat / cenvat, if any) including directly attributable cost of bringing them to their respective working conditions for the intended use less accumulated depreciation. All costs, including financing/borrowing cost till commencement of commercial production attributable to the fixed assets have been capitalized.

C) REVENUE RECOGNITION

All revenue income and expenditure are recognized on accrual concept of accounting.

Sale of Precured Tread Rubber

Revenue is recognized when significant risks and rewards of ownership of goods have passed to the buyer and is disclosed including Excise Duty and Sales tax and excluding returns, as applicable.

Interest

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

d) DEPRECIATION

Depreciation on fixed assets has been provided on straight-line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis.

e) INVENTORIES

Inventories are valued at lower of cost or net realizable value. Cost is determined using FIFO method.

f) FOREIGN CURRENCY TRANSACTIONS

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

Forward contracts for hedging: The company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts for speculation purposes.

The premium arising at the inception of such a forward exchange contract be amortized as expense over the life of the contract.

g) INVESTMENTS

Investments made by the company are primarily of long term nature and are value at cost. Provision will be made for decline, other than temporary, in the value of investments.

h) 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 intended use. All other borrowing cost are charged to revenue.

i) EMPLOYEE BENEFITS

Gratuity: Liability towards gratuity is provided on the basis of actuarial valuation made by an independent actuary.

Provident Fund: Contributions paid to the prescribed authority are charged to revenue every year.

Leave Encashment: is at the discretion of the management and is charged to revenue in the year of payment.

j) EARNING PER SHARE

The Company reports its Earnings per Share (EPS) in accordance with Accounting Standard 20 issued by the Institute of Chartered Accountants of India.

k) TAXES ON INCOME

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.

Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

I) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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

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Mar 31, 2010

A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 1956.

ii) Accounting policies not specifically referred to otherwise are in consonance with prudent accounting principles.

iii) All income and expenditure items having material bearing on the financial statements are recognised on accrual basis.

b) FIXED ASSETS

Fixed Assets are stated at acquisition cost (Net of Cenvat, if any) including directly attributable cost of bringing them to their respective working conditions for the intended use less accumulated depreciation. All costs, including financing/borrowing cost till commencement of commercial production attributable to the fixed assets have been capitalized.

c) REVENUE RECOGNITION

All revenue income and expenditure are recognized on accrual concept of accounting.

d) DEPRECIATION

Depreciation on fixed assets has been provided on straight-line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis.

e) INVENTORIES

Inventories are valued at lower of cost or net realizable value. Cost is determined using FIFO method.

f) FOREIGN CURRENCY TRANSACTIONS

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

Forward contracts for hedging: The company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts for speculation purposes.

The premium arising at the inception of such a forward exchange contract be amortised as expense over the life of the contract.

g) INVESTMENTS

Investments made by the company are primarily of long term nature and are value at cost. Provision will be made for decline, other than temporary, in the value of investments.

h) 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 intended use. All other borrowing cost are charged to revenue.

i) EMPLOYEE BENEFITS

Gratuity: Liability towards gratuity is provided on the basis of actuarial valuation made by an independent actuary.

Provident Fund: Contributions paid to the prescribed authority are charged to revenue every year.

Leave Encashment: is at the discretion of the management and is charged to revenue in the year of payment.

j) EARNING PER SHARE

The Company reports its Earnings per Share (EPS) in accordance with Accounting Standard 20 issued by the Institute of Chartered Accountants of India.

k) TAXES ON INCOME

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company. Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

l) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

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