b) Property, plant & equipment and Depreciation:

(i) Property, plant & equipment are stated at cost
of acquisition or construction after reducing
accumulated depreciation. Cost comprises
the purchase price and any attributable cost of
bringing the assets to their working condition for
intended use.

(ii) Depreciation is provided on written down value
method using the rates arrived at based on the
useful lives as specified in the Schedule II of the
Act or estimated by the management.

(iii) Depreciation on assets addition is provided on
pro-rata basis with reference to the date of ready
to use of assets.

(iv) Any gain or loss on disposal of an item of property,
plant and equipment is recognised in the
Statement of Profit and Loss.

c) Intangible assets and Amortization:

Intangible assets acquired separately are measured
on initial recognition at cost. Intangible assets are
amortised on a written down value method over their
estimated useful lives. Following initial recognition,
intangible assets are carried at cost less accumulated
amortisation and accumulated impairment losses, if
any. Internally generated intangible assets, excluding
capitalised development costs, are not capitalised and
expenditure is reflected in the Statement of Profit and
Loss in the year in which the expenditure is incurred.

d) Inventories:

The inventories are valued at lower of cost or net
realizable value after providing for cost of obsolescence
whenever considered necessary. However, materials
and other items held for use in the production of
inventories are not written down below cost if the
finished products in which they will be incorporated
are expected to be sold at or above cost. The cost
comprises of costs of purchase, duties and taxes (other
than those subsequently recoverable) other costs
incurred in bringing the inventories to their present
location and condition. Work-in-progress and finished
goods cost include material cost, cost of conversion and
other costs incurred in bringing the inventories to their
present location and condition, wherever applicable.

e) Cash and cash equivalents:

Cash and cash equivalents for the purpose of cash flow
statement comprise cash on hand and cash at bank
including fixed deposit with original maturity period
of three months or less and short term highly liquid
investments with an original maturity of three months or
less.

f) Foreign Currency Transactions:

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. 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.

Exchange differences arising on the settlement of
monetary items, or on reporting such monetary items
of Company 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 expense in the year in which they arise.

Forward Exchange Contracts not intended for trading
or speculation purposes:

The premium or discount arising at the inception of
forward exchange contracts is amortised as expense
or income over the life of the contract. Exchange
differences on such contracts are recognised in the
Statement of Profit and Loss in the year in which the
exchange rates change. Any profit or loss arising on
cancellation or renewal of forward exchange contract is
recognised as income or as expense for the year.

g) Borrowing Costs:

Borrowing costs that directly attributable to the
acquisition, construction or production of a qualifying
asset are capitalized as part of the cost of such asset.
A qualifying asset is an asset that necessarily takes a
substantial period of time to get ready for its intended
use. All other borrowing costs are expensed in the period
they occur. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the
borrowing of funds.

h) Operating Lease:

Leases where the lessor effectively retains substantially
all the risks and benefits of ownership of the leased
item are classified as operating leases. Operating lease

payments are recognized as an expense in the Statement
of Profit and Loss on a systematic basis, which is more
representative of time pattern and linked with company's
revenue.

i) Revenue Recognition:

Revenue in respect of Sales is recognized when
the substantial risks and rewards of ownership are
transferred to the buyer under the terms of the contract
with customers. Sales amount is net of returns and
discounts / rebates/ mark down / unrealized revenue on
part of outstanding sales on Sale or Return (SOR) basis
considering previous trend of sales returns.

Interest income is recognized on time proportion basis
at applicable interest rate. Export benefit in the form of
duty draw back, rebate on state levies are recognized on
receipt basis.

j) Employees benefits:

(i) Defined contribution plan

The Company makes defined contribution to
Employee Provident Fund and ESI which are
recognised in the Statement of Profit and Loss on
accrual basis.

(ii) Defined benefit Plan

The Company's liabilities under Payment of Gratuity
Act are determined on the basis of actuarial
valuation made at the end of each financial year
based on various estimates. The obligation is
measured at the present value of the estimated
future cash flows using a discount rate based on
the market yield on government securities where
the terms of government securities are consistent
with the estimated terms of the defined benefit
obligations at the Balance Sheet date. The Company
recognises the net obligation of a defined plan
in its Balance Sheet as an asset or liability. Gains
and losses through re-measurements of the net
defined benefit liability/(asset) are recognised in
the Statement of Profit & Loss. Gratuity Liability is
funded through scheme administered by registered
life insurance company.

k) Taxes on income:

Tax expense comprises of current and deferred tax.

Provision for current tax is made on the basis of
estimated taxable income for the current accounting
year in accordance with the Income-tax Act, 1961.

The deferred tax for timing differences between the
book and tax profits for the year is accounted for, using
the tax rates and laws that have been substantively
enacted as of the Balance Sheet date. Deferred tax
assets arising from timing differences are recognised
to the extent there is reasonable certainty that these
would be realised in future. 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, that sufficient future taxable
income will be available against which deferred tax
asset can be realised. Any such write-down is reversed
to the extent that it becomes reasonably certain, that
sufficient future taxable income will be available. In case
of unabsorbed losses and unabsorbed depreciation,
all deferred tax assets are recognised only if there is
virtual certainty supported by convincing evidence that
they can be realised against future taxable profit. At
each Balance Sheet date the Company reassesses the
unrecognised deferred tax assets. MAT Credits in the
form of unused tax credits are not recognised in the
books based on the prudence concept.

l) Impairment of Assets:

The carrying amounts of assets are reviewed at
each balance sheet date if there is any indication of
impairment based on internal/external factors. An
impairment loss is recognized wherever the carrying
amount of an asset exceeds its recoverable amount.
The recoverable amount is the greater of the asset's net
selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value at the weighted average cost of capital.
After impairment, depreciation is provided on the
revised carrying amount of the assets over its remaining
useful life.

m) Earning per Share:

Basic earnings per share are calculated by dividing
the net profit for the year attributable to equity
shareholders (after deducting attributable taxes) by the
weighted-average number of equity shares outstanding
during the period. The weighted-average number of
equity shares outstanding during the period and for
all periods presented is adjusted for events such as
bonus issue; bonus element in a rights issue to existing
shareholders that have changed the number of equity
shares outstanding, without a corresponding change in
resources.

n) Statement of Cash Flows :

The Statement of Cash flows is prepared in accordance
with the indirect method prescribed in Accounting
Standard- 3 issued by The Institute of Chartered
Accountants of India.