B. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAPs) to comply with the Accounting Standards notified under the
Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act,
2013.

The Financial Statements are prepared as a Going concern concept under the historical cost convention on an
accrual basis unless specifically stated.

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 amount of assets and liabilities
as at the balance sheet date, the results of operation during the reported period and disclosure of contingent
liabilities as on the reporting date. Management believes that the estimates used in the preparation of the financial
statements are prudent and reasonable and are in their best knowledge of current event and actions. Actual results
could differ from these estimates and differences between actual results and estimates are recognized in the period
in which the results are known or materialize. Significant estimates used by the management in the preparation of
these financial statements include provision for employee benefits, estimates of the economic useful life of plant
and equipment, provision for expenses, provisioning for taxation etc.

The following significant accounting policies are adopted in the preparation and presentation of these financial

1. Revenue Recognition

a) Revenue is recognized to the extent that is probable that the economic benefits will flow to the Com pany and the
revenue can be reliably measured.

b) Revenue from sale of goods is recognized when the significant risk and rewards are transferred as per the terms of
sale. Revenues are recorded at invoice value.

c) Income in respect of interest, insurance claims, export benefits, subsidy etc. is recognized to the extent the
company is reasonably certain of its ultimate realization.

2. Inventories

Inventories comprising of raw materials, work in progress and finished goods are valued at lower of cost or net
realizable value. Cost here represents landed cost including custom duty in case of imports and is net of duty
which is convertible or refundable. Cost of inventories is determined on FIFO basis. Net realizable value is the
estimate of the selling price in the ordinary course of business less further cost expected to be incurred for its
completion and disposal. The work in progress and finished goods cost includes raw material cost, variable cost
and manufacturing overheads.

3. Foreign Currency Transaction:

a) Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction.

b) Short term monetary items denominated in foreign currencies (such as cash, receivable, payable etc.) outstanding
at the year end, are translated /re-converted at the year-end exchange rate unless covered by a forward contract.

c) Any gain or loss arising on settlement and / or translation of short-term monitory transaction in foreign currency is
accounted for in the statement of Profit and Loss.

4. Employee Benefits

- Defined Benefit Plans

For Defined Benefit Plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with
actuarial valuations being carried out at the date of each statement of financial position.

The retirement benefit obligations recognized in the statement of financial position represents the present value of
the defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this calculation is
limited to the present value of available refunds and reductions in future contributions to the scheme.

5. Borrowing Costs

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of
borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the
cost of the respective asset. All other borrowing costs are expensed in the period they occur.

6. Accounting for Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid
to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted, at the reporting date.

a) Deferred income taxes reflect the impact of timing differences between taxable income and accounting income
originating during the current year and reversal of timing differences for the earlier years. Deferred ax is measured
using the tax rates and the tax laws enacted or substantively enacted at the reporting date.

b) Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are 'ecognized for
deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be realized. In situations where the Company has
unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual
certainty supported by convincing evidence that they can be realized against future taxable profits.

The carrying amount of deferred tax assets are reviewed at each reporting 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.

7. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during
the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to
participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number
of equity shares outstanding during the period is adjusted for events such as bonus issue, share split and reverse share
split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding
change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of
all dilutive potential equity shares.

8. Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment
losses. The initial cost of a property, plant and equipment comprises its purchase price, any costs directly
attributable to bringingthe property, plantand equipment into the locationand condition necessary for it to be
capable of operating in the manner intended by management.An item of property, plant and equipment is
derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the
asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined
as the difference between the sales proceeds and the carrying amount of the asset and is recognized in statement of
profit and loss.

The Company provides depreciation on items of property, plant and equipment on Written Down Value (WDV)
Method based on useful life specified as below:

Depreciation amount for asset is the cost of an asset less its estimated residual value. In case of impairment
depreciation is provided on revised carrying amount over its remaining useful life.

9. Intangible Assets

Intangible assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/ depletion.
All costs, including financing costs till commencement of commercial production, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations attributable to the intangible assets are capitalised.
Depreciation on Intangible assets is calculated on Written down value method at useful life of 10 years.