^viii) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised only when there is a present obligation as a result of past events and when
a reliable estimate of the amount of obligation can be made. Contingent liability is disclosed for:

(1) Possible obligations which will be confirmed only by future events not wholly within the control
of the Company or (2) Present obligations arising from past events where it is not probable that an
outflow of resources will be required to settle the obligation or a reliable estimate of the amount of
the obligation can not be made.

Contingent Assets are not recognized in the financial statements since this may result in the
recognition of income that may never be realized.

^ix) Earnings per share

Basic earnings per share are computed using the weighted average number of equity shares
outstanding during the period. Diluted earnings per share are computed using the weighted average
number of equity and dilutive potential equity shares outstanding during the period.

^x) Segment reporting:

The Company identifies primary segments based on the dominant source, nature of risks and returns
and the internal organisation and management structure. The operating segments are the segments for
which separate financial information is available and for which operating profit amounts are evaluated
regularly by the executive management in deciding how to allocate resources and in assessing
performance.

xi) Property , Plant & Equipment’s

The Property, Plant & Equipment’s are recorded at cost of acquisition less accumulated depreciation.
Cost of acquisition comprises of purchase price and any attributable costs of bringing the assets to
their working condition for their intended use.

xi) Intangible Assets

Trademarks acquired by the Company are recognised as intangible assets at cost when it is probable
that future economic benefits will flow to the Company and the cost can be measured reliably.
Trademarks are amortised on a straight-line basis over their estimated useful life of 8 years. The
amortisation method and useful life are reviewed at the end of each financial year. Trademarks are
derecognised upon disposal or when no future economic benefits are expected from their use. Any
gain or loss arising on derecognition is recognised in the Statement of Profit and Loss.

xii) Depreciation / Amortisation

Depreciation on tangible fixed assets is provided on Stratigh Line Method at the rates specified in
Schedule II to the Companies Act, 2013. Depreciation on additions to fixed assets is provided on pro¬
rata basis from the date the asset is put to use. Depreciation on sale / deduction from fixed assets is
provided for up to the date of sale / deduction / scrapping, as the case may be. Assets taken on finance
lease are depreciated over the tenure of the lease. Assets costing Rs. 5,000 or less per item are fully
depreciated in the year of purchase.

xiii) Leases

Operating Lease payments are recognized as an expense in the Statement of Profit & Loss on a straight
line basis over the lease term. Assets under finance lease are capitalized at the Inception of lease term
at the lower of fair value of the lease property and present value of minimum lease payment. Assets
under operating lease are included under Fixed Assets. Lease income on these assets is recognized in
the statement of Profit & Loss.

xiv) Impairment

The carrying values of assets are reviewed at each reporting date to determine if there is indication of
any impairment. If any indication exists, the assets recoverable amount is estimated. For assets that
are not yet available for use, the recoverable amount is estimated at each reporting date. An
impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit
exceeds its recoverable amount. Impairment losses are recognised in the Profit and Loss Account.
An impairment loss is reversed if there has been a change in the estimates used to determine the
recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined net of depreciation or
amortisation, if no impairment loss had been recognised.

xv) Government Grants & Subsidies

Grants & Subsidies from the Government are recognized when there is reasonable assurance that the
Company will comply with the conditions attached to them and the grant / subsidy will be received.
Government Grants related to depreciable assets are treated as deferred income and recognized in the
Statement of Profit & Loss in equal amounts over the expected useful life of the related assets.
Government Grants related to revenue are recognized on systematic basis in statement of Profit &
Loss over the period necessary to match them with the related costs which they are intended to
compensate.

xvi) Inventories

Inventories are valued at lower of average cost and net realizable value
Raw materials, stores and spares and packing materials

Lower of cost or net realisable value. Cost is determined on Average basis and includes all the cost
incurred in bringing the goods to be their present location and condition.

Finished goods

Lower of cost and net realisable value. Cost includes cost of raw materials, direct overheads which
are incurred to bring the inventories to their present location and condition.

xvii) Retirement and other employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as
short-term employee benefits. Benefits such as salaries, wages, bonus etc. are recognised in the Profit
and Loss Account in the period in which the employee renders the related service. Post employment
and other long term employee benefits are recognized as an expense in the Profit and Loss account for
the year in which the employee has rendered services.

xviii) Gratuity

Gratuity is a post-employment benefit and is in the nature of defined benefit plan. The liability
recognised in the balance sheet in respect of gratuity is the present value of the defined benefit
obligation as at the balance sheet date.

The defined benefit/obligations calculated at the balance sheet date in line with AS 15 and any gains
or losses are recognised immediately in the statement of profit and loss