2. Significant Accounting Policies

2.01 Basis of preparation of financial statements:

The financial statements have been prepared on a going concern
basis under the historical cost convention, the applicable
Accounting Standards as notified under the Companies
(Accounting Standards) Rules, 2006 (“AS") and the relevant
provisions of the Companies Act, 1956 (“the Act") (which
continue to be applicable in respect of section 133 of the
Companies Act, 2013 in term of General Circular 15/2013 dated
13th September, 2013 of the Ministry of Corporate Affairs), as
adopted consistently by the Company.

The Company follows mercantile system of accounting and
recognizes significant items of income and expenditure on
accrual basis.

2.02 Classification of Assets and Liabilities as Current and Non¬
Current:

All assets and liabilities have been classified as current or non¬
current as per the Company’s operating cycle and other criteria
set out in the Schedule III of the Companies Act, 2013. Based
on the nature of products and the time between the acquisition
of assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle
as 12 months for the purpose of current and non-current
classification of assets and liabilities.

2.03 Use of estimates:

The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent
liabilities as of the date of the financial statements and the
reported amounts of revenue and expenses during the reported
period. The estimates and assumptions used in the accompanying
financial statements are based upon management’s evaluation
of the relevant facts and circumstances as of the date of financial
statements. Actual results may differ from the estimates used in
preparing the accompanying financial statements. Any revision
to accounting estimates is recognized prospectively in current
and future periods.

2.04 Property, plant and equipment :

Property, plant and equipment are carried at the cost of
acquisition or construction, less accumulated depreciation/
accumulated impairment. The cost of Property, plant and
equipment comprises of its purchase price, including import
duties and other non-refundable taxes or levies and any directly
attributable cost of bringing the asset to its working condition
for its intended use.

Property, plant and equipment which are not ready for intended
use as on the date of Balance Sheet are disclosed as “Capital
work-in-progress".

Gains/losses arising from retirement or disposal of fixed assets
which are carried at cost are recognised in the Statement of
Profit and Loss.

2.05 Depreciation & Amortization:

Depreciation on Property, plant and equipment is provided
using the Written Down Value Method based on the useful
lives of the assets as estimated by the management and
is charged to the Statement of Profit and Loss as per the
requirement of Schedule II of the Companies Act, 2013.
Intangible Assets are to be amortized on a Written Down Value
Method based on the estimated useful economic life.

The Company has used following useful lives of the

Property, Plant & Equipment to provide Depreciation.

2.06 Impairment of Assets :

Consideration is given at each balance sheet date to determine
whether there is any indication of impairment of the carrying
amount of the Company’s fixed assets. If any indication exists,
an asset’s recoverable amount is estimated. An impairment loss
is recognized whenever the carrying amount of an asset exceeds
its recoverable amount. The recoverable amount is the greater of
the net selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present
value based on an appropriate discount factor.

Reversal of impairment losses recognized in prior years is
recorded when there is an indication that the impairment losses
recognized for the asset no longer exists or has decreased.
However, the increase in carrying amount of an asset due to
reversal of an impairment loss is recognized to the extent it
does not exceed the carrying amount that would have been
determined (net of depreciation) had no impairment loss been
recognized for the asset in prior years.

2.07 Borrowing Cost :

Borrowing costs that are attributable to acquisition or
construction of qualifying assets are capitalized as a part of
cost of such assets upto the commencement of commercial
operations. A qualifying assets is the one that necessarily takes
substantial period of time to get ready for intended use. Other
borrowing costs are recorded as an expense in the year in which
they are incurred.

The amount of exchange difference not exceeding the difference
between interest on local currency borrowings and interest on
foreign currency borrowings is considered as borrowing costs.

2.08 Investment:

All long term investments are to be stated at cost. Provision for
diminution, if any, in the value of investments is to be made to
recognize a decline, other than temporary, in the opinion of the
management.

Current investments are to be carried at the lower of cost and
fair value, determined on a category-wise basis.

2.09 Inventories:

Finished goods:

Finished goods are valued at lower of cost and net realizable
value.

2.10 Revenue Recognition:

Revenue is recognized to the extent it is probable that the
economic benefits will flow to the Company and the revenue can
be reliably measured.

Revenue from sale of product:

Revenue is recognized when significant control is transferred
to the buyer,recovery of the consideration is probable,the
associated cost and possible return of goods can be estimated
reliably, there is no continuing management invlovement with
the goods and amount of revenue can be measured reilably.
Accordingly the time of recognition of revenue is dependent on
the specific terms agreed with the customer.

In case of sale of goods with customers, the Company recognizes
revenue when the goods are separately identified and ready for
physical transfer and the Company cannot use these goods for
any other purpose and the reason for such an arrangement is
substantive.

Revenue from rendering of Service :

Revenue from rendering of service is recognised as the service
is performed,either by the proportionate completion method or
the by the completed service contract method.Revenues from
services is recognized in accordance with the terms of the
relevant agreement(s) as generally accepted and agreed with the
customers.

Other Income:

The company has entered into lease agreement with its
subsidiaries for space allocation to develop their business area
by charging amount by way of Rent. The long term dues which
are not likely to be recoverable in future have been decided by
management for providing for write back/write off wherever
necessary. Interest income is recognized on a time proportionate
basis taking into account the amounts invested.

2.11 Foreign Currency Transactions:

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. Non Monetary Items
are recorded at the exchange rate prevailing as on the date of
transaction.

Subsequent recognition:

Monetary assets and liabilities such as foreign currency
receivables, payables, borrowings outstanding at the year-
end are translated at the year-end rate. Resultant exchange
difference arising on realisation / payment or translation at year
end is recognized as income or expense in the year in which they
arise.

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.

2.12 Taxation:

Income tax expense comprises current tax expense and deferred
tax.

Current Taxes :- Provision for current income-tax is recognized in
accordance with the provisions of the Income-tax Act, 1961 and
is made annually based on the tax liability after taking credit for
tax allowance and exemptions.

Deferred Taxes :- The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets is recognized for
the future tax consequence attributable to the timing differences
between the profits/ losses offered for income taxes and profits/
losses as per the financial statements. Deferred tax assets and
liabilities are measured using the tax rates and the tax laws
that have been enacted or substantively enacted at the balance
sheet date. Deferred tax assets are recognized only to the extent
there is reasonable certainty that the assets can be realized in
future; however, where there is unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets
are recognized only if there is a virtual certainty of realization
of such assets. Deferred tax assets are reviewed as at each
balance sheet date and written down or written up to reflect the
amount that is reasonable/virtually certain (as the case may be)
to be realized.