RKB Agro Industries Ltd. कंपली की लेखा नीति

Mar 31, 2024

2 Material accounting policies

2.1 Statement of Compliance

These Financial Statements have been prepared in accordance with Indian Accounting Standards as
notified under the Section 133 of the Companies Act, 2013. (“the Act”), Companies (Indian Accounting
Standards) Rules, 2015, (as amended) and other relevant provisions of the Act, as applicable.

2.2 Basis of preparation and presentation

These Financial Statements have been prepared on the historical cost basis, except for certain
Financial Instruments which are measured at fair values at the end of each reporting period. Historical
cost is generally based on the fair value of the consideration given in exchange for goods and
services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. regardless of whether
that price is directly observable or estimated using another valuation technique. In estimating the fair
value of an asset or a liability, the Company takes into account the characteristics of the asset or
liability if market participants would take those characteristics into account when pricing the asset or
liability at the measurement date. Fair value for measurement and/or disclosure purposes in these
Financial statements is determined on such a basis, leasing transactions that are within the scope of
Ind AS 116, and measurements that have some similarities to fair value but are not fair value, such
as net realizable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for Financial Reporting purposes, fair value measurement are categorised into level 1,2
or 3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as under:

i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date.

ii) Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and

iii) Level 3 inputs are unobservable for the asset or liability.

2.3 The material accounting policies are set out below :

2.3.1Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured, regardless of when the payment is being
made. Revenue is measured at the fair value of the consideration received or receivable net of
discounts, taking into account contractually defined terms and excluding taxes or duties collected
on behalf of the government.

Sale of Products

Revenue is measured at the fair value of the consideration received or receivable.

Sale of goods is recognised net of returns and trade discounts, when the risk and rewards of
ownership are transferred to the customers. Sales exclude amounts recovered towards GST.
Revenue is also recognised on sale of goods in case where the delivery is kept pending at the
instance of the customer, the risk and rewards are transferred and customer takes title and accepts
billing as per usual payment terms.

Sale of Service

Income from services rendered is recognised based on the agreements/arrangements with the
concerned parties and when services are rendered.

2.3.2Other Income

a) Dividend Income from Investments is recognised in the year in which the right to receive the
payment is established

b) Interest income from the Financial asset is recognised when it is probable that the economic
benefits will flow to the Company and can be measured reliably. Interest income is recognised on
a time proportion basis taking into account the amount outstanding and at the effective interest
rate applicable, which is the rate exactly discounts estimated future cash receipts through the
expected life of the Financial assets to that asset’s net carrying amount on initial recognition.

2.3.3Leasing

a) Where the Company is a lessee

Leases are classified as finance leases whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee. All other leases are classified as operating
leases. The Company’s significant leasing arrangements are in respect of operating leases for
premises that are cancellable in nature. The lease rentals under such agreements are recognised
in the Statement of Profit and Loss as per the terms of the lease. Rental expense from operating
leases is generally recognised on a straight-line basis over the term of the relevant lease. Where
the rentals are structured solely to increase in line with expected general inflation to compensate
for the lessor’s expected inflationary cost increases, such increases are recognised in the year in
which such benefits accrue. We have examined the applicability of IND AS-116 and as the Company
is not having any non -cancellable leases, IND AS-116 is not applicable to the Company.

b) Where the Company is a lessor

Leases in which the Company does not transfer substantially all the risks and benefits of ownership
of the assets are classified as operating leases. Assets subject to operating leases are included in
fixed assets. Lease income is recognised in the Statement of Profit & Loss on accrual basis as per
the terms of contract.

2.3.4Foreign Currency

The functional currency of the Company is the Indian Rupee.

Foreign currency transactions are recorded at exchange rates prevailing on the date of the
transaction or at rates that closely approximates the rate at the date of transactions. Foreign
currency denominated monetary assets and liabilities are restated into the functional currency
using exchange rates prevailing on the balance sheet date. Gains and losses arising on settlement
and restatement of Foreign currency denominated monetary assets and liabilities are recognised
in the Statement of Profit and Loss. Non-monetary assets and liabilities that are measured in
terms of historical cost in Foreign currencies are not translated.

2.3.5Employee benefits

(a) Defined Contribution Plans

Payment to Defined Contribution Plans are recognized as an expense when employees have rendered
service entitling them to the contributions. The Company’s contributions to the Recognized Provident
Fund and Pension maintained with the Central Government and Employee State Insurance scheme
(“ESI”) are considered as Defined Contribution Plans. The Company has no further obligations for
future Provident Fund, Pension Fund and ESI benefits, other than its annual contributions.

(b) Defined Benefit Plans
Gratuity:

Since the Company is accounting gratuity to employees on cash basis, disclosures as required
under Ind AS-19 is not made.

2.3.6Earnings per Share

The Group presents Basic and Diluted Earnings per Share (“EPS”). Basic EPS is calculated by
dividing the profit or loss attributable to equity shareholders by the weighted average number of
equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or
loss attributable to equity shareholders and the weighted average number of equity shares
outstanding for the effects of all dilutive potential equity shares. The Company did not have any
potentially dilutive securities in any of the periods presented.

2.3.7Income Taxes

Income Tax expense comprises current tax expense and deferred tax. Current and deferred tax
are recognised in profit or loss, except when they relate to items that are recognised in Other
Comprehensive Income or directly in equity, in which case, the current and deferred tax are also
recognised in Other Comprehensive Income or directly in equity, respectively.

Current Taxes

The Current Income Tax expense includes Income taxes payable by the Company, for the year as
determined in accordance with the applicable tax rates and the provisions of Income Tax Act, 1961.

Deferred Taxes

Tax on income for the current period is determined on the basis of taxable income estimated in
accordance with provisions of Income Tax Act, 1961. Deferred tax is recognized for the future tax
consequences of the temporary differences between the tax base and the carrying values of
assets and liabilities. Deferred tax assets are recognized only if there is a reasonable certainty
that they will be realized only if there is a reasonable certainty that they will be realized in future
and are reviewed every year. The tax effect is calculated on the accumulated timing differences at
the end of the year based on enacted or substantively enacted tax rates.

2.3.8Propertv, Plant and Equipment

Property, Plant and Equipment(PPE) are stated at cost, less accumulated depreciation (other
than freehold land) and impairment loss, if any. Cost includes purchase price, attributable
expenditure incurred in bringing the asset to its working condition for the intended use and cost of
borrowing till the date of capitalisation in the case of assets involving material investment and
substantial lead time. Land is stated on fair value less depreciation (on the basis of revaluation
made by an approved valuer)

Properties in the course of construction for production, supply or administrative purposes are
carried at cost, less any recognised impairment loss. Depreciation of these assets, on the same basis
as other property assets, commences when the assets are ready for their intended use.

Depreciation is provided on the straight-line method as per the useful life mentioned in the
below table. The estimated useful lives and residual values are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis. Depreciation is
not recorded on capital work-in-progress until construction and installation are complete and the asset
is ready for its intended use. Land has an unlimited useful life and therefore is not depreciated. Assets
costing Rs 5,000 and below are depreciated over a period of one year.

The useful life is assessed based on technical advice taking into account the nature of the
asset, the estimated usage of the asset, the operation condition of the asset, past history of
replacement, maintenance support etc.

An item of Property, Plant and Equipment is derecognised 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 de¬
recognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the item) is included in the profit & loss in the period in which the item is
derecognised. Any tangible asset, when determined of no further use, is deleted from the gross
block of the assets.

2.3.9Impairment of assets

The Company assesses at each reporting date whether there is an indication that an asset/cash generating
unit may be impaired. If any indication exists the Company estimates the recoverable amount of such
assets and if carrying amount exceeds the recoverable amount, impairment is recognised. The recoverable
amount is the higher of the Net Selling Price and its Value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using an appropriate discount factor. When there
is indication that previously recognised impairment loss no longer exists or may have decreased such
reversal of impairment loss is recognised in the profit or loss.

2.3.10 Inventories

Raw Materials, bought out items, W.I.P & Intermediary products, Finished goods, Stores and
spare parts and Packing Materials are valued at lower of cost and net realisable value.

Cost in respect of Raw materials, Packing materials, Stores & spares, Traded Goods and bought
out items are determined on FIFO method.

However, raw materials and other items held for use in production of finished goods 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.

Cost in respect of Finished goods, Intermediary products & Work-in-Progress is determined on
absorption costing.

By-Products are valued at estimated realisable value.

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Mar 31, 2023

2 Significant accounting policies

2.1 Statement of Compliance

These Financial Statements have been prepared in accordance with Indian Accounting Standards as notified underthe Section 133 of the Companies Act, 2013. (“the Act”), Companies (Indian Accounting Standards) Rules, 2015, (as amended) and other relevant provisions of the Act, as applicable.

2.2 Basis of preparation and presentation

These Financial Statements have been prepared on the historical cost basis, except for certain Financial Instruments which are measured atfairvalues at the end of each reporting period. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these Financial statements is determined on such a basis, leasing transactions that are within the scope of IndAS 116, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for Financial Reporting purposes, fair value measurement are categorised into level 1,2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as under:

i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

ii) Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

iii) Level 3 inputs are unobservable for the asset or liability.

2.3 The principal accounting policies are set out below:

2.3.1 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable net of discounts, taking into account contractually defined terms and excluding taxes or duties collected on behalf of the government.

Sale of Products

Revenue is measured at the fair value of the consideration received or receivable.

Sale of goods is recognised net of returns and trade discounts, when the risk and rewards of ownership are transferred to the customers. Sales exclude amounts recovered towards GST. Revenue is also recognised on sale of goods in case where the delivery is kept pending at the instance of the customer, the risk and rewards are transferred and customer takes title and accepts billing as per usual payment terms.

Sale of Service

Income from services rendered is recognised based on the agreements/arrangements with the concerned parties and when services are rendered.

2.3.20ther Income

a) Dividend Income from Investments is recognised in the year in which the right to receive the payment is established.

b) Interest income from the Financial asset is recognised when it is probable that the economic benefits will flow to the Company and can be measured reliably. Interest income is recognised on a time proportion basis taking into account the amount outstanding and at the effective interest rate applicable, which is the rate exactly discounts estimated future cash receipts through the expected life of the Financial assets to that asset’s net carrying amount on initial recognition.

2.3.3Leasing

a) Where the Company is a lessee

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. The Company’s significant leasing arrangements are in respect of operating leases for premises that are cancellable in nature. The lease rentals under such agreements are recognised in the Statement of Profit and Loss as per the terms of the lease. Rental expense from operating leases is generally recognised on a straight-line basis overthe term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue. We have examined the applicability of INDAS-116 and as the Company is not having any non -cancellable leases, INDAS-116 is not applicable to the Company

b) Where the Company is a lessor

Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the assets are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Statement of Profit & Loss on accrual basis as per the terms of contract.

2.3.4Foreign Currency

The functional currency of the Company is the Indian Rupee.

Foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction or at rates that closely approximates the rate at the date of transactions. Foreign currency denominated monetary assets and liabilities are restated into the functional currency using exchange rates prevailing on the balance sheet date. Gains and losses arising on settlement and restatement of Foreign currency denominated monetary assets and liabilities are recognised in the Statement of Profit and Loss. Non-monetary assets and liabilities that are measured in terms of historical cost in Foreign currencies are not translated.

2.3.5Employee benefits

(a) Defined Contribution Plans

Paymentto Defined Contribution Plans are recognized as an expense when employees have rendered service entitling them to the contributions. The Company’s contributions to the Recognized Provident Fund and Pension maintained with the Central Government and Employee State Insurance scheme (“ESI”) are considered as Defined Contribution Plans. The Company has no further obligations for future Provident Fund, Pension Fund and ESI benefits, other than its annual contributions.

(b) Defined Benefit Plans Gratuity:

Since the Company is accounting gratuity to employees on cash basis, disclosures as required under Ind AS-19 is not made.

2.3.6Earnings per Share

The Group presents Basic and Diluted Earnings per Share (“EPS”). Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares. The Company did not have any potentially dilutive securities in any of the periods presented.

2.3.7lncome Taxes

Income Tax expense comprises current tax expense and deferred tax. Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in Other Comprehensive Income or directly in equity, in which case, the current and deferred tax are also recognised in Other Comprehensive Income or directly in equity, respectively.

Current Taxes

The Current Income Tax expense includes Income taxes payable by the Company, for the year as determined in accordance with the applicable tax rates and the provisions of Income Tax Act, 1961.

Deferred Taxes

Tax on income for the current period is determined on the basis of taxable income estimated in accordance with provisions of Income Tax Act, 1961. Deferred tax is recognized for the future tax consequences of the temporary differences between the tax base and the carrying values of assets and liabilities. Deferred tax assets are recognized only if there is a reasonable certainty that they will be realized only if there is a reasonable certainty that they will be realized in future and are reviewed every year. The tax effect is calculated on the accumulated timing differences at the end of the year based on enacted or substantively enacted tax rates.

2.3.8Property, Plant and Equipment

Property, Plant and Equipment(PPE) are stated at cost, less accumulated depreciation (other than freehold land) and impairment loss, if any. Cost includes purchase price, attributable expenditure incurred in bringing the asset to its working condition forthe intended use and cost of borrowing till the date of capitalisation in the case of assets involving material investment and substantial lead time. Land is stated on fair value less depreciation (on the basis of revaluation made by an approved valuer)

Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

Depreciation is provided on the straight-line method as per the useful life mentioned in the below table. The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use. Land has an unlimited useful life and therefore is not depreciated. Assets costing Rs 5,000 and below are depreciated over a period of one year.

The useful life is assessed based on technical advice taking into account the nature of the asset, the estimated usage of the asset, the operation condition of the asset, past history of replacement, maintenance support etc.

An item of Property, Plant and Equipment is derecognised 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 de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the profit & loss in the period in which the item is derecognised. Any tangible asset, when determined of no further use, is deleted from the gross block of the assets.

2.3.9lmpairment of assets

The Company assesses at each reporting date whetherthere is an indication that an asset/cash generating unit may be impaired. If any indication exists the Company estimates the recoverable amount of such assets and if carrying amount exceeds the recoverable amount, impairment is recognised. The recoverable amount is the higher of the Net Selling Price and its Value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using an appropriate discount factor. When there is indication that previously recognised impairment loss no longer exists or may have decreased such reversal of impairment loss is recognised in the profit or loss.

2.3.10 Inventories

Raw Materials, bought out items, W.I.P & Intermediary products, Finished goods, Stores and spare parts and Packing Materials are valued at lower of cost and net realisable value.

Cost in respect of Raw materials, Packing materials, Stores & spares, Traded Goods and bought out items are determined on FIFO method.

However, raw materials and other items held for use in production of finished goods 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.

Cost in respect of Finished goods, Intermediary products & Work-in-Progress is determined on absorption costing.

By-Products are valued at estimated realisable value.

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Mar 31, 2014

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

These financial statements have been prepared on the historical cost convention in accordance with generally accepted accounting principles in India, the applicable Accounting Standards and the provisions of the Companies Act, 1956.

2. FIXED ASSETS:

Entire Land of the company and Buildings of Cotton Unit are stated on the basis of revaluation and all other Fixed Assets are stated at historical cost less accumulated depreciation..

3. DEPRECIATION:

Depreciation is provided on Straight Line Method at the rates and in the manner as prescribed by schedule XIV to the Companies Act, 1956.

Depreciation on incremental value due to revaluation is charged to revaluation reserve.

4. INVESTMENTS:

Investments are held for long-term and are stated at Cost. Diminution, if any, in the value of investments, other than temporary, is duly provided for.

5. INVENTORIES:

Raw Materials, bought out items, W.I.P & Intermediary products, Finished goods, Stores and spare parts and Packing Materials are valued at lower of cost and net realisable value. Cost in respect of Raw materials, Packing materials, Stores & spares bought out items are determined on FIFO method. Cost in respect of finished goods, intermediary products & work in progress is determined on absorption costing. By-products are valued at estimated realisable value.

6. EMPLOYEES'' BENEFITS:

i) Defined Contribution Plans:

The company has defined contribution plans for employees comprising of Govt, administered Provident Fund/Pension plans. The company has no obligations apart from monthly contributions as per relevant rules. The company has been making monthly contributions as per the rules & the same are charged to Statement of Profit & Loss on accrual basis.

ii) Defined Benefit Plans:

a) Gratuity:

Retirement gratuity to employees is accounted for as and when paid.

b) Compensated absences:

The Company does not have any scheme of compensated absences.

iii) Short Term Employee benefits:-

All employee benefits which are falling within 12 months of rendering the services are recognized to the Statement of profit & loss in the period in which the employee renders the related services.

7. IMPAIRMENT OF ASSETS:

The Carrying amounts of Assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment ofthe carrying amount ofthe Company''s Assets. If any indication exists, the recoverable amount of such Assets is estimated. Impairment Loss is recognized wherever the carrying amount of the Assets exceeds its recoverable amount. ‘

After impairment, depreciation is provided on the revised carrying amount of the assets over the remaining useful life. When there is indication that impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss.

8. TAXATION:

Current tax is determined as amount of tax payable estimated as per the provisions ofthe Income Tax Act 1961.

Deferred tax asset/ Liability is recognized for the future tax consequences ofthe timing difference between the tax basis and the carrying values of assets and liabilities. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized in future and are reviewed every year. However Deferred Tax asset relating to unabsorbed business loss/ Depreciation is recognised only when there is virtual certainty, that they will be realized in future. The tax effect is calculated on the accumulated timing differences at the end ofthe year based on enacted or substantively enacted tax rates.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of future adjustment of income tax liability, is not being recognized as an asset in the books as there is no convincing evidence that the company will pay normal income tax in future.]

9. EARNINGS PER SHARE

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

10. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made ofthe amount ofthe obligations. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a past obligation or present obligation in respect of which the likelihood of outflow of resource is remote, no provision or disclosure is made. Contingent Assets are neither recognized nor disclosed in the financial statements.

11. LEASES

i. Where the company is a lessee:

Lease payments under operating leases are recognised as an expense in the Statement of Profit & Loss as incurred.

ii. Where the company is a lessor:

Leases in which the company does not transfer substantially all the risks and benefits of ownership ofthe assets are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Statement of Profit & Loss on accrual basis as per the terms of contract.

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Mar 31, 2010

SYSTEM OF ACCOUNTING :

The financial statements are generally prepared on accrual concept as a going concern.

FIXED ASSETS

Land, Buildings and Plant & Machinery other than Oil Mill Unit acquired up to 31.03.1994 are stated at the amounts revalued based on approved valuer's report. Land, Building and Plant & Machinery of Oil Mill Unit and all other fixed Assets are stated at historical cost.

DEPRECIATION

Depreciation is provided on straight-line method at the rates and in the manner as prescribed by schedule XIV to the companies Act, 1956 as amended from time to time on all the assets including existing assets.

Depreciation on incremental value due to revaluation is charged to revaluation reserve.

INVESTMENTS

Investments are long-term investments and are stated at Cost. Diminution in the value of investments, if permanent in nature, is duly provided for.

INVENTORIES

Stores and spare parts, Packing Materials, Finished goods, Intermediary / By-products and Raw Materials are valued at lower of cost and net realisable value.

Scrap is valued at estimated realisable value.

EMPLOYEES' BENEFITS

i) Defined Contribution Plans :

The company has defined contribution plans for employees comprising of Govt, administered Provident Find / Pension plans & ESIC. The company has no obligations apart from monthly contributions as per relevant rules. The company has been making monthly contributions as per the rules & the same are charged to Profit & Loss account on accrual basis.

ii) Defined Benefit Plans :

a) Gratuity:

Provision for retirement gratuity to employees is being made on accrual basis in respect of those employees who have completed qualifying period of service.

b) Compensated absences :

The Company does not have any scheme of compensated absences.

iii) Short Term Employee benefits :

All employee benefits which are falling within 12 months of rendering the services are recognized to the profit & loss account in the period in which the employee renders the related services.

MATERIALS CONSUMED

Shortages/ Excesses on physical verification and Profit/Loss on sale of Raw Materials remain adjusted in the Raw Materials consumption account.

IMPAIRMENT OF ASSETS

The Carrying amounts of Assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's Assets. If any indication exits, the recoverable amount of such Assets is estimated. Impairment Loss is recognized wherever the carrying amount of the Assets exceeds its recoverable amount.

Taxation :

Current tax is determined as amount of tax payable estimated as per the provisions of the Income Tax Act 1961. Deferred Tax is recognized subject to consideration of prudence in respect of deferred tax assets, arising on timing differences being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Tax rates are adopted on the basis of enacted or substantively enacted tax laws by the Balance Sheet date.

EARNINGS PER SHARE

Earnings per share are calculated by dividing the net profit or loss for the period attributable to equity share by the number of equity shares outstanding during the period. For the purpose of calculating Diluted Earnings per share, the net profit or loss for the period attributable to equity shareholders and the number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

Provisions, Contingent Liabilities and Contingent Assets :

Provisions in respect of present obligations arising out of past events are made in the accounts when reliable estimates can be made of the amount of the obligations. Contingent liabilities, if material, are disclosed by way of Notes to Accounts. Contingent Assets are not recognized and disclosed in the financial statements.

LEASES

Assets given under operating lease for temporary period is cancelable / renewable by mutual consent and significant portion of the risks and rewards of ownership are retained by the lessor. Operating lease rentals are accounted to the profit & loss account on accrual basis