SIGNIFICANT ACCOUNTING POLICIES

Basis for brparation of financial statements,

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act ,2013 ,read with Rule 7 of the Companies (Accounts)Rules ,2014.The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year except for change in the accounting policy for debrciation.

The brparation of financial statements requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and notes thereto. Differences between estimates and act uals are recognized in the period in which they materialize.

1) Fixed Assets:

(a) Fixed assets are stated at acquisition cost less accumulated debrciation / amortization and cumulative impairment,

(b) Land purchased/acquired and under the possession of the company are treated as free hold land.

(c) Technical know-how / license fee relating to plant / facilities are capitalized as part of cost of the underlying asset.

(d) Income approach is adopted for accounting Government grants related to debrciable fixed assets. Grants utilized for acquisition of debrciable Fixed Assets are treated as Deferred Government Grants and the same is recognized in the Statement of Profit and Loss on a systematic and rational basis over the useful life of the assets.

(e) Debrciation:

(i) Debrciation is charged on Fixed Assets based on the useful lives of assets, brscribed under the Schedule II of the Companies Act 2013,The Company has adopted Straight Line method of debrciation for all the categories of assets, acquired on or after 01,04.2014. in absence of a provision or method of debrciation, in the Companies Act.2013.

Effective from 1st April, 2014, the Company has reassessed the useful life of its existing fixed assets and has charged debrciation over the remaining useful lives, after retaining residual value, in accordance with the transitional provisions contained in the Schedule II of the Companies Act 2013.

(iii) Residual value of 5% has been retained for all the Fixed Assets, which is in line with the provisions of the Schedule II.

(iv) Debrciation is charged @ 100% on the assets with acquisition value of less than Rs.5,000/-, the value being  immaterial, considering the size and nature of the business of the Company, (f) An asset is treated as impaired when the carrying amount of assets exceeds its recoverable value. Impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. When the recoverable amount of brviously impaired assets exceeds its carrying amount, the value of asset is reinstated by reversing the impairment loss considered in prior years limited to lower of its recoverable value or carrying amount at the debrciated historical cost.

2) Construction period expenses on Project:

(a) Revenue expenses exclusively attributable to projects incurred during construction period are capitalized. However, such expenses in respect of capital facilities being executed along with production / operation simultaneously are charged to revenue.

(b) Financing cost incurred during construction period on loans specifically borrowed and utilized for projects is capitalized up to the date of capitalization.

(c) Financing cost, if any, incurred on general borrowings used for projects is capitalized at the weighted average cost. The amount of such borrowings is determined after setting off the amount of internal accruals, if any.

III. Capital Stores:

Capital stores are valued at cost. Specific provision is made for likely diminution in value, wherever required.

IV. Capital Work in progress:

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

V. Intangible Assets:

a) Technical know-how / license fee relating to production process and process design are recognized as intangible assets and amortised on a straight line method over a period of 5 years or life of the underlying plant / facility whichever is earlier.

b) Expenditure incurred on Research and Development, other than capital account is charged to revenue.

c) Costs incurred on computer software purchased/developed resulting in future economic benefits, are capitalized as intangible assets and amortised over a period of 5 years.

VI Inventory valuation:

a) Raw materials and stores and spares are valued at or below cost. Cost being ascertained on moving weighted average method. In cases where there has been a decline in the price of imported and indigenous raw material and it is estimated the cost of finished product will exceed the net realizable value, the materials are written down to net realizable value.

b) Materials in process are not valued consistently.

c) Finished/Trading products are valued at lower of cost or net realizable value in the aggregate, product wise. Intermediate products are valued at lower of cost or net realizable value derived from finished products and saleable by-product at realizable value. Cost of Finished / semi-finished / intermediate products are determined based on annual average cost excluding interest and head office and administrative overheads. Cost of finished goods in warehouse includes freight and handling charges.

d) Materials in transit/under inspection are valued at cost.

VII Commitments: Capital

Estimated amount of contracts remaining to be executed on capital  accounts, above X. Five lakh in each case, are considered for  disclosure.

Other Commitments

Disclosure is considered in respect of those non-cancellable contractual commitments (i.e. cancellation of which will result in a penalty disproportionate to the benefits involved ) based on the professional judgment of the management which are material and relevant.

VIII Borrowing Cost:

Borrowing Costs that are specifically identified to the acquisition or construction of qualifying assets are capitalized as part of such asset, A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss,

IX Investments:

Long term investments are valued at cost, after providing for diminution in value if it is of a permanent nature. Current investments are valued (individually) at lower of cost and quoted/fair value.

X Revenue Recognition:

a) Sales are recognized on an accrual basis when all significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred.

b) Gross sales (net of returns) include excise duty, wherever applicable.

c) Recognition of subsidy is generally made on the basis of in principle recognition / approval/ settlement of claims by the  Government of India as per the policy in force.

d) Other income is recognized on an accrual basis.

e) Dividend income is recognized when right to receive dividend is established.

f) Interest income is recognized when no significant uncertainty as to its realization exists.

g) Scrap, salvaged / waste materials and sweepings are accounted for on realization.

h) Claims on underwriters, carriers and on Customs and Central Excise Departments are taken into account on acceptance. Insurance and other miscellaneous claims are recognized on receipt/ acceptance of claim. Contractual pass through incentives, benefits, etc. are recognized on receipt basis.

XI Excise Duty:

Excise duty is accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in stock. Closing stock value of finished goods includes excise duty payable / paid on such goods.

XII Foreign Currency Transactions:

a) Receivables and payables in foreign currency as on the reporting date including forward exchange contracts are restated at the rate brvailing atthat date.

b) The brmium in respect of forward exchange contracts is recognized over the life of the contracts.

c) Variations arising on account of fluctuations in foreign exchange rates are treated as revenue gain / (loss),

XIII Employee Benefits:

Short Term Employee Benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employee are recognised as an expense during the period when the employees render the services. Post-employment Benefits

a) Defined Contribution Benefits

The company's contribution to the Provident Fund is remitted to separate trust established for this purposes based on a fixed percentage of the eligible employees salary and charged to Statement of Profit and Loss. Shortfall, if any, in the fund assets based on the Government specified minimum rate of return will be made good by the company and charged to Statement of Profit and Loss.

b) Defined Benefit Plans

The company operates defined benefit plan for gratuity and leave encashment. The cost of providing such defined benefits is determined using the projected unit credit method of actuarial valuation made at the end of the year and the gratuity fund is administered through a fund maintained by insurance company.

Actuarial gain and losses in respect of post employment and other long term benefits are charged to statement of Profit and Loss. XIV Grants:

a) Government grants in the nature of promoters' contribution are credited to Capital reserve and treated as part of Shareholders funds.

b) In case of debrciable assets, the cost of the asset is shown at gross value and grant thereon is treated as Capital Grants which are recognized as income in the statement of Profit and Loss over the period and in the proportion in which debrciation is charged.

c) Revenue grants relating to revenue expenses are deducted from the respective expenses.

d) In respect of revenue grants released by Government, the treatments in Ihe accounts are considered as per the respective schemes notified by the Government. Other revenue grants relating to revenue expenses are considered as income and credited to statement of Profit and Loss.

XV Taxes:

a) Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

b) Deferred tax on account of timing difference between taxable income and accounting income is provided considering the tax rates and tax laws enacted or substantively enacted by the Balance Sheet date.

c) Deferred tax assets are not recognized unless, in the management judgment there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

XVI Cenvat:

Cenvat credit and VAT credit on eligible materials is recognised on receipt of such materials and Cenvat credit of eligible service tax is recognized on payment of service tax to the service provider.

XVII Segment Reporting:

The accounting policies adopted for segment reporting are in line  with the accounting policies of the company.

a) Revenue and expenses have been identified to segments on  the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under unallocable corporate expenses, b} Investments, advance towards investments and other advances, which are not allocable to segments, are excluded from segment capital employed.

XVIII Contract Operation:

a) In contract operations revenue is recognized on percentage of completion method. The stage of completion is ascertained on the basis of physical evaluation of respective contract activity on the reporting date.

b) Foreseeable losses on contract activities are recognized fully irrespective of the progress of work.

c) In the case of Total responsibility jobs/Deposit work/Cost plus contracts, contract revenue is determined by adding the aggregate cost plus fixed percentage fees there on as agreed with the Customer,

XIX Prior Period Adjustments:

Individual items of Income and Expenditure relating to a prior period and exceeding' One Lakh is accounted as a prior period item and disclosed accordingly.

XX Provisions, Contingent Liabilities and Contingent Assets:

a) Provision is recognised in the accounts when there is a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

b) Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Show Cause notices issued by various Government Authorities are not considered as Obligation. When the demand notices are raised against such show cause notices and are disputed by the company, these are classified as disputed obligations.

c) The treatment in respect of disputed obligations, in each case, is as under:

i) a provision is recognized in respect of brsent obligations where the outflow of resources is probable.

ii) all other cases are disclosed as contingent liabilities unless the Possibility of outflow of resources is remote.

d) Contingent assets are neither recognised nor disclosed in the financial statements.