Accounting Policies of Kovilpatti Lakshmi Roller Flour Mills Ltd. Company

Mar 31, 2023

Significant Accounting Policies

a) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/
non-current classification.

An asset is treated as current when it is:

i) Expected to be realised or intended to be sold or consumed in normal operating
cycle

ii) Held primarily for the purpose of trading

iii) Expected to be realised within twelve months after the reporting period, or

iv) Cash or cash equivalent unless restricted from being exchanged or used to settle
a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

i) It is expected to be settled in normal operating cycle

ii) It is held primarily for the purpose of trading

iii) It is due to be settled within twelve months after the reporting period, or

iv) There is no unconditional right to defer the settlement of the liability for at least
twelve months after the reporting period

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their
realisation in cash and cash equivalents. The Company has identified approximately 5
months as its average operating cycle.

b) Fair value measurement

The Company has applied the fair value measurement wherever necessitated at
each reporting period.

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. The
fair value measurement is based on the presumption that the transaction to sell the
asset or transfer the liability takes place either:

i) In the principal market for the asset or liability;

ii) In the absence of a principal market, in the most advantageous market for the
asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest.

A fair value measurement of a non - financial asset takes into account a market
participant''s ability to generate economic benefits by using the asset in its highest and
the best use or by selling it to another market participant that would use the asset in its
highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances
and for which sufficient data are available to measure fair value, maximizing the use
of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorized within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 : Quoted (unadjusted) market prices in active market for identical assets or
liabilities;

Level 2 : Valuation techniques for which the lowest level input that is significant to the
fair value measurement is directly or indirectly observable; and

Level 3 : Valuation techniques for which the lowest level input that is significant to the
fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring
basis, the Company determines whether transfers have occurred between levels in the
hierarchy by re-assessing categorization (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each reporting period.

The Company has designated the respective team leads to determine the policies
and procedures for both recurring and non - recurring fair value measurement. External
valuers are involved, wherever necessary with the approval of Company''s board of
directors. Selection criteria include market knowledge, reputation, independence and
whether professional standards are maintained.

For the purpose of fair value disclosure, the Company has determined classes of assets
and liabilities on the basis of the nature, characteristics and risk of the asset or liability
and the level of the fair value hierarchy as explained above. The component wise fair
value measurement is disclosed in the relevant notes.

c) Revenue RecognitionSale of goods

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 on sale of goods is recognised when the risk
and rewards of ownership is transferred to the buyer, which generally coincides with the
despatch of the goods or as per the inco-terms agreed with the customers.

Revenue is measured at the fair value of the consideration received or receivable,
taking into account contractually defined terms of payment. It comprises of invoice
value of goods including excise duty and after deducting discounts, volume rebates
and applicable taxes on sale. It also excludes value of self-consumption.

Sale of services

Income from sale of services is recognised when the services are rendered as per the
terms of the agreement and when no significant uncertainty as to its determination or
realisation exists.

Export entitlements

Export entitlements from Government authorities are recognised in the statement
of profit and loss when the right to receive credit as per the terms of the scheme
is established in respect of the exports made by the Company, and where there is
no significant uncertainty regarding the ultimate collection of the relevant export
proceeds.

Interest Income

Interest income is recorded using the effective interest rate (EIR). EIR is the rate that
exactly discounts the estimated future cash payments or receipts over the expected
life of the financial instrument or a shorter period, where appropriate, to the gross
carrying amount of the financial asset or to the amortised cost of a financial liability.
When calculating the effective interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of the financial instrument (for
example, prepayment, extension, call and similar options) but does not consider the
expected credit losses.

Dividend income

Dividend income is recognized when the company''s right to receive dividend is
established by the reporting date, which is generally when shareholders approve the
dividend.

d) Property, plant and equipment and capital work in progress
Presentation

Property, plant and equipment and capital work in progress are stated at cost, net of
accumulated depreciation and accumulated impairment losses, if any. Such cost
includes the cost of replacing part of the plant and equipment and borrowing costs
of a qualifying asset, if the recognition criteria are met. When significant parts of plant
and equipment are required to be replaced at intervals, the Company depreciates
them separately based on their specific useful lives. All other repair and maintenance
costs are recognised in profit or loss as incurred.

Advances paid towards the acquisition of tangible assets outstanding at each balance
sheet date, are disclosed as capital advances under other non-current assets and
the cost of the tangible assets not ready for their intended use before such date, are
disclosed as capital work in progress.

Component Cost

All material/ significant components have been identified and have been accounted
separately. The useful life of such component are analysed independently and
wherever components are having different useful life other than plant they are part of,
useful life of components are considered for calculation of depreciation.

The cost of replacing part of an item of property, plant and equipment is recognised
in the carrying amount of the item if it is probable that the future economic benefits
embodied within the part will flow to the Company and its cost can be measured
reliably. The costs of repairs and maintenance are recognised in the statement of profit
and loss as incurred.

Machinery spares/ insurance spares that can be issued only in connection with an item
of fixed assets and their issue is expected to be irregular are capitalised. Replacement
of such spares is charged to revenue. Other spares are charged as revenue expenditure
as and when consumed.

Derecognition

Gains or losses arising from derecognition of property, plant and equipment are
measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and loss when the
asset is derecognized.

e) Depreciation on property, plant and equipment

Depreciation is the systematic allocation of the depreciable amount of an asset over
its useful life on a straight line method. The depreciable amount for assets is the cost of
an asset, or other amount substituted for cost, less 5% being its residual value.

Depreciation is provided on straight line method, over the useful lives specified in
Schedule II to the Companies Act, 2013.

Depreciation for PPE on additions is calculated on pro-rata basis from the date of such
additions. For deletion/disposals, the depreciation is calculated on pro-rata basis up to
the date on which such assets have been discarded / sold. Additions to fixed assets,
costing '' 5000 each or less are fully depreciated.

The residual values, estimated useful lives and methods of depreciation of property,
plant and equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate.

f) Intangible assetsIntangible assets acquired separately

Intangible assets acquired separately are measured on initial recognition at cost.
The cost of a separately acquired intangible asset comprises (a) its purchase price,
including import duties and non-refundable purchase taxes, after deducting trade
discounts and rebates; and (b) any directly attributable cost of preparing the asset for
its intended use.

Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.

Useful life and amortisation of intangible assets

The useful lives of intangible assets are assessed as either finite or indefinite. Intangible
assets with finite lives are amortised over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an intangible asset with a
finite useful life are reviewed at least at the end of each reporting period.

The amortisation expense on intangible assets with finite lives is recognised in the statement
of profit and loss unless such expenditure forms part of carrying value of another asset.

Intangible assets with indefinite useful lives are not amortised, but are tested for
impairment annually. The assessment of indefinite life is reviewed annually to determine
whether the indefinite life continues to be supportable. If not, the change in useful life
from indefinite to finite is made on a prospective basis.

Subsequent cost and measurement

Subsequent costs are capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditures, including
expenditure on internally-generated intangibles, are recognised in the statement of
profit and loss as incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported
at cost less accumulated amortisation and accumulated impairment losses, on the
same basis as intangible assets that are acquired separately.

The amortisation expense on intangible assets with finite lives is recognised in the
statement of profit and loss unless such expenditure forms part of carrying value of
another asset.

g) Inventories

Inventories are carried at the lower of cost and net realisable value. Cost includes cost
of purchase and other costs incurred in bringing the inventories to their present location
and condition. Net realisable value is the estimated selling price in the ordinary course
of business, less estimated costs of completion and the estimated costs necessary
to make the sale. Raw materials and stores & consumables are valued at weighted
average rate.

h) Financial Instruments

Financial assets and financial liabilities are recognised when an entity becomes a
party to the contractual provisions of the instruments.

Financial assetsInitial recognition and measurement

All financial assets are recognised initially at fair value. However, in the case of financial
assets not recorded at fair value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset. Purchases or sales of financial
assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified on the
basis of their contractual cash flow characteristics and the entity''s business model of
managing them.

Financial assets are classified in four categories:

• Debt instruments at amortised cost

• Debt instruments at fair value through other comprehensive income (FVTOCI)

• Debt instruments, derivatives and equity instruments at fair value through profit or
loss (FVTPL)

• Equity instruments measured at fair value through other comprehensive income
(FVTOCI)

Debt instruments at amortised cost

The Company classifies a debt instrument as at amortised cost, if both the following
conditions are met:

a) The asset is held within a business model whose objective is to hold assets for
collecting contractual cash flows; and

b) Contractual terms of the asset give rise on specified dates to cash flows that are
solely payments of principal and interest (SPPI) on the principal amount outstanding.

Such financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included in finance income in the profit or loss. The losses
arising from impairment are recognised in the profit or loss.

Debt instrument at FVTOCI

The Company classifies a debt instrument at FVTOCI, if both of the following criteria are
met:

a) The objective of the business model is achieved both by collecting contractual
cash flows and selling the financial assets, and

b) The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured as at each reporting
date at fair value. Fair value movements are recognized in the other comprehensive
income (OCI). However, the Company recognizes finance income, impairment losses
and reversals and foreign exchange gain or loss in the profit and loss statement. On
derecognition of the asset, cumulative gain or loss previously recognised in OCI is
reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using the EIR method.

Debt instrument at FVTPL

The Company classifies all debt instruments, which do not meet the criteria for
categorization as at amortized cost or as FVTOCI, as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all
changes recognized in the profit and loss.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity
instruments which are held for trading are classified as at FVTPL. Where the Company
makes an irrevocable election of equity instruments at FVTOCI, it recognises all
subsequent changes in the fair value in OCI, without any recycling of the amounts
from OCI to profit and loss, even on sale of such investments.

Equity instruments included within the FVTPL category are measured at fair value with
all changes recognized in the profit and loss.

Financial assets are measured at FVTPL except for those financial assets whose
contractual terms give rise to cash flows on specified dates that represents SPPI, are
measured as detailed below depending on the business model:

A financial asset is primarily derecognised when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or
has assumed an obligation to pay the received cash flows in full without material
delay to a third party under a ''pass-through'' arrangement; and either (a) the
Company has transferred substantially all the risks and rewards of the asset, or (b)
the Company has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or
has entered into a pass-through arrangement, it evaluates if and to what extent it
has retained the risks and rewards of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of the asset, nor transferred control of
the asset, the Company continues to recognise the transferred asset to the extent of
the Company''s continuing involvement. In that case, the Company also recognises
an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the maximum
amount of consideration that the Company could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL)
model for measurement and recognition of impairment loss on the following financial
assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost
e.g., loans, debt securities, deposits, trade receivables and bank balance.

b) Financial assets that are debt instruments and are measured at FVTOCI

c) Trade receivables or any contractual right to receive cash or another financial
asset that result from transactions that are within the scope of Ind AS 11 and Ind AS
18.

The Company follows ''simplified approach'' for recognition of impairment loss
allowance on:

• Trade receivables or contract revenue receivables; and

• All lease receivables resulting from transactions within the scope of Ind AS 17

The application of simplified approach does not require the Company to track
changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime
Expected Credit Loss (ECL) at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the
Company determines that whether there has been a significant increase in the credit
risk since initial recognition. If credit risk has not increased significantly, 12 months ECL
is used to provide for impairment loss. However, if credit risk has increased significantly,
lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves
such that there is no longer a significant increase in credit risk since initial recognition,
then the entity reverts to recognising impairment loss allowance based on 12-month
ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events
over the expected life of a financial instrument. The 12 months ECL is a portion of the
lifetime ECL which results from default events that are possible within 12 months after
the reporting date.

ECL is the difference between all contractual cash flows that are due to the Company
in accordance with the contract and all the cash flows that the entity expects to
receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the
cash flows, the Company considers all contractual terms of the financial instrument
(including prepayment, extension, call and similar options) over the expected life of
the financial instrument and Cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.

ECL allowance (or reversal) recognized during the period is recognized as income/
expense in the statement of profit and loss. This amount is reflected under the head
''other expenses'' in the profit and loss. The balance sheet presentation of ECL for various
financial instruments is described below:

• Financial assets measured as at amortised cost, contractual revenue receivables
and lease receivables: ECL is presented as an allowance, which reduces the net
carrying amount. Until the asset meets write-off criteria, the Company does not
reduce impairment allowance from the gross carrying amount.

• Debt instruments measured at FVTOCI: Since financial assets are already reflected
at fair value, impairment allowance is not further reduced from its value. Rather,
ECL amount is presented as ''accumulated impairment amount'' in the OCI.

For assessing increase in credit risk and impairment loss, the company combines
financial instruments on the basis of shared credit risk characteristics with the objective
of facilitating an analysis that is designed to enable significant increases in credit risk to
be identified on a timely basis.

For impairment purposes, significant financial assets are tested on individual basis at
each reporting date. Other financial assets are assessed collectively in groups that
share similar credit risk characteristics. Accordingly, the impairment testing is done on
the following basis:

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL and
as at amortised cost.

Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is
included as finance costs in the statement of profit and loss.

All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, financial guarantee contracts and derivative
financial instruments.

The measurement of financial liabilities depends on their classification, as described
below:

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading, if they are incurred for the purpose

of repurchasing in the near term. This category also includes derivative financial
instruments entered into by the Company that are not designated as hedging
instruments in hedge relationships as defined by Ind AS 109. Separated embedded
derivatives are also classified as held for trading unless they are designated as effective
hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own
credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to
profit and loss. However, the company may transfer the cumulative gain or loss within
equity. All other changes in fair value of such liability are recognised in the statement
of profit or loss. The company has not designated any financial liability as at fair value
through profit and loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised as well as through the EIR amortisation
process.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign exchange forward
and options contracts to mitigate the risk of changes in exchange rates on foreign
currency exposures. The counterparty for these contracts is generally a bank.

Derivatives fair valued through profit or loss

This category has derivative financial assets or liabilities which are not designated as
hedges.

Although the Company believes that these derivatives constitute hedges from an
economic perspective, they may not qualify for hedge accounting under Ind AS 109,
Financial Instruments. Any derivative that is either not designated a hedge, or is so
designated but is ineffective as per Ind AS 109, is categorized as a financial asset or
financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and
attributable transaction costs are recognized in net profit in the Statement of Profit and
Loss when incurred. Subsequent to initial recognition, these derivatives are measured at
fair value through profit or loss and the resulting exchange gains or losses are included
in other income. Assets / liabilities in this category are presented as current assets /
current liabilities if they are either held for trading or are expected to be realized within
12 months after the Balance Sheet date.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another
from the same lender on substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or modification is treated as
the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognised in the statement of profit
or loss.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial
recognition. After initial recognition, no reclassification is made for financial assets
which are equity instruments and financial liabilities. For financial assets which are
debt instruments, a reclassification is made only if there is a change in the business
model for managing those assets. Changes to the business model are expected
to be infrequent. The Company''s senior management determines change in the
business model as a result of external or internal changes which are significant to the
Company''s operations. Such changes are evident to external parties. A change in
the business model occurs when the Company either begins or ceases to perform an
activity that is significant to its operations. If the Company reclassifies financial assets, it
applies the reclassification prospectively from the reclassification date which is the first
day of the immediately next reporting period following the change in business model.
The Company does not restate any previously recognised gains, losses (including
impairment gains or losses) or interest.

i) Foreign currency transactions and translations
Transactions and balances

Transactions in foreign currencies are initially recorded by the Company at the
functional currency spot rates at the date at which the transaction first qualifies for
recognition. However, for practical reasons, the Company uses an average rate, if the
average approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the
functional currency spot rates of exchange at the reporting date. Exchange differences
arising on settlement or translation of monetary items are recognised in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rates at the dates of the initial transactions. Non¬
monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value is determined. The gain or loss arising
on translation of non-monetary items measured at fair value is treated in line with the
recognition of the gain or loss on the change in fair value of the item (i.e., translation

differences on items whose fair value gain or loss is recognised in OCI or profit or loss
are also recognised in OCI or profit or loss, respectively).

The Company enters into forward exchange contract to hedge its risk associated with
Foreign currency fluctuations. The premium or discount arising at the inception of a
forward exchange contract is amortized as expense or income over the life of the
contract. In case of monetary items which are covered by forward exchange contract,
the difference between the year end rate and rate on the date of the contract is
recognized as exchange difference. Any profit or loss arising on cancellation of a
forward exchange contract is recognized as income or expense for that year.

j) Borrowing Costs

Borrowing cost include interest computed using Effective Interest Rate method,
amortisation of ancillary costs incurred and exchange differences arising from
foreign currency borrowings to the extent they are regarded as an adjustment to the
interest cost.

Borrowing costs that are directly attributable to the acquisition, construction, production
of a qualifying asset are capitalised as part of the cost of that asset which takes
substantial period of time to get ready for its intended use. The Company determines
the amount of borrowing cost eligible for capitalisation by applying capitalisation rate
to the expenditure incurred on such cost. The capitalisation rate is determined based
on the weighted average rate of borrowing cost applicable to the borrowings of the
Company which are outstanding during the period, other than borrowings made
specifically towards purchase of the qualifying asset. The amount of borrowing cost
that the Company capitalises during the period does not exceed the amount of
borrowing cost incurred during that period. All other borrowings costs are expensed in
the period in which they occur.

Interest income earned on the temporary investment of specific borrowings pending
their expenditure on qualifying assets is deducted from the borrowing costs eligible for
capitalisation. All other borrowing costs are recognised in the statement of profit and
loss in the period in which they are incurred.

k) TaxesCurrent income tax

Current income tax assets and liabilities are measured at the amount expected to
be recovered from or paid to the taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or substantively enacted, at the
reporting date in the countries where the Company operates and generates taxable
income.

Current income tax relating to items recognised outside profit or loss is recognised
outside profit or loss (either in other comprehensive income or in equity). Current tax
items are recognised in correlation to the underlying transaction either in OCI or directly
in equity. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future
economic benefits in the form of adjustment to future tax liability, is recognised as an
asset viz. MAT Credit Entitlement, to the extent there is convincing evidence that the
Company will pay normal Income tax and it is highly probable that future economic
benefits associated with it will flow to the Company during the specified period. The
Company reviews the "MAT Credit Entitlement" at each Balance Sheet date
and writes down the carrying amount of the same to the extent there is no longer
convincing evidence to the effect that the Company will pay normal Income tax
during the specified period.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences.

Deferred tax assets are recognised to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses can be utilised. Where there is
deferred tax assets arising from carry forward of unused tax losses and unused tax
created, they are recognised to the extent of deferred tax liability.

The carrying amount of deferred tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the year when the asset is realised or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside
profit or loss (either in other comprehensive income or in equity). Deferred tax items are
recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred taxes
relate to the same taxable entity and the same taxation authority.

l) Retirement and other employee benefitsShort-term employee benefits

A liability is recognised for short-term employee benefit in the period the related
service is rendered at the undiscounted amount of the benefits expected to be paid
in exchange for that service.

Defined contribution plans

Retirement benefit in the form of provident fund is a defined contribution scheme.
The Company has no obligation, other than the contribution payable to the provident
fund and superannuation fund. The Company recognizes contribution payable to
the provident fund scheme as an expense, when an employee renders the related
service. If the contribution payable to the scheme for service received before the
balance sheet date exceeds the contribution already paid, the deficit payable to the
scheme is recognized as a liability after deducting the contribution already paid. If the
contribution already paid exceeds the contribution due for services received before
the balance sheet date, then excess is recognized as an asset to the extent that the
pre-payment will lead to, for example, a reduction in future payment or a cash refund.

Defined benefit plans

The Company operates a defined benefit gratuity plan in India, which requires
contributions to be made to a separately administered fund. The cost of providing
benefits under the defined benefit plan is determined using the projected unit credit
method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset
ceiling, excluding amounts included in net interest on the net defined benefit liability
and the return on plan assets (excluding amounts included in net interest on the net
defined benefit liability), are recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings through OCI in the period in which
they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Compensated absences

As per the policy of the Company, compensated absences are not entitled to be
carried forward to the subsequent financial year and paid within the reporting period.
Accordingly, no liability towards compensated absences are recognised in these
financial statements.

Other long term employee benefits

Liabilities recognised in respect of other long-term employee benefits are measured at
the present value of the estimated future cash outflows expected to be made by the
Company in respect of services provided by the employees up to the reporting date.

m) Leases(a) As a lessee:

At inception of a contract, the company assesses whether the contract is, or
contains, a lease. A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for
consideration.

Initially, as a lessee, the company recognises a right-of-use asset and a lease
liability and measure the right-of-use asset at cost. The company measures the
lease liability at the present value of the lease payments that are not paid at that
date. The lease payments shall be discounted using the interest rate implicit in
the lease, if that rate can be readily determined. If that rate cannot be readily
determined, the company shall use the lessee''s incremental borrowing rate. After
the commencement date, the company measures the right-of-use asset applying
a cost model.

Subsequently, the company measures the lease liability by:

(a) increasing the carrying amount to reflect interest on the lease liability;

(b) reducing the carrying amount to reflect the lease payments made; and

(c) remeasuring the carrying amount to reflect any reassessment or lease
modifications or to reflect revised in-substance fixed lease payments.

The Company elects not to apply the requirements to either short-term leases or
leases for which the underlying asset is of low value, the company recognises the
lease payments associated with those leases as an expense on either a straight¬
line basis over the lease term or another systematic basis. The Company applies
another systematic basis if that basis is more representative of the pattern of the
lessee''s benefit. Short term leases are leases with a lease term of 12 months or less.

(b) As a Lessor

As a lessor, the company classifies each of its leases as either an operating lease
or a finance lease. A lease is classified as a finance lease if it transfers substantially
all the risks and rewards incidental to ownership of an underlying asset. A lease is
classified as an operating lease if it does not transfer substantially all the risks and
rewards incidental to ownership of an underlying asset.

In case of a financial lease, at the commencement date, the company recognises
assets held under a finance lease in its balance sheet and present them as a
receivable at an amount equal to the net investment in the lease. Subsequently,
the company recognises finance income over the lease term, based on a pattern
reflecting a constant periodic rate of return on the lessor''s net investment in the
lease. Any modification to a finance lease shall be accounted as a separate lease
if the modification increases both the scope of the lease and the consideration for
the lease.

In case of an operating lease, the company recognises lease payments from
operating leases as income on either a straight-line basis or another systematic
basis or the company applies another systematic basis if that basis is more
representative of the pattern in which benefit from the use of the underlying asset
is diminished. In case of any modification to an operating lease, the company
accounts for as a new lease from the effective date of the modification, considering
any prepaid or accrued lease payments relating to the original lease as part of the
lease payments for the new lease.

The respective leased assets are included in their balance sheet based on their
nature.

n) Impairment of non financial assets

The Company assesses, at each reporting date, whether there is an indication that
an asset may be impaired. If any indication exists, or when annual impairment testing
for an asset is required, the Company estimates the asset''s recoverable amount. An
asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU)
fair value less costs of disposal and its value in use. Recoverable amount is determined
for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. When the carrying amount
of an asset or CGU exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.

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Mar 31, 2016

a METHOD OF ACCOUNTING

The Company follows mercantile system of accounting and recognize income and expenditure on accrual basis.

b FIXED ASSETS

Interest and commitment charges on term loans specifically availed for acquisition of assets for modernization is capitalized until commencement of production.

Depreciation on assets has been provided based on the useful life as specified in Schedule II of the Companies Act, 2013 under straight line method.

Exchange rate fluctuations on assets acquired under foreign currency loan are capitalized.

Recoverable amount of every asset is higher of its carrying amount and its value in use.

c INVENTORIES

Inventories other than finished goods are valued at cost. Costs include expenses incurred in bringing the inventories up to the present location and condition and is net of mod vat. Finished goods are valued at lower of cost and net realizable value.

d INVESTMENTS

Investments are meant to be long term investments and are stated at cost. Diminution in the value of investments other than temporary in nature are provided for.

e FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are accounted at exchange rate prevailing on the date of transactions.

Exchange gains/losses are recognized in the Statement of Profit and Loss except in respect of liabilities incurred for acquisition of fixed asset.

f EMPLOYEES BENEFITS

Future liability towards gratuity to employees is determined on the basis of actuarial valuation as at the year end and funded through a separate approved trust administered by LIC of India. Contributions to Provident Fund, ESI and Family Pension Fund being fixed contributions are absorbed in the accounts.

g INCOME TAX

i) Current Tax

Current tax has been provided as per the Income Tax Act, 1961

ii) Deferred Tax

Deferred Taxation is accounted for in respect of all timing differences on a liability method.

14 During the year the Company has accounted for the deferred taxation which represents the amount determined and considered up to the Balance Sheet date, in accordance with Accounting Standard 22 issued by the Institute of Chartered Accountants of India, to neutralize the tax effect of "timing differences" between taxable income & depreciation and accounting income & depreciation that originate in one period and are capable of reversal in subsequent periods.

15 Company has initiated the process of obtaining confirmation from suppliers who have registered themselves under the "Micro, Small and Medium Enterprises Development Act, 2006". Based on the information and evidence available with the company, there are no dues to micro and small enterprises, outstanding as on 31.03.2016.

16 Related party disclosure

The following are the transactions with related parties in terms of AS 18 issued by the Institute of Chartered Accountants of India. Reimbursement of expenses has not been treated as related party transactions.

19 Discontinuing operation AS 24 20 (a to d)

On 12th November, 2014, the Board of Directors announced a plan for closure of the Textile Division which represents a separate business segment as per Segment Reporting. The disposal is consistent with the Company''s long-term strategy to focus its activities.

20 Comparative figures for previous year have been re-classified and re-grouped wherever necessary to confirm to this year''s classifications.

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Mar 31, 2015

A METHOD OF ACCOUNTING

The Company follows mercantile system of accounting and recognise income and expenditure on accrual basis.

b FIXED ASSETS

Interest and commitment charges on term loans specifically availed for acquisition of assets for modernisation is capitalised untill commencement of production. Exchange rate fluctuations on assets acquired under foreign currency loan are capitalised.

Depreciation on assets has been provided based on the useful life as specified in Schedule II of the Companies Act, 2013 under straight line method In accordance with Part A of Schedule II of the Companies Act, 2013 the company has reassessed the remaining useful life of the assets with effect from 1st April, 2014.

In respect of the assets that have completed the useful life as on 1st April, 2014 the net residual value of Rs. 25.37 lakhs (net of deferred tax) has been adjusted to the opening balance of the retained earnings.

Recoverable amount of every asset is higher of its carrying amount and its value in use

c INVENTORIES

Inventories other than finished goods are valued at cost. Costs include expenses incurred in bringing the inventories upto the present location and condition and is net of modvat. Finished goods are valued at lower of cost and net realisable value.

d INVESTMENTS

Investments are meant to be long term investments and are stated at cost. Diminution in the value of investments other than temporary in nature are provided for.

e FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are accounted at exchange rate prevailing on the date of transactions.

Exchange gains/losses are recognised in the Statement of Profit and Loss except in respect of liabilities incurred for acquisition of fixed asset.

f EMPLOYEES BENEFITS

(I) Future liability towards gratuity to employees is determined on the basis of actuarial valuation as at the year end and funded through separate approved trust administed by LIC of India. Contributions to Provident Fund, ESI and Family Pension Fund being fixed contributions are absorbed in the accounts.

g INCOME TAX

i) Current Tax

Current tax has been provided as per the Income Tax Act, 1961

ii) Deferred Tax

Deferred Taxation is accounted for in respect of all timing differences on a liability method.

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Mar 31, 2014

A. METHOD OF ACCOUNTING

The Company follows mercantile system of accounting and recognise income and expenditure on accrual basis.

b FIXED ASSETS

Interest and commitment charges on term loans specifically availed for acquisition of assets for modernisation is capitalised untill commencement of production.

Exchange rate fluctuations on assets acquired under foreign currency loan are capitalised.

Depreciation on assets has been provided on Straight Line Basis at the rates specified in Schedule XIV of the Companies Act, 1956, as amended.

Recoverable amount of every asset is higher of its carrying amount and its value in use.

c INVENTORIES

Inventories other than finished goods are valued at cost. Costs include expenses incurred in bringing the inventories upto the present location and condition and is net of modvat. Finished goods are valued at lower of cost and net realisable value.

d INVESTMENTS

Investments are meant to be long term investments and are stated at cost. Diminution in the value of investments other than temporary in nature are provided for.

e FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are accounted at exchange rate prevailing on the date of transactions.

Exchange gains/losses are recognised in the Statement of Profit and Loss except in respect of liabilities incurred for acquisition of fixed asset.

f EMPLOYEES BENEFITS

Future liability towards gratuity to employees is determined on the basis of actuarial valuation as at the year end and funded through separate approved trust administed by LIC of India. Contributions to Provident Fund, ESI and Family Pension Fund being fixed contributions are absorbed in the accounts.

g INCOME TAX

i) Current Tax

Current tax has been provided as per the Income Tax Act, 1961

ii) Deferred Tax

Deferred Taxation is accounted for in respect of all timing differences on a liability method.

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Mar 31, 2013

A METHOD OF ACCOUNTING

The Company follows mercantile system of accounting and recognise income and expenditure on accrual basis.

b FIXED ASSETS

Interest and commitment charges on term loans specifically availed for acquisition of assets for modernisation is capitalised untill commencement of production.

Exchange rate fluctuations on assets acquired under foreign currency loan are capitalised.

Depreciation on assets has been provided on Straight Line Basis at the rates specified in Schedule XIV of the Companies Act, 1956, as amended.

Recoverable amount of every asset is higher of its carrying amount and its value in use.

c INVENTORIES

Inventories other than finished goods are valued at cost. Costs include expenses incurred in bringing the inventories upto the present location and condition and is net of modvat. Finished goods are valued at lower of cost and net realisable value.

d FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are accounted at exchange rate prevailing on the date of transactions. Exchange gains/losses are recognised in the Statement of Profit and Loss except in respect of liabilities incurred for acquisition of fixed asset.

e EMPLOYEES BENEFITS

Future liability towards gratuity to employees is determined on the basis of actuarial valuation as at the year end and funded through separate approved trust administed by LIC of India. Contributions to Provident Fund, ESI and Family Pension Fund being fixed contributions are absorbed in the accounts.

f INCOME TAX

i) Current Tax

MAT credit relating to earlier years to the extent of Rs.43,53,986/- has been taken into account during the year. Provision for current tax Rs.13,80,082/- has been adjusted against eligible MAT credit entitlement.

ii) Deferred Tax

Deferred Taxation is accounted for in respect of all timing differences on a liability method.

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Mar 31, 2012

A METHOD OF ACCOUNTING

The Company follows mercantile system of accounting and recognise income and expenditure on accrual basis.

b FIXED ASSETS

Interest and commitment charges on term loans specifically availed for acquisition of assets for modernisation is capitalised untill commencement of production.

Exchange rate fluctuations on assets acquired under foreign currency loan are capitalised.

Depreciation on assets has been provided on Straight Line Basis at the rates specified in Schedule XIV of the Companies Act, 1956, as amended.

Recoverable amount of every asset is higher of its carrying amount and its value in use.

c INVENTORIES

Inventories other than finished goods are valued at cost. Costs include expenses incurred in bringing the inventories upto the present location and condition and is net of modvat. Finished goods are valued at lower of cost and net realisable value.

d INVESTMENTS

Investments are meant to be long term investments and are stated at cost. Diminution in the value of investments other than temporary in nature are provided for.

e FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are accounted at exchange rate prevailing on the date o f transactions.

Exchange gains/losses are recognised in the Statement of Profit and Loss except in respect of liabilities incurred for acquisition of fixed asset.

f EMPLOYEES BENEFITS

Future liability towards gratuity to employees is determined on the basis of actuarial valuation as at the year end and funded through separate approved trust. Contributions to Provident Fund, ESI and Family Pension Fund being fixed contributions are absorbed in the accounts.

g DEFERRED TAX

Deferred Taxation is accounted for in respect of all timing differences on a liability method.

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Mar 31, 2010

A METHOD OF ACCOUNTING

The Company follows mercantile system of accounting and recognise income and expenditure on accrual basis.

b FIXED ASSETS

Interest and commitment charges on term loans specifically availed for acquisition of assets for modernisation is capitalised untill commencement of production.

Exchange rate fluctuations on assets acquired under foreign currency loan are capitalised. Depreciation on assets has been provided on Straight Line Basis at the rates specified in Schedule XIV of the Companies Act, 1956, as amended.

Recoverable amount of every asset is higher of its carrying amount and its value in use.

c INVENTORIES

Inventories other than finished goods are valued at cost. Costs include expenses incurred in bringing the inventories upto the present location and condition and is net of modvat. Finished goods are valued at lower of cost and net realisable value.

d INVESTMENTS

Investments are meant to be long term investments and are stated at cost. Diminution in the value of investments other than temporary in nature are provided for.

e FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are accounted at exchange rate prevailing on the date of transactions.

Exchange gains/losses are recognised in the Profit and Loss Account except in respect of liabilities incurred for acquisition of fixed asset.

f EMPLOYEES BENEFITS

(I) Future liability towards gratuity to employees is determined on the basis of actuarial valuation as at the year end and funded through separate approved trust. Contributions to Provident Fund, ESI and Family Pension Fund being fixed contributions are absorbed in the accounts.

(ii) Voluntary Retirement lumpsum compensation paid to workmen are written off over a period of five years commencing from the year in which the said payment was made to the workmen, since the benefits of such payment accrue over a period of five years.

g DEFERRED TAX

Deferred Taxation is accounted for in respect of all timing differences on a liability method.