Accounting Policies of Vapi Enterprise Ltd. Company

Mar 31, 2025

a. Corporate Information

Vapi Enterprise Limited (Formerly known as Vapi Paper Mills Limited) is currently having treasury income as a major source of income as the Company has deployed all of it''s surplus funds in Bank FDRs in view of the fact that the Company is looking for proper business opportunities.

The Company is a public limited company incorporated and domiciled in India. The address of its corporate office is 213, Udhyog Mandir No. 1, 2^nd Floor, 7/C, Pitamber Lane, Mahim- West, Mumbai -400 016.

b. Basis of preparation

These financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), under the historical cost convention on the accrual basis. The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. However, amendment to Ind AS 116 does not have any impact on the amounts recognized in current year.

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

c. Estimates and Judgements

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period.

d. Foreign Currency Transactions

i. Foreign Currency Transactions are recorded on the basis of the exchange rate prevailing on the date of transaction.

ii. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii. Monetary items which are denominated in foreign currency are restated at the exchange rates prevailing at the Balance Sheet date.

iv. Profit/ loss on translation thereon is credited or charged to the Profit and Loss Account except in case of long-term liabilities, where they relate to acquisition of Fixed Assets, in which case they are adjusted to carrying cost of such assets.

e. Revenue recognition

The Interest and dividend income is recognized based on establishment of the right to receive such income. The interest income is recognized on accrual basis

f. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by the Management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life.

Depreciation methods, estimated useful lives and residual value

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management. The Depreciation is calculated on written down value (WDV) method to allocate their cost, net of their residual values, over their estimated useful lives. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to Companies Act, 2013.

Asset Class	Life of Asset (In Years)
Buildings	30
Furniture and Fittings	10
Plant and Machinery	15
Office Equipments	5
Computers	3

Impairment

The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Reversal of impairment loss recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

g. Income Taxes

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity.

i. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

ii. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized.

h. Investments

Non-current investments are stated at cost. Provision for diminution in the value of Non-current Investments is made only if such a decline is other than temporary, if any.

i. Inventories

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. Inventory of stores and spares are stated at cost.

j. Employee Benefits

The company accounts for leave encashment benefits, bonus and gratuity based on an estimated actual provision.

k. Borrowing Cost

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

l. Provisions and Contingencies

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present

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Mar 31, 2024

Note 1: Significant accounting policiesa. Corporate Information

Vapi Enterprise Limited (Formerly known as Vapi Paper Mills Limited) provides services of lease rental and job work services with many businesses. The company have been in the business for the last 47 years.

The Company is a public limited company incorporated and domiciled in India. The address of its corporate office is 213, Udhyog Mandir No.1,2nd Floor, 7/C, Pitamber Lane, Mahim- West, Mumbai -400 016.

b. Basis of preparation

These financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), under the historical cost convention on the accrual basis. The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter. However amendment to Ind AS 116 does not have any impact on the amounts recognised in current year.

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

c. Estimates and Judgements

The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period.

d. Foreign Currency Transactions

i. Foreign Currency Transactions are recorded on the basis of the exchange rate prevailing on the date of transaction.

ii. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

iii. Monetary items which are denominated in foreign currency are restated at the exchange rates prevailing at the Balance Sheet date.

iv. Profit/ loss on translation thereon is credited or charged to the Profit and Loss Account except in case of long-term liabilities, where they relate to acquisition of Fixed Assets, in which case they are adjusted to carrying cost of such assets.

e. Revenue recognition

The company''s contract with the customers includes providing of premises on operating lease and manufacturing of products on job work basis. Hence the company recognises its revenue based on terms of the contract.

The dividend income is recognised based on establishment of the right to receive such income. The interest income is recognised on accrual basis

f. Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by the Management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life.

Depreciation methods, estimated useful lives and residual value

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management. The Depreciation is calculated on written down value (WDV) method to allocate their cost, net of their residual values, over their estimated useful lives. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to Companies Act, 2013.

Asset Class	Life of Asset(In Years)
Buildings	30
Furniture and Fittings	10
Plant and Machinery	15
Office Equipments	5
Computers	3

Impairment

The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. Reversal of impairment loss recognised in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

g. Income Taxes

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to items recognized directly in equity.

i. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

ii. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized

h. Investments

Non-current investments are stated at cost. Provision for diminution in the value of Non-current Investments is made only if such a decline is other than temporary, if any.

i. Inventories

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. Inventory of stores and spares are stated at cost. For this purpose, cost is arrived at on the First in First out basis.

j. Employee Benefits

The company accounts for leave encashment benefits, bonus and gratuity on declaration.

k. Borrowing Cost

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

l. Provisions and Contingencies

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present

obligation that arises from past events but is not recognized because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

m. Leases

The Company as a lessee

The Company''s lease asset classes primarily consist of leases for land. Leases on which significant portion of the risks and rewards of ownership are effectively retained by the lessor, are classified as operating leases. Operating leases payments are charged to the Statement Profit and Loss on a straight- line basis over the lease term.

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

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Mar 31, 2014

A. Historical Cost Basis:

The financial statements have been prepared and presented under the historical cost (except for free hold land) convention on accrual basis of accounting in accordance with the accounting principles generally accepted in India and in compliance with provisions of the Companies Act, 1956 and comply with the mandatory Accounting Standards (AS) specified in the Companies (Accounting Standard) Rules, 2006, prescribed by the Central Government. The accounting policies have been consistently applied by the company.

B. Use of Estimates:

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting year, the reported amounts of assets and liabilities and the disclosures of contingent liabilities as on the date of the financial statements. Examples of such estimates include useful life of Fixed Assets, provision for doubtful debts/ advances, deferred tax, etc. Actual results could differ from those estimates. Such difference is recognized in the year/s in which the results are known / materialized.

C. Revenue Recognisation:

a. Revenue from services is recognized as and when services are rendered as per terms of contract.

b. Dividend income is recognized based on establishment of the right to receive such income.

D. Fixed Assets:

a. Fixed Assets are stated at cost and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any.

b. ''Cost'' for the purpose of valuing fixed assets and capital work in progress comprises of its purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

E. Depreciation, Amortization and depletion:

a) Depreciation on fixed assets has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under :

i) As per straight line method on plant and machineries.

ii) As per written down value method on all other assets.

b) Depreciation on additions/sale of assets during the year has been provided on pro-rata basis.

F. Impairment of Assets:

a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of Company''s fixed assets. If any indication exists an assets recoverable amount is estimated, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

b) Reversal of impairment loss recognised in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

G. Investments:

Long-term investments are valued at cost less provision for diminution in the value other than temporary, if any.

H. Inventories :

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. Inventory of stored and spares are valued at cost. For this purpose cost is arrived at on the First in First out basis.

I. Foreign Currency Transactions:

Foreign Currency Transactions are recorded on the basis of the exchange rate prevailing on the date of transaction.

a) Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

b) Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date. Profit/ loss on translation thereon is credited or charged to the Profit and Loss Account.

J. Employees Benefits:

The company accounts for leave encashment benefits, bonus and gratuity on declaration.

K. Borrowing Cost :

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

L. Taxation:

a) Tax expense comprise of current and deferred taxes.

b) Current income is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act.

c) Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized.

d) Deferred tax assets/liabilities are reviewed as at each balance sheet date based on developments during the period and available case law to re-assess realization/ liabilities.

M. Provisions, Contingent Liabilities and Contingent Assets:

a) A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote. Contingent liabilities are not recognized but are disclosed in the notes.

b) Contingent Assets are neither recognized nor disclosed in the financial statements.

c) A provision is recognized when there is present obligation as a result of past event 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 contingent asset and contingent liabilities are reviewed at each balance sheet date.

N. General:

Accounting Policies not specifically referred to are consistent with generally accepted accounting practice.

O. Leases: As a Lessee

Leases on which significant portion of the risks and rewards of ownership are effectively retained by the lessor, are classified as operating leases. Operating leases payments are charged to the Statement Profit and Loss on a straight- line basis over the lease term.

Leases: As a Lessor

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognized as an expense in Statement of Profit and Loss in period in which they are incurred.

(d) The Rights, Preferences, Restriction including restriction on the distribution of dividend and repayments of capital:

i) The Company is having only one class of equity shares referred to as equity shares having a par value of Rs.10. Each holder of equity shares is entitled to one vote per share held.

ii) Dividends, if any, is declared and paid in Indian rupees. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

However, in view of the accumulated losses, no dividend is / was declared on the equity shares for the year ended March 31, 2014.

iii) In the event of liquidation of the Company, the equity share holder will be entitled to receive remaining assets of the Company after the distribution / repayments of all creditors. The distribution to the share holder will be in proportion of the number of shares held by each share holder.

iv) The company declares and pays dividend in Indian Rupees.The companies Act, 1956 provides that any dividend be declared out of accumulated distributed profits only after transfer to general reserve of a special percentage of net profit computed in accordance with current regulations.

(e) Details of shares held by shareholders holding more than 5% of the agregate shares in the Company:

There are no shareholders holding more than 5% of the aggregate shares in the company

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Mar 31, 2013

A. Historical Cost Basis:

The financial statements have been prepared and presented under the historical cost (except for free hold land) convention on accrual basis of accounting in accordance with the accounting principles generally accepted in India and in compliance with provisions of the Companies Act, 1956 and comply with the mandatory Accounting Standards (AS) specified in the Companies (Accounting Standard) Rules, 2006, prescribed by the Central Government. The accounting policies have been consistently applied by the company.

B. Use of Estimates :

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting year, the reported amounts of assets and liabilities and the disclosures of contingent liabilities as on the date of the financial statements. Examples of such estimates include useful life of Fixed Assets, provision for doubtful debts/ advances, deferred tax, etc. Actual results could differ from those estimates. Such difference is recognized in the year/s in which the results are known / materialized.

C. Revenue Recognisation :

a) Revenue from services is recognized as and when services are rendered as per terms of contract.

b) Dividend income is recognized based on establishment of the right to receive such income.

D. Fixed Assets:

a) Fixed Assets are stated at cost and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any.

b) ''Cost'' for the purpose of valuing fixed assets and capital work in progress comprises of its purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

E. Depreciation/Amortization :

a) Depreciation on fixed assets has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under :

i) As per straight line method on plant and machineries.

ii) As per written down value method on all other assets.

b) Depreciation on additions/sale of assets during the year has been provided on pro-rata basis.

F. Impairment of Assets:

a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of Company''s fixed assets. If any indication exists an assets recoverable amount is estimated, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

b) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

G. Investments:

Long term investments are valued at cost less provision for diminution in value, other than temporary, if any.

H. Inventories :

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. Inventory of stored and spares are valued at cost. For this purpose cost is arrived at on the First in First out basis.

I. Foreign Currency Transactions:

Foreign Currency Transactions are recorded on the basis of the exchange rate prevailing on the date of transaction.

a) Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

b) Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date. Profit/ loss on translation thereon is credited or charged to the Profit and Loss Account.

J. Employees Benefits:

The company accounts for leave encashment benefits, bonus and gratuity on declaration.

K. Borrowing Cost :

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

L. Taxation :

a) Tax expense comprise of current and deferred taxes.

b) Current income is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act.

c) Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized.

d) Deferred tax assets/liabilities are reviewed as at each balance sheet date based on developments during the period and available case law to re-assess realization/ liabilities.

M. Provisions, Contingent Liabilities and Contingent Assets:

a) A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote. Contingent liabilities are not recognized but are disclosed in the notes.

b) Contingent Assets are neither recognized nor disclosed in the financial statements.

c) A provision is recognized when there is present obligation as a result of past event 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 contingent asset and contingent liabilities are reviewed at each balance sheet date.

N. General:

Accounting Policies not specifically referred to are consistent with generally accepted accounting practice.

O. Leases: As a Lessee

Leases on which significant portion of the risks and rewards of ownership are effectively retained by the lessor, classified as operating leases. Operating leases payments are charged to the Statement Profit and Loss on a straight- line basis over the lease term.

Leases: As a Lesser

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognized as an expense in Statement of Profit and Loss in period in which they are incurred.

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Mar 31, 2012

A) Historical Cost Basis:

The financial statements are prepared under the historical cost convention and in accordance with applicable mandatory accounting standards and relevant presentation requirements of the Companies Act, 1956.

b) Use of Elements :

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

c) Revenue Recognisation :

All income and expenses are recognised and accounted on accrual basis, except interest on loans which is accounted on cash basis as there is uncertainty of realization.

d) Fixed Assets and Depreciation :

a) Fixed Assets include all expenditure of capital nature and are stated at cost less depreciation.

b) Depreciation on fixed assets has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under:

i) As per straight line method on plant and machineries.

ii) As per written down value method on all other assets.

c) Depreciation on additions/sale of assets during the year has been provided on pro-rata basis.

e) Impairment of Fixed Assets:

a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of company's fixed assets. If any indication exists an assets recoverable amount is estimated, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

b) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

f) Investments:

Investments are of long-term nature and are valued at acquisition cost.

g) Inventories:

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. For this purpose cost is arrived at on the First in First out basis.

h) Foreign Currency Transactions :

Foreign Currency Transactions are recorded by applying the exchange rate prevailing on the date of payment.

a) Transactions in foreign currencies are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date and profit/ loss on translation thereon is credited or charged to the Profit and Loss account.

i) Sales:

Sales comprise of sales of manufactured and trading goods and are inclusive of excise duty but it excludes sales tax and other charges received.

j) Employees Benefits:

The company accounts for leave encashment benefits, bonus and gratuity on declaration.

k) Borrowing Cost:

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

l) Taxes on Income :

a) Tax expense comprise of current and deferred taxes.

b) Current income tax and fringe benefit tax is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act.

c) Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized.

m) Provisions, Contingent Liabilities and Contingent Assets.

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past even 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.

A provision is recognized when there is present obligation as a result of past event 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 are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

A disclosure for a contingent liability is made when there is a possible or present obligation that may but probably will not require an outflow of resources When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure ts made.

n) General:

Accounting Policies not specifically referred to are consistent with generally accepted accounting practice.

o) Leases: As a Lessee

Leases on which significant portion of the risks and rewards of ownership are effectively retained by the lessor, are classified as operating leases. Operating leases payments are charged to the Statement Profit and Loss on a straight-line basis over the lease term.

Leases: As a Lessor

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognized as an expense in Statement of Profit and Loss in period in which they are incurred.

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Mar 31, 2010

1. Historical Cost Basis:

The financial statements are prepared under the historical cost convention and in accordance with applicable mandatory accounting standards and relevant presentation requirements of the Companies Act, 1956.

2. Use of Elements :

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

3. Revenue Recognisation:

All income and expenses are recognised and accounted on accrual basis, except interest on loans which is accounted on cash basis as there is uncertainty of realization.

4. Fixed Assets and Depreciation :

a) Fixed Assets include all expenditure of capital nature and are stated at cost less depreciation.

b) Depreciation on fixed assets has been provided at the rates prescribed in Schedule XIV to the Companies Act, 1956 as under :

i) as per straight line method on plant and machineries.

ii) as per written down value method on all other assets.

c) Depreciation on additions/sale of assets during the year has been provided on pro-rata basis.

5. Impairment of Fixed Assets:

a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of Companys fixed assets. If any indication exists an assets recoverable amount is estimated, an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

b) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

6. Investments:

Investments are of long-term nature and are valued at acquisition cost.

7. Inventories :

Inventories of stock in process, finished goods and raw materials have been valued at lower of cost or net realizable value. For this purpose cost is arrived at on the First in First out basis.

8. Foreign Currency Transactions :

Foreign Currency Transactions in respect of import of Raw Materials are recorded by applying the exchange rate prevailing on the date of payment.

a) Transactions in foreign currencies are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Monetary items which are denominated in foreign currency are translated at the exchange rates prevailing at the Balance Sheet date and profit/ loss on translation thereon is credited or charged to the Profit and Loss account.

9. Sales:

Sales comprise of sales of manufactured and trading goods and are inclusive of excise duty but it excludes sales tax and other charges received.

10. Employees Benefits:

Companys contributions to Provident Fund and Family Pension Scheme are charged to Profit & Loss Account on accrual basis.

a) The company does not offer leave encashment benefits. Bonus is accounted on declaration.

b) The liability on account of Gratuity is accounted on the basis of actuarys certificate.

c) The companys contribution to Provident Fund and ESIC are charged to Profit & Loss account.

11. Borrowing Cost:

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost of such assets. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

12. Taxes on Income :

a) Tax expense comprise of current and deferred taxes.

b) Current income tax and fringe benefit tax is measured at the amount expected to be paid to tax authorities in accordance with the Indian Income Tax Act.

c) Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized.

13. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event 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.

A provision is recognized when there is present obligation as a result of past event 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 are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

A disclosure for a contingent liability is.made when there is a possible or present obligation that may but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

14. General:

Accounting Policies not specifically referred to are consistent with generally accepted accounting practice.

15. Earning per share

The basic earning per share is computed by dividing the net profit/(loss) attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period.

16. Leases:

Assets taken various residential premises for workers on leave and license basis, under which all the risks and rewards of ownership are effectively retained by the lessor, are classified as operating leases. Operating leases payments are recognized as expense in the Profit and Loss Account on a straight- line basis over the lease term