3. SIGNIFICANT ACCOUNTING POLICIES:

A) USE OF ESTIMATES:

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

B) INVENTORIES:

Basis of valuation of inventories followed is given below:

(i) Raw materials are valued at FIFO basis net of excise duty at the lower of cost or net realizable
value.

(ii) Work- in- Process is valued at their estimated absorption cost.

(iii) Finished goods are valued at cost of production inclusive of excise duty.

(iv) Consumable Stores & Packing Materials are valued at cost or net realizable value whichever is
lower.

(v) Damaged, unserviceable and inert stock is suitably depreciated.

C) DEPRECIATION:

Depreciation on Property, Plant & Equipment is provided on Straight Line Method on the basis of useful
lives given in Schedule-II to the Companies Act, 2013. Depreciation on additions / deletions to assets
during the year is provided on pro-rata basis.

D) REVENUE RECOGNITION:

SALES / OTHER INCOME:

(i) Sales are recognized at the point of dispatch of finished goods to the customers. Sale of waste is
accounted for on dispatch basis.

(ii) Processing income is recognized upon rendering of the services.

(iii) Income from dividend on mutual fund is taken on receipt basis.

(iv) Interest Income is recognized on the basis of accrual but subject to realization.

E) PROPERTY, PLANT & EQUIPMENT:

Property, Plant & Equipment are recorded in the books at cost of acquisition, which comprises of
the purchase price (net of rebate, discount and Cenvat credit) freight and other incidental expenses
including interest relating to acquisition and expenditure on their installation or construction. Capital
work in progress comprises the cost of the assets purchased but which are not yet ready for intended
use at the date of Balance Sheet.

F) FOREIGN CURRENCY TRANSACTIONS:

i. Initial Recognition

Foreign Currency transactions are recorded 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 the transaction.

ii. Conversion

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

iii. Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting Company's
monetary items at rates different from those at which they were initially recorded during the year,
or reported in previous financial statements, are recognized as income or as expenses in the year
in which they arise.

G) INVESTMENT:

Investments that are readily realizable and intended to be held for not more than a year are classified as
current investments. All other investments are classified as long-term investments. Current investments
are carried at lower of cost and fair value. Long term investments are carried at cost. However, provision
for diminution in value is made to recognize other than temporary, if any, in the value of the investments.

H) EMPLOYEE BENEFITS:

Liability in respect of employee benefit is provided for and/or charged to the Statement of Profit & Loss
as follows:

(i) PROVIDENT FUND:

The Company's provident fund is in the form of defined contribution plan where contribution
is made to funds. The Contribution is accounted on accrual basis. Employers Contribution is
charged to the Statement of Profit and Loss of the year in which the employees render the related
service.

(ii) LEAVE ENCASHMENT:

The leave encashment liability of the employees of the Company is covered by a Master Policy
taken out with the Life Insurance Corporation of India.

(iii) GRATUITY:

The Gratuity liability in respect of the employees of the Company is covered by a Master Policy
taken out with the Life Insurance Corporation of India under the Group Gratuity Scheme.

I) BORROWING COST:

The cost of borrowing is capitalized to the extent term loan was utilized for the purpose of capital
expenditure before the period upto which the assets were put to use for commercial production.
Borrowing cost incurred post commencement of commercial production is charged to the Statement of
Profit & Loss.

J) SEGMENT REPORTING:

Segment revenue, results, assets and liabilities have been identified to represent segments on the
basis of their relationship to the operating activities of the segment.

K) EARNINGS PER SHARE (EPS)

The earnings considered in ascertaining the Company's Earning per Share (‘EPS') comprises the net
profit after tax. The number of shares used in computing the basic EPS is the weighted average number
of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS,
after adjusting for the effects of potential dilutive equity shares.

L) TAX EXPENSE
CURRENT TAX:

Tax on income for the current year is determined as per the provisions of the Income Tax Act, 1961.
DEFERRED TAX:

Deferred tax is recognized on timing differences between the accounting income and the taxable
income for the year and quantified using the tax rates and laws enacted or substantively enacted as on
the Balance Sheet date. Deferred tax Assets are recognized and carried forward to the extent that there
is a reasonable certainty of realization, however in Case of unabsorbed tax losses and tax Deprecation
are recognized only when there is a virtual certainty of their realization.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company
writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that sufficient future taxable income will be available
against which deferred tax asset can be realized. Any such write-down is reversed to the extent that
it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable
income will be available.

M) IMPAIRMENT OF ASSETS:

Assets that are subject to amortization are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognized for the amount by which the assets' carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of the assets' fair value less costs to sell and value in use.