(a) Basis of Accounting:

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India ('Indian GAAP') and comply with the Accounting standards prescribed in Companies (Accounting Standards) Rules, 2006 which continue to apply under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014, and other relevant provisions of the Companies Act, 1956, to the extent applicable.

(b) Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities on the date of Financial Statements. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in future periods.

1.2 Tangible and Intangible Assets:

(a) Tangible Fixed Assets

Tangible Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

(b) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible asset are carried at cost less accumulated amortization and accumulated impairment loss, if any. Profit or loss on disposal of intangible asset is recognized in the Statement of Profit and Loss.

(c) Capital Work in Progress and Capital Advances

Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress.

(d) Depreciation and Amortization

Depreciation on tangible fixed assets is provided using the Straight-Line Method using the rates arrived at based on the useful lives estimated by the management. Due to the seizer of factory premises by the Provident Fund Authorities the management of the Company was unable to access to the asset register of Company to do the exercise to charge depreciation based on revised remaining useful life of the assets as per the revised schedule II of Company's Act 2013 and therefore, the amount of depreciation for the year is calculated on the basis of rates applied in the earlier years.

Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed five years from the date when the asset is available for use. If the persuasive evidence existence to the affect that useful life of an intangible asset exceed five years, the company amortizes the intangible asset over the best estimate of its useful life.

1.3 Revenue Recognition

There has not been any sale of goods and services during the period. Although revenue is recognized to the extent that is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

Sale of Goods:

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The company collects the sales tax and VAT on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the period.

Dividends:

Dividend income is recognized when the company's right to receive dividend is established.

1.4 Inventories

(a) Inventories are valued at the lower of cost and net realizable value except in the case of tools in stores and spares which are valued at cost and tools in tool crib which are valued at the book value.

(b) The cost of purchase material is determined on the FIFO method. Cost of inventory comprises all cost of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other cost incurred in bringing the inventory to their present location and condition.

(c) Work-in-progress and manufacturing goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.5 Investments:

Investments, which are readily realizable and indented to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued.

1.6 Retirement and other employee benefits:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provided fund is charged to the statement of profit and loss for the period when the contributions are due. Owing to the financial sickness, the Company has been irregular in depositing the provided contribution with the appropriate authorities. Any settlement/ dues of provident fund shall be paid as per order of competent authority.

The company operates gratuity plan for the benefit of its employees. The cost of providing benefit under gratuity is determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for gratuity plan are recognized in full in the period in which they occur in the statement of profit and loss.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

1.7 Provisions:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date adjusted to reflect the current best estimates.

1.8 Contingent Liability:

A contingent Liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

1.9 Earnings per share:

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average no. of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a right issue, share split, and reserve share split (consolidation of shares) that have changed the no. of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted EPS, the net profit or loss for the year attributable to equity shareholders and the weighted average no. of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.10 Cash and Cash Equivalents:

Cash and Cash Equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments (if any) with an original maturity of three months or less.

1.11 Income Tax:

a) Deferred Taxes: The Company has carry forward losses and unabsorbed depreciation available for set-off under the Income Tax Act, 1961. However, in view of present uncertainty regarding generation of sufficient future income, net deferred tax assets at the year end including related credit / charges for the year have not been recognized in these accounts on prudent basis.

b) Current Taxes: In view of carry forward losses, unabsorbed deprecation and having the status of a SICK INDUSTRIAL COMPANY declared by the BIFR, the Company does not expect any current tax liability for the Financial Years 2007-08 to 2014-15 (Assessment Years 2008-09 to 2015-16 and hence no provision has been made for current taxes for these years.

1.12 Measurement of EBITDA:

The company has opted to present earnings before interest(finance cost), tax, depreciation and amortization(EBITDA) as a separate line item on the face of the statement of Profit & Loss for the year. The Company measures EBITDA on the basis of profit/(loss) from continuing operations.