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Accounting Policies of VTM Ltd. Company

Mar 31, 2019

1. Significant Accounting Policies

a) Current versus eon-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 3 months as its 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:

1) 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 reassessing 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 Recognition

Sale 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 dispatch 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.

Power Generation

Power generated from windmills that are covered under wheeling and banking arrangement with the State Electricity Board/ Electricity Distribution Companies are consumed at factories. The monetary values of such power generated that are captivity consumed are not recognised as revenue.

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.

Sale of scrap

Scrap sale is recognised at the fair value of consideration received or receivable upon transfer of significant risk and rewards. It comprises of invoice value of goods including excise duty excluding applicable taxes on sale.

Interest Income

Interest income is recorded using the effective interest rate (EIR) method. 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.

Rental Income

Rental income from operating lease is recognised on a straight line basis over the term of the relevant lease, if the escalation is not a compensation for increase in cost inflation index.

Dividend income

Dividend income is recognized when the companyâs 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 long term loans and advances 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 for our plant 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.

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 written down value 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 Rs.5,000 each or less are fully depreciated retaining its residual value.

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

f) 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. Costs are determined on weighted average method as follows:

(i) Raw materials, packing materials and consumables: At purchase cost including other cost incurred in bringing materials/consumables to their present location and condition.

(ii) Work-in-process and intermediates: At material cost, conversion costs and appropriate share of production overheads

(iii) Finished goods: At material cost, conversion costs and an appropriate share of production overheads. Excise Duty is exempted on finished grey goods.

g) Financial Instruments

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

Financial assets

Initial 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 are also added to the cost 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.

For purposes of subsequent measurement, 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 classifying the 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:

Derecognition

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

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 FVTOCIc)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 EJR. 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 âaccumulated impairment amountâ 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:

Financial liabilities

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 installments.

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 / loss are not subsequently transferred to profit and toss. However, the company may transfer the cumulative gain or loss within equity. AH 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 arc 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 !nd AS 109, is categorized as a financial asset or financial liability, at fair value through profit or toss.

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.

The following table shows various reclassification and how they are accounted for:

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet, if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

h) 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.

I) 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.

j) Government Grants

Government grants are recognised at fair value where there is a reasonable assurance that the grant will be received and all the attached conditions are complied with.

In case of revenue related grant, the income is recognised on a systematic basis over the period for which it is intended to compensate an expense and is disclosed under âOther operating revenueâ or netted off against corresponding expenses wherever appropriate. Receivables of such grants are shown under âOther Financial Assetsâ. Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same. Receivables of such benefits are shown under âOther Financial Assetsâ.

Government grants related to assets, are adjusted in the carrying amount of the related assets.

k) Taxes

Current 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.

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 ihere is deferred tax assets arising from carry⁷ 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.

I) Retirement and other employee benefits

Short-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 fond. The Company recognizes contribution payable to the provident fond 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 fond. 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 lapse at the end of 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

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement,

A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. All other leases are operating leases.

Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company''s general policy on the borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred,

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

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 unitâs (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 earning amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

o) Provisions, contingent liabilities and contingent asset

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions are discounted, if the effect of the time value of money is material, using pre-tax rates that reflects the risks specific to the liability. When discounting is used, an increase in the provisions due to the passage of time is recognised as finance cost. These provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Necessary provision for doubtful debts, claims, etc., are made, if realisation of money is doubtful in the judgement of the management.

Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. Contingent liabilities are disclosed separately.

Show cause notices issued by various Government authorities are considered for evaluation of contingent liabilities only when converted into demand.

Contingent assets

Where an inflow of economic benefits is probable, the Company discloses a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect. Contingent assets are disclosed but not recognised in the financial statements.

p) Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances with original maturity of less than 3 months, highly liquid investments that are readily convertible into cash, which are subject to insignificant risk of changes in value.

q) Cash Flow Statement

Cash flows are presented using indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

Bank borrowings are generally considered to be financing activities. However, where bank overdrafts which are repayable on demand form an integral part of an entityâs cash management, bank overdrafts are included as a component of cash and cash equivalents for the purpose of Cash flow statement.

r) Earnings per share

The basic earnings per share are computed by dividing die net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Diluted EPS is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares, as appropriate.

Mar 31, 2018

1, 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.

Ait 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.

A1 iability 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 tor at least twelve months after the reporting period

All other liabilities are classified as non-current.

Deterred 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 3 months as its operating cycle.

b) Fair value measurement

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

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.

A fair value measurement ot a non-finaneial asset takes into account a market participantâs 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.

âLevel 1 : Quoted (unadjusted) market prices in active market for identical assets or liabilities.â

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 signi ficant 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 Companyâs board ot 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 ol 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 lair value measurement is disclosed in the relevant notes.

c) Revenue Recognition

Sale of goods

âRevenue 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 oi ownership is transferred to the buyer, which generally coincides with the despatch ot the goods or as per the inco-terms agreed with the customers.

Power Generation

Export entitlements

Saie of scrap

Scrap saie is recognised at the fair value of consideration received or receivable upon transfer of significant risk and rewards. It comprises of invoice value of goods including excise duty excluding applicable taxes on saie.

Interest income

Interest income is recorded using the effective interest rate (EJR) method. EiR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financ ial 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 ail the contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.

Renta! Income

Rental income from operating lease is recognised on a straight line basis over the term of the relevant lease, if the escalation is not a compensation for increase in cost inflation index. Dividend income

Dividend income is recognized when the companyâs right to receive dividend is established by the reporting dale, which is generally when shareholders approve the dividend.

d) Property, plant and equipment and capital work in progress Deemed cost option for first time adopter of Ind AS

Under the previous GAAP (Indian GAAP), the property, plant and equipment were carried in the balance sheet at cost less accumulated depreciation. The company has elected to fair value its land as the deemed cost as at the date of transition, viz., 1 April 2016 and applied Ind AS 16 retrospectively for all other classes of Property, Plantand Equipment.

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.

âAdvances paid towards the acquisition of tangible assets outstanding at each balance sheet date, are disclosed as capital advances under long term loans and advances and the cost of the tangible assets not ready for their intended use before such date, are disclosed as capital work in progress.â

Component Cost

All material/ significant components have been identified for our plant and have been accounted separately. The useful life of such component are analysed independently and wherever components are having different useful iife 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. Mac hi nerv 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

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.

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

f) inventories

Inventories are carried at the lower of cost and net realisable value. Cost includes cost oi purchase and other costs incurred in bringing the inventories to their present location and condition. Costs are determined on weighted average method as follows:

(i) Raw materials, packing materials and consumables: At purchase cost including other cost incurred in bringing materials/consumables to their present location and condition,

(ii) ^ork-in-process and intermediates: At material cost, conversion costs and appropriate share of production overheads â

(iii) Finished goods: At material cost, conversion costs and an appropriate share of production overheads. Excise Duty is exempted on finished grey goods,

g) Financial Instruments

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

Financial assets

Initial 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 are also added to the cost 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 entityâs business model of managing them.

For purposes of subsequent measurement, 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 ofPrincipal and Interest (SPP1) on the principal amount outstanding.

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 assetâs contractual cash flow^rs represent SPPl.

Debt instruments included within the FV fOCI 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 atFVTPL

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 fail value with all changes recognized in the profit and loss.

Equity investments

Ail 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 classifying the 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 saie 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 terras give rise to cash flows on specified dates that represents SPP1. are measured as detailed below depending on the business model;

Derecognition

A financial asset is primarily derecognised when:

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

- The C ompany 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 âpass-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 Companyâs 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 obiigations that the Company has retained.

Impairment of financial assets

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

a) f inanciai assets that are debt instruments, and are measured at amortised cost e.a., 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 lnd AS 11 andindAS 18.

The Company follows âsimplified approachâ 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 AS17.

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 E1R. When estimating the cash flows, the Company considers ail contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life ot 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 asincome/ expense in the statement of profit and loss. This amount is reflected under the head âother expensesâ 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 air value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as âaccumulated impairment amountâ in the OCI.

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:

Financial liabilities

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 Companyâs 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 arc 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 arc 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 OCT. These gains/ loss 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 liabilityâ are recognised in the statement ol 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 L1R amortisation process.

Derivative financial instruments

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 lnd AS 109, Financial Instruments. Any derivative that is either not designated a hedge, or is so designated but is ineffective as per lnd 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 arc 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

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 Companyâs senior ; management determines change in the business model as a result of external or internal changes which are significant to the Companyâs 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 prospective!}â 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.

h) Foreign currency transactions and translations

Transactions and balances

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-monctary 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 toss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OC1 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 yearend rate and rate on the date ot 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.

i) Borrowing Costs

âBorrowing 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

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

j) Government Grants

Government grants are recognised at fair value where there is a reasonable assurance that the grant will be received and all the attached conditions are complied with.

in ease of revenue related grant, the income is recognised on a systematic basis over the period for which it is intended to compensate an expense and is disclosed under ââOther operating revenueââ or netted off against corresponding expenses wherever appropriate. Receivables of such grants are shown under âOther Financial Assetsâ. Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same. Receivables of such benefits are shown under âOther Financial Assets .

Government grants related to assets, including non-monetary grants at fair value, shall be presented in the balance sheet by setting up the grant as deferred income. The grant set up as deferred income is recognised in profit or loss on a systematic basis over the useful life of the asset.

k) Taxes

Current income tax

Deferred tax

Deferred tax liabilities are recognised for ail taxable temporary differences.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be avaiiabie 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.

Deferred lax 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 ta xable entity and the same taxation authority.

l) Retirement and other employee benefits

Short-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 lor 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. 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 dale 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 lor 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

Other long term employee benefits

m) Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even it that right is not explicitly specified in an arrangement.

For arrangements entered into prior to April !. 2016, the C ompany has determined whether the arrangement contain lease on the basis ot tacts and circumstances existing on the date of transition.

A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. Ail other leases are operating leases.

Finance leases are capitalised at the commencement of the lease at the inception date fair value ot the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in Finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company s general policy on the borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.

n) Impairment of non financ iai assets

fht 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 assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (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 oi groups of assets. Vi hen 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.

o) Provisions, contingent liabilities and contingent asset

Provisions

Provisions are recognised when the Company has a present obligation (legal, or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Ptovisions are discounted, if the effect of the time value of money is material, using pre-tax rates (hat reflects the risks specific to the liability. When discounting is used, an increase m the provisions due to the passage of time is recognised as finance cost. These provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Necessary provision for doubtful debts, claims, etc., are made, if realisation of money is doubtful in the judgement of the management.

Contingent liabilities

Show cause notices issued by various Government authorities are considered tor evaluation of contingent liabilities only when converted into demand.

Contingent assets

p) Cash and cash equivalents

q) Cash Flow Statement

r) Earnings per share

The basic earnings per share are computed by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

Mar 31, 2017

Annexure X: Remuneration Policy Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises the Chairperson and Non-Executive Directors of the Company out of which at least one-half are Independent Directors and as such complies with the obligations of the Companies Act, 2013 and the corporate governance requirements of the Listing Agreement with stock exchanges. The Chairperson of this Committee is an Independent Director. The Chairperson of the Board of Directors is a member of this Committee but will not Chair this Committee.

The Committee operates under formal terms of reference which were approved by the Board on April 29,2014. These terms of reference have been prepared in a manner to generally maintain ovetall continuity with the nomination and remuneration policies of the company while complying with the Companies Act, 2013 and the Listing Agreements with stock exchanges.

Role and Responsibilities

The Committeeâs foremost priorities are to ensure that the Company has the best possible leadership and maintains a clear plan for both Executive and Non-executive Director succession. The Committee also reviews senior management succession. Its prime focus is therefore on the strength of the Board and the senior management team and ensuring that appointments are made on merit, against objective criteria, selecting the best candidate for the post. 1 he Committee advises the Board on the appointments, retirements and resignations from the Board and its Committees. It also advises the Board on similar changes to the senior management of the Company.

The Committee and its members are empowered to obtain outside legal or other independent professional advice, at the cost of the Company, in relation to its deliberations and to secure the attendance at its meetings of any employee or other parties it considers necessary.

Criteria for appointments and independence of Directors

When considering appointments to the Board and its Committees, the Nomination and Remuneration Committee will draw up a specification for the role taking into consideration the balance of skills, knowledge and experience of its existing members, the diversity of the Board and the Company''s ongoing requirements. The Company believes that diversity underpins the successful operation of an effective Board and embraces diversity as a means of enhancing the business.

The recruitment process then focuses on appointing candidates who meet the criteria, who have the relevant professional knowledge, professional qualifications and experience. Successful candidates are likely to have demonstrable leadership qualities and interpersonal communication skills, act with integrity and have international business exposure is taken re that all proposal appointees have Submitted. time available to devote to ; the vol., are compliant with the roles, policies and values of our Company ''nil do not have any conflicts of interest.

On appointments or promotions the Committee will typically use the Remuneration Policy of the Company to determine ongoing remuneration. However, the Committee retains the discretion to make appropriate remuneration decisions outs.de the Standard Policy to meet specific circumstances.

Remuneration Policy i

The overarching philosophy for remuneration within the company is re attract, retain and I motivate individuals of the caliber necessary Â» successfully implement the Company s business strategy. In particular, this means ensuring that incentive plans are appropriate to encourage enhanced pertinence. and to avoid rewarding nadir performance In viewing and setting Company''s remuneration policy, the Committee seeks to balance the interests of its employees and those of its stakeholders, to support Company strategy and foster a h.gh performance culture, where, meaningful portion of remuneration is performance linked.

Remuneration Policy for Managing Director:

An appropriate level of remuneration may be set to ensure that the Company can appoint Managing Director of the necessary skill and experience by offering him market competitive remuneration reflecting his individual experience, role and contribution^ The appointment may

Before a tenure of such years from the date of his appointment not exceed the penodntems of Section 196 and as prescribed under Schedule V to the Companies Act, 2013. The individual''s performance will be reviewed annually by the Nomination and Remuneration Committee and recommended to the Board enabling it to decide the remuneration payable to the Managing Director.

The total remuneration package may be designed to provide an annual remunerate payable by way of commission and other perquisites as decided by the Board of Directors however, not exceeding 5% of the net profits of the company computed in accordance with the provisions o Sections 198 of the Companies Act. 2013 and as determined by the Board of Directors of t e

Company for each financial year within the maximum permissible limit. Further, m the even c his being Managing Director in any other company, such remuneration shall higher maximum limit admissible from any one of these companies, in terms of Schedule V the Companies Act, 2013.

The Managing Director is not entitled to sitting fees for attending meetings of Director or the Committees where he will be the Chairman/Member. He is entitled to have Chairman s Office at his convenience at company''s expenses. _

Remuneration Policy for Non-Executive Directors

Non-Executive Directors are entitled to sitting fees for attending meetings of the Board or its Committees at rates which are within the limits prescribed under the Companies Act, 2013. They are also entitled to commission on net profits, as determined by the Board from time to time, not exceeding 1% of the net profits of the Company for that year. The level of remuneration is set to attract and retain Non-Executive Directors of the necessary skill and experience by offering them market competitive remuneration.

Non-Executive Directors do not participate in Board discussions which relate to their own remuneration. They receive reimbursement of reasonable expenses incurred in attending the Board, Committee and other ad hoc meetings.

None of the Non-Executive Directors is entitled to receive compensation for loss of office at any time or participate in any retirement plans.

Non-Executive Independent Directors are appointed in compliance with the provisions of the Companies Act 2013 and must adhere to the Code for Independent Directors laid down under Schedule IV to the Companies Act, 2013 and retain their independence during the entire tenure of appointment as an Independent Director. The terms of service of Non-Executive Independent Directors are contained in letters of appointment issued to them after their appointment at a general meeting of the Company. The current policy for Non-Executive Independent Directors of the Company is to serve for a maximum period of two terms of five years each, with review at the end of the first five year term, subject always to mutual agreement and annual performance evaluation.

Remuneration is paid subject to deduction of Income Tax at source and payment of applicable Service Tax.

Remuneration to Senior Management Personnel

An appropriate level of remuneration is set to ensure that the Company is able to recruit and retain senior management with the necessary skills, professional qualifications, experience, international exposure and compliance with the rules and policies of the Company. Market competitive remuneration is offered to individuals reflecting their experience, role and contribution within the Company. The individual''s performance is reviewed from time to time with changes in remuneration normally. In considering any increase in base salary the Committee will mainly consider the role, changes in job scope, responsibility and complexity and the need to maintain market competitiveness. Total remuneration package is designed to provide an appropriate balance between fixed and variable components with a focus on long term variable pay so that strong performance is incentivized but without encouraging excessive risk taking.

Remuneration arrangements of Senior Management Personnel consist of the same elements as those of other employees i.e. Basic Salary, HRA and other allowances, retirement benefits (i.e. Provident Fund and Gratuity as per the Company''s Schemes applicable to all employees) and perquisites as per Rules of the Company applicable to all employees according to their seniority including corporate club membership, insurance, car and fuel perquisites.

As applicable to all employees, Senior Management Personnel are entitled to avail themselves of 30 days leave in a year and un-availed leave can be accumulated as per the rules of the Company up to a maximum of 30 days.

b) Rights, Preferences and restrictions attached to Equity Shares

I The Company has issued only one class of shares referred to as equity shares having paid up value of Rel/- per share and each shareholder is entitled 10 one vote per share.

2. The Company declares dividend on equity shares. In the event of declaration of interim dividend, the same is as per decision of the Board of Directors Final dividend is proposed by Board of Directors and approved by the shareholders of the Company at the Annual General Meeting.

3. In the event of liquidation, shareholder will be entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportionate to the no. of equity share held by the shareholder.

4. The Company has no Holding or Subsidiary Companies.

5. During the last five years immediately preceding the date of Balance Sheet, the company has neither issued any shares as Bonus shares nor for consideration other than cash and has not bought back any shares.

6. The Company had split its Rs.10/- paid up shares into Re.l/- paid up shares in October, 2012.

Additional Information :

Term loan under TUF Scheme availed from State Bank of India by securing first charge on the specific assets procured under TUF Scheme repayable in 5 years on half yearly basis. The repayment of TUF loan commenced from October,2014.

Term loan under ATUF Scheme availed from Exam Bank of India by securing first charge on the specific assets procured under ATUF Scheme repayable in 5 years on half yearly Basis. The repayment of ATUF Loan Commenced from December,2016 Term loan, out of 1046.30 lakhs a sum of Rs.348.06 lakhs payable during the year is shown in Other Current Liabilities under Current Maturities of Long Term Loan

Mar 31, 2016

30. NOTES ON ACCOUNTS

I. Statement of Significant Accounting Policies:-

Basis of preparation of Financial Statements:

AS - 1 Disclosure of accounting policies

The financial statements have been prepared on the basis of going concern, under the historic cost convention, to comply in all the material aspects with applicable accounting principles in India, the accounting standards notified under the Companies Act, 195 6 / Companies Act, 2013 as applicable.

AS-2 Valuation of inventories

a. Raw materials, components, stores and spares are valued at cost determined on weighted average basis. Work in process includes material cost and applicable direct overheads. Finished goods are valued at the aggregate of material cost and applicable direct and indirect overheads or market value whichever is lower.

b. The Excise Duty is exempt on finished grey goods.

c. There is no goods lying in customs bonded warehouses and hence the provision of duty does not arise.

AS 3 Cash flow statements

Cash flow statement has been prepared under "Indirect Method .

AS - 4 Contingencies and Events occurring after the Balance Sheet Date

There are no contingencies and events after the Balance Sheet date that affect the financial position of the company. Contested liabilities are disclosed by way of a note.

AS 5 Net profit or loss for the Year, prior period items and changes in accounting policies:

This is not applicable as there is no change in accounting policies.

AS - 6 Depredation accounting

1, Up to March 31,2014, depreciation has been provided in the accounts on the following basis, at the rates prescribed in Schedule XIV to the Companies Act, 1956,

(a) Plant and machinery other than Windmill:

I) On additions till 31st December 1977.

Under the written down value method.

ii) On additions from 1st January 1978.

Under straight line method at the rates specified in Clause (II)(i)(a).

(b) On all other Assets:

Under the written down value method.

Under straight line method at the rates specified in Clause (II) (i) (b),

(d) In respect of additions during the year, full depreciation has been provided irrespective of the period of use. Similarly no depreciation to be provided on assets disposed off during the year.

2. Pursuant to the enactment of the Companies Act, 2013 (the ''Act''), the Company has, effective 1â April 2014, reviewed and revised the estimated useful lives of its fixed assets, in accordance with the provisions of Schedule II of the Act and depreciation is now provided based on the remaining useful life of the asset.

AS - 7 Accounting for Construction contracts

The company is not engaged in any Construction business covered by this Standard.

AS - 8Aecounting for Research and Development

This standard stands withdrawn front the date of Accounting Standard 26 - Intangible Assets becoming mandatory.

AS - 9 Revenue recognition

a) Income and expenditure are accounted on a going concern basis.

b) Sales are recognized at the time of dispatches of the goods to the customers and recorded net of sales returns and includes export benefits.

c) Interest income is recognized on a time proportion on basis taking into account the amount of outstanding and rate applicable.

d) Dividend income: The company has derived income during the current year out of its investment and is recognized when the Company''s right to receive dividend is established.

e) Lease rentals in respect of assets given on âleaseâ arc taken to Profit & Loss Account under the head of Non-operative income on the basis of the terms and conditions specified in the lease agreement,

f) Income of Profit on sale of investments have been accounted on the basis of realization.

AS 10 Accounting for fixed assets

Fixed assets are stated at cost of acquisition which includes expenditure incurred up to the date the asset is put to use, less accumulated depreciation. Land is stated at cost or revaluation.

Building is stated at cost or revaluation less depreciation, Plant and Machinery etc., are stated at cost less depreciation.

AS -11 Accounting for effects in foreign exchange rates

a. Purchase of imported components and spare parts are accounted based on retirement memos from banks,

b. In respect of exports of cloth made on or before 31.03.2016, the amount due have been accounted at the rate at which the export bills were tendered to the Bank for Collection/ Discounting,

c. There is no year end foreign currency denominated liabilities and receivables.

d. Derivative Transactions:

The Company uses forward exchange contracts to hedge its exposure in foreign currency.

As on March 31,2016 there is no Foreign Exchange Contracts outstanding exposure.

No Mark to Market component arises as the Company do not have any outstanding contract as at the end of the year.

AS - 12 Accounting for Government Grants

The company is availing Duty Drawback subsidy and the same is treated as revenue receipt.

AS-13 Accounting for Investments

Investments are stated at cost. Provision for diminution in the carrying cost of investments is made if such diminution is other than temporary in nature.

AS -14 Accounting for amalgamation

This standard is not applicable to the company for the year under review.

AS -15 Accounting for Retirement benefits

Gratuity with respect to defined benefit schemes are accrued based on actuarial valuations, carried out by an independent actuary as at the balance sheet date and being paid to Gratuity Fund.

The estimate of future salary increases considered in actuarial valuation lakes into account inflation, seniority, promotion and other relevant factors.

Provident Fund, Employees'' State Insurance Scheme and defined contribution plans are charged to the Profit and Loss Account when incurred.-6-

AS -16 Borrowing cost

All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets which are capitalized.

AS -17 Segment reporting

The Company operates in only one business segment viz. Textiles.

AS -18 Related party disclosure

Disclosure is made as per the requirements of the standard and as per the clarifications issued by the Institute of Chartered Accountants of India.

AS - 19 Leases

This standard is not applicable as the company does not have any finance lease agreement in force.

AS - 20 Earnings per share

The Disclosure is made in the Profit and Loss account as per requirement.

AS - 21 Consolidated financial statements

There is no subsidiary company and M/s. Colour Yams Limited, ceased to be an Associate company on and from 28,03.2016 and as such these standards are not applicable to the company.

AS-22 Accounting for taxes on income

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization.

AS - 23 Accounting for Investments in Associates in Consolidated Financial Statements This standard is not applicable to the company for the year under review.

AS - 24 Discontinuing Operations:

This is not applicable to the Company,

AS-25 Interim Financial Reporting:

Quarterly financial results are published in accordance with the requirement of listing agreement with Stock Exchanges. The recognition and measurement principle as laid down in the standard have been followed in the preparation of these results.

AS - 26 Intangible Assets

The company has no intangible assets. Hence this is not applicable.

AS-27FinandalReporting of Interest in Joint Ventures

This standard is not applicable to the Company as the company does not have any joint venture.

AS - 28 Impairment of Assets

As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of such assets. Hence there is no impairment loss on the assets of the company.

AS - 29 Provisions, Contingent Liabilities and Contingent Assets

Contingent Liabilities are disclosed inNoteNo.2,

AS - 30 Financial Instruments: Recognition and Measurement This standard is not applicable to the company for the year under review.

AS-31 Financial Instruments: Presentation

This standard is not applicable to the company for the year under review.-8-

AS - 32 Financial Instruments: Disclosures

This standard is not applicable to the company for the year under review.

Mar 31, 2015

AS - 1 Disclosure of accounting policies

The financial statements have been prepared on the basis of going concern, under the historic cost convention, to comply in all the material aspects with applicable accounting principles in India, the accounting standards notified under the Companies Act, 1956 / Companies Act, 2013 as applicable.

AS - 2 Valuation of inventories

a. Raw materials, components, stores and spares are valued at cost determined on weighted average basis. Work in process includes material cost and applicable direct overheads. Finished goods are valued at the aggregate of material cost and applicable direct and indirect overheads or market value whichever is lower.

b. The Excise Duty is exempt on finished grey goods.

c. There is no goods lying in customs bonded warehouses and hence the provision of duty does not arise.

AS - 3 Cash flow statements

Cash flow statement has been prepared under "Indirect Method".

AS - 4 Contingencies and Events occurring after the Balance Sheet Date

There are no contingencies and events after the Balance Sheet date that affect the financial position of the company. Contested liabilities are disclosed by way of a note.

AS - 5 Net profit or loss for the Year, prior period items and changes in accounting policies:

This is not applicable as there is no change in accounting policies.

1. Upto March 31,2014, depreciation has been provided in the accounts on the following basis, at the rates prescribed in Schedule XIV to the Companies Act, 1956.

(a) Plant and machinery other than Windmill:

i) On additions till 31st December 1977. Under the written down value method.

ii) On additions from 1st January 1978. Under straight line method at the rates specified in Clause (II) (I) (a).

(b) On all other Assets: Under the written down value method.

(c) Windmill: Under straight line method at the rates specified in Clause (II) (I) (b).

(d) In respect of additions during the year, full depreciation has been provided irrespective of the period of use. Similarly no depreciation to be provided on assets disposed off during the year.

2. Pursuant to the enactment of the Companies Act, 2013 (the ''Act''), the Company has, effective 1st April 2014, reviewed and revised the estimated useful lives of its fixed assets, in accordance with the provisions of Schedule II of the Act and depreciation is now provided based on the remaining useful life of the asset. As a result of these changes the depreciation charge for the year ended March 31, 2015 is lesser by Rs. 157.32 Lakhs with a corresponding increase in the profit for the year.

3. Further in accordance with the transitional provision specified in Schedule II of the Act, the carrying amount of the Fixed Assets have been reviewed with the consequential impact relating to the period prior to April 1,2014 amounting to Rs.45.09 Lakhs has been adjusted with the General Reserve.

AS - 7 Accounting for Construction contracts

The company is not engaged in any Construction business covered by this Standard.

AS - 8 Accounting for Research and Development

This standard stands withdrawn from the date of Accounting Standard 26 Intangible Assets becoming mandatory.

AS - 9 Revenue recognition

a) Income and expenditure are accounted on a going concern basis.

b) Sales are recognized at the time of despatches of the goods to the customers and recorded net of sales returns and includes export benefits.

c) Interest income is recognized on a time proportion basis taking into account the amount of outstanding and rate applicable.

d) Dividend income: The company has derived income during the current year out of its investment and is recognized when the Company''s right to receive dividend is established.

e) Lease rentals in respect of assets given on "lease" are taken to Profit & Loss Account under the head of Non-operative income on the basis of the terms and conditions specified in the lease agreement.

AS -10 Accounting for fixed assets

Fixed assets are stated at cost of acquisition which includes expenditure incurred upto the date the asset is put to use, less accumulated depreciation. Land is stated at cost or revaluation. Building is stated at cost or revaluation less depreciation. Plant and Machinery etc., are stated at cost less depreciation.

AS - 11 Accounting for effects in foreign exchange rates

a. Purchase of imported components and spare parts are accounted based on retirement memos from banks.

b. In respect of exports of cloth made on or before 31.03.2015, the amount due have been accounted at the rate at which the export bills were tendered to the Bank for Collection/ Discounting.

c. There is no year end foreign currency denominated liabilities and receivables.

d. Derivative Transactions:

The Company uses forward exchange contracts to hedge its exposure in foreign currency.

As on March 31, 2015 there is no Foreign Exchange Contracts outstanding exposure.

No Mark to Market component arises as the Company do not have any outstanding contract as at the end of the year.

AS - 12 Accounting for Government Grants

During the year, the company has received a sum of Rs. 124.48 Lakhs as Capital subsidy under Technology Upgradation Fund (TUF) Scheme, a fund constituted by the Ministry of Textiles, Government of India.

The company has treated the same as capital receipt.

Further the company is availing Duty Drawback subsidy and the same is treated as revenue receipt.

AS - 13 Accounting for Investments

Investments are stated at cost. Provision for diminution in the carrying cost of investments is made if such diminution is other than temporary in nature.

AS - 14 Accounting for amalgamation

This standard is not applicable to the company for the year under review.

AS - 15 Borrowing cost

All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets which are capitalized.

AS - 16 Segment reporting

The Company operates in only one business segment viz. Textiles.

AS -17 Related party disclosure

Disclosure is made as per the requirements of the standard and as per the clarifications issued by the Institute of Chartered Accountants of India.

AS - 18 Leases

This standard is not applicable as the company does not have any finance lease agreement in force.

AS - 19 Earnings per share

The Disclosure is made in the Profit and Loss account as per requirement.

AS - 20 Consolidated financial statements

There is no subsidiary company and the company has one Associate company and the investments are held only for investment purposes.

AS - 21 Accounting for taxes on income

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization.

AS - 22 Accounting for Investments in Associates in Consolidated Financial Statements

This standard is not applicable to the company for the year under review.

AS - 23 Discontinuing Operations:

This is not applicable to the Company.

AS - 24 Interim Financial Reporting:

Quarterly financial results are published in accordance with the requirement of listing agreement with Stock Exchanges. The recognition and measurement principle as laid down in the standard have been followed in the preparation of these results.

AS - 25 Intangible Assets

The company has no intangible assets. Hence this is not applicable.

AS - 26 Financial Reporting of Interest in Joint Ventures

This standard is not applicable to the Company as the company does not have any joint venture.

AS - 27 Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on intemal/extemal factors. Hence there is no impairment loss on the assets of the company requiring provisioning for the year under review.

AS - 28 Provisions, Contingent Liabilities and Contingent Assets Contingent Liabilities are disclosed in Note No.2.

AS - 29 Financial Instruments: Recognition and Measurement This standard is not applicable to the company for the year under review.

AS - 30 Financial Instruments: Presentation

This standard is not applicable to the company for the year under review.

AS - 31 Financial Instruments: Disclosures

This standard is not applicable to the company for the year under review.

Mar 31, 2014

Not Available

Mar 31, 2013

AS-1 Disclosure of Accounting Policies

The financial statements have been prepared on the basis of going concern, under the historic cost convention, to comply in all the material aspects with applicable accounting principles in India, the accounting standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provision of the said Act.

AS-2 Valuation of Inventories

a) Raw materials, components, Stores and spares are valued at cost determined on weighted average basis. Work in process includes material cost and applicable direct overheads. Finished goods are valued at the aggregate of material cost and applicable direct and indirect overheads or market value whichever is lower.

b) The Excise Duty is exempt on finished grey goods.

c) There is no goods lying in customs bonded warehouses and hence the provision of duty does not airse.

AS-3 Cash Flow Statements

Cash flow statement has been prepared under "Indirect Method".

AS-4 Contingencies and Events occurring after the Balance Sheet Date

There are no contingencies and events after the Balance Sheet date that affect the financial position of the company. Contested liabilities are disclosed by way of a note.

AS-5 Net Profit or Loss for the Year, Prior Period Items and Changes in Accounting Policies:

This is not applicable as there is no change in accounting policies.

AS-6 Depreciation Accounting

Depreciation has been provided in the accounts on the following basis, at the rates prescribed in Schedule XIV to the Companies Act, 1956:

a) Plant and Machinery other than Windmill:

i) On additions till 31" December 1977. Under the written down value method.

ii) On additions from 1st January 1978.

Under straight line method at the rates specified in Clause (II) (i) (a).

b) On all other Assets:

Under the written down value method.

c) Windmill:

Under strainght line method at the rates specified in Clause (II) (i) (b).

d) In respect of additions during the year, full depreciation has been provided irrespective of the period of use. Similarly no depreciation to be provided on assets disposed off during the year.

AS-7 Accounting for Construction Contracts

The Company is not engaged in any construction business covered by this Standard.

AS-8 Accounting for Research and Development

This Standard stands withdrawn from the date of Accounting Standard 26- Intangible Assets becoming mandatory.

AS-9 Revenue Recognition

a) Income and expenditure are accounted on a going concern basis.

b) Sales are recognized at the time of despatches of the goods to the customers and recorded net of sales returns and includes export benefits.

c) Interest Income is recognized on a time proportion basis taking into account the amount of outstanding and rate applicable.

d) Dividend Income: The company has derived income during the current year out of its investment and is recognized when the Company''s right to receive dividend is established.

e) Lease rentals in respect of assets given on "lease" are taken to Profit & Loss Account under the head of Non-Operative Income on the basis of the terms and conditions specified in the lease agreement.

AS-10 Accounting for Fixed Assets

Fixed Assets are stated at cost of acquisition which includes expenditure incurred upto the date the asset is put to use, less accumulated depreciation. Land is stated at cost or revaluation. Building is stated at cost or revaluation less depreciation. Plant and Machinery etc., are stated at cost less depreciation.

AS-11 Accounting for effects in foreign exchange rates

a) Purchase of imported components and spare parts are accounted based on retirement memos from banks.

b) In respect of exports of cloth made on or before 31.03.2013, the amount due have been accounted at the rate at which the export bills were tendered to the Bank for Collection / Discounting.

c) There is no year end foreign currency denominated liabilities and receivables.

d) Derivative Transactions:

The Company uses forward exchange contracts to hedge its exposure in foreign currency.

As on 31st March, 2013 there is no Foreign Exchange Contracts outstanding exposure.

The amendment introduced to ASH by Government of India on 31st March 2009 allowing the loss/profit on restatement of External Commercial Borrowings made for acquisition of Capital assets to be deducted from or added to cost of capital asset is not applicable to the company as it has no External Commercial Borrowings.

No Mark to Market component arises as the Company do not have any outstanding contract as at the end of the year.

AS-12 Accounting for Government Grants

The Company has not received any Government grants during the current accounting year.

AS-13 Accounting for Investments

Investments are stated at cost. Provision for diminution in the carrying cost of investments is made if such diminution is other than temporary in nature.

AS-14 Accounting for Amalgamation

This standard is not applicable to the company for the year under review.

AS-15 Accounting for Retirement Benefits

Gratuity with respect to defined benefit schemes are accrued based on actuarial valuations, carried out by an independent actuary as at the balance sheet date and being paid to Gratuity Fund.

Providend Fund, Employees'' State Insurance Scheme and defined plans and charged to the Profit and Loss Account when incurred.

AS-16 Borrowing Cost

All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets which are capitalized. During the year under review there was no borrowing attributable to qualifying assets and hence no borrowing cost was capitalized.

AS-17 Segment Reporting

The Company operates in only one business segment viz., Textiles.

AS-18 Related Party Disclosure

Disclosure is made as per the requirements of the standard and as per the clarifications issued by the Institute of Chartered Accountants of India.

AS-19 Leases

This standard is not applicable as the Company does not have any finance lease agreement in force.

AS-20 Earning per Share

The disclosure is made in the Profit and Loss account as per requirement.

AS-21 Consolidated Financial Statements

There is no subsidiary company and hence this is not applicable

AS-22 Accounting for Taxes on Income

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

Deferred tax resulting from timing differences between book and tax profits is accounted for under liability method, at the current rate of tax.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization.

AS-23 Ace ounting for Investments in Consolidated Financial Statements

This standard is not applicable to the company for the year under review.

AS-24 Discontinuing Operations

This is not applicable to the Company.

AS-25 Interim Financial K-.rtin,.

Quarterly financial results are published in accordance with the requirement of listing agreement with Stock Exchanges. The recognition and measurement principle as laid down in the standard have been followed in the preparation of these results.

AS-26 Intangible Assets

The Company has no intangible assets. Hence this is not applicable.

AS-27 Financial Reporting of Interest in Joint Ventures

This standard is not applicable to the Company as the company does not have any joint venture.

AS-28 Impairment of Assets

As on the Balance Sheet date the carrying amounts of the assets net of accumulated depreciation is not less than the recoverable amount of such assets. Hence there is no impairment loss on the assets of the Company.

AS-29 Provisions, Contingent Liablilities and Contingent Assets Contingent Liabilities are disclosed in Note No.2.

AS-30 Financial Instruments: Recognition and Measurement

This standard is not applicable to the company for the year under review.

AS-31 Financial Instruments: Presentation

This standard is not applicable to the Company for the year under review.

AS-32 Financial Instruments : Disclosures

This standard is not applicable to the company for the year under review.

Mar 31, 2012

Basis of preparation of Financial Statements:

As-1 Disclosure of Accounting Policies .

The financial statements have been prepared on the basis. of going concern, under the historic cost convention, to comply in all the material aspect with applicable accounting principles in India. the accounting standard notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provision of the said Act.

AS-2 Valuation of Inventories

a) Raw materials, components, stores and spares are valued at cost determined on weighted average basis Work in process includes material cost and applicable direct overhead Finished goods are valued at the aggregate of material cost and applicable direct and indirect overheads of market value whichever is lower

b) The Excise Duty is exempt on finished grey goods However the Excise Duty on Made UPs lying within the factory is included in the valuation of inventories.

c) There is no goods lying in customs bonded warehouses and hence the provision of duty does not arise

AS-3 Cash Flow Statements

Cash flow statement has been prepared under "Indirect Method"

AS-4 Contingencies and F, vents occurring after the Balance sheet Date

There are no contingencies and events after the Balance Sheet date that affect the Financial position of the company. Contested liabilities are disclosed by way of a note

AS-5 Net Profit or Loss for the year prior period items and Changes In Accounting Policies.

This is not applicable as there is no change in accounting policies.

AS-6 Depreciation Accounting

Depreciation has been provided in the accounts on the following basis, at the rules prescribed in Schedule to the Companies Act 1956:

a) Plant and Machinery other than Windmill

i) On additions till 31st December 1977 Under the written down value method

ii) On additions from 31st January 1978

Under straight line method at the rates specified in Clause (IT) (i) (a).

iii) On all other Assets:

Under the written down value method.

c) Windmill

Under straight line method at the rates specified in Clause (II) (i) (b)

d) In respect of addition during the year, full depreciation has been provided irrespective of the period of use Similarly no depreciation to be provided on assets disposed off during the year.

AS-7 Accounting for Construction Contracts

The Company is not engaged in any construction business covered by this Standard.

AS-8 Accounting for Research and Development

This Standard stands withdrawn from the date of Accounting Standard 26- Intangible Assets becoming mandatory.

AS-9 Revenue Recognition

a) Income and expenditure are accounted on a going concern basis

b) Sales are recognized on a time of dispatches of the goods to the customers and recorded net of sales returns and includes export benefits

c) Interest Income is recognized on a time proportion basis taking into account the amount of outstanding and rate applicable.

d) Dividend Income: The company has derived income during the current year out of its investment and is recognized when the Company's right to receive dividend is established

e) Lease rentals in respect of assets given on "lease" are taken to Profit & Loss Account under the head of Non- Operative Income on the basis of the terms and conditions specified in the lease agreement

AS-10 Accounting for Fixed Assets

Fixed Assets are stated at cost of acquisition Which includes expenditure incurred up to the date the asset is put to use, less accumulated depreciation. Laud is stated at cost or revaluation Building is stated at cost or revaluation less depreciation. Plant and Machinery etc.. are stated at cost less depreciation

AS-11 Accounting for effects in foreign exchange rates

a) Purchase of imported components and spare parts are accounted based on retirement memos from banks.

b) In respect of exports of cloth made on or before 31.03,2012, the amount due have been accounted at the rate at which the export bills were tendered to the Bank for Collection / Discounting

C) There is no yearend foreign currency denominated liabilities and receivables.

d) Derivative Transactions:

The Company uses forward exchange contracts to hedge its exposure in foreign currency

As on 31st March, 2012 there is no Foreign exchange Contracts outstanding exposure.

The amendment introduced to AS 11 by Government of India on 31st March 2009 allowing the loss/profit on restatement of External Commercial Borrowings made for acquisition of Capital asset', to be deducted from or added in cost of capital asset is not applicable in the company as it has no External Commercial Sorrowing

AS-12 Accounting for Government Grants

The Company has not received any Government grants during the current accounting year

AS-13 Accounting for Investments

Investments are stated at cost Provision for diminution in the carrying cost of investments is made if such diminution is other than temporary in nature.

AS- 14 Accounting for Amalgamation

This standard is not applicable to the company for the year under review.

AS-15 Accounting for Retirement Benefits

Gratuity with respect to defined benefit schemes. Are accrued based on actuarial valuations carried out by an independent actuary as at the balance sheet date and being paid to Gratuity Fund.

Provided Fund, Employees' State Insurance Scheme and defined contribution plans are charged to the Profit and Loss Account when incurred

AS-16 Borrowing Cost

All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets which are capitalized. During the year under review there was no borrowing attributable to qualifying assets and hence no borrowing cost was civilized.

AS-17 Segment Reporting

The Company operate in only one business segment viz., Textiles.

AS-18 Related party Disclosure

Disclosure is made as per the- requirements of the standard and as per the clarifications issued by the restitute of Chartered Accountants of India.

AS-19 Lenses

This standard is not applicable as The Company does not have any finance lease agreement is force.

AS-20 Earning per Share

The disclosure is made in the Profit and Loss account as per requirement

AS-21 Consolidated Financial statements

There is no subsidiary company and hence this is not applicable

AS-22 Accounting for Taxes in Income

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act. 1961

Deferred tax resulting From timing differences between book and tax profits is accounted for under liability method. at the current rate of tax.

Deferred tax assets arising on account of brought Forward losses and unabsorbed depreciation are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized Deferred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization

AS-23 Accounting for Investments in Associate in Consolidated Financial Statements

This standard is not applicable to the company for the year under review.

AS-24 Discontinuing Operations

This is not applicable to the Company

AS-25 Interim Financial Reporting

Quarterly financial results are published in accordance with the requirement of agreement with Stock Exchanges. The recognition and measurement principle as laid down In the standard have been followed In the preparation of these results.

AS-26 Intangible Assets

The company has no intangible assets Hence this is not applicable

AS-27 Financial Reporting of Interest in Joint Ventures

This standard is not applicable to the Company as the company does not have any joint venture

AS-28 Impairment of Assets

As on The Balance Sheet date the carrying amounts of the assets not of accumulated depreciation is not less than the recoverable amount of such assets. Hence there is no impairment loss on the asset of the Company

AS-29 Provisions Contingent Liabilities and Contingent Assets

Contingent Liabilities are disclosed in Note No.2

This standard is not applicable to the company for the year under review

AS-30 Financial Instruments: presentation

This standard is not applicable to the company for the year under review

AS-31 Financial Instruments: Recognition and Measurement

The standard is not applicable to the company for the year under review

AS-32 Financial Instruments: Disclosures

This standard is not applicable to the company for the year under review

Mar 31, 2011

A) Basis of preparation of Financial Statements:

The financial statements have been prepared on the basis of going concern, under the historic cost convention, to comply in all the material aspects with applicable accounting principles in India, the accounting standards notified under section 211 (3C) of the Companies Act, 1956 and the relevant provision of the said Act.

B) FIXED ASSETS :

Land is stated at cost or. revaluation. Building is stated at cost or revaluation less depreciation. Depreciation has been provided in the accounts on the following basis, at the rates prescribed in Schedule XIV to the Companies Act, 1956.

(a) Plant and Machinery other than Windmill :

i) On additions till 31st December, 1977 : Under the Written Down Value method.

ii) On additions from 1st January, 1978 : Under straight line method at the rates specified in Clause (II) (i) (a).

(b) On all other Assets : Under the Written Down Value method.

(c) Windmill : Under straight line method at the rates specified in Clause (II) (i) (b).

(d) In respect of additions during the year, full depreciation has been provided irrespective of the period of use. Similarly no depreciation to be provided on assets disposed off during the year.

C) REVENUE RECOGNITION :

i) Income and expenditure are accounted on a going concern basis

ii) Sales are recognized at the time of despatches of the goods to the customers and recorded net of sales return and includes export benefits.

iii) Interest income is recognized on a time proportion basis taking into account the amount of outstanding and rate applicable.

iv) Dividend income : The Company has derived income during the current year out of its investment and is recognised when the Companys right to receive dividend is established.

v) Lease rentals in respect of assets given on "operating lease" are taken to Profit &ÃÂ¦ Loss Account under the head of Miscellaneous income on the basis of the terms and conditions specified in the lease agreement.

D) INVENTORIES :

Inventories are valued at lower of cost and net realisable value. Cost is determined on weighted average basis. Cost of work-in-progress and the finished goods includes labour and manufacturing overheads, where applicable.

E) INVESTMENTS :

Investments are stated at cost. Provision for diminution in the carrying cost of investments is made if such diminution is other than temporary in nature.

F) RETIREMENT BENEFITS :

Gratuity with respect to defined benefit schemes are accrued based on actuarial valuations, carried out by an independent actuary as at the balance sheet date and paid to Gratuity Fund.

Provident Fund, Employees State Insurance Scheme and defined contribution plans are charged to the Profit and Loss Account when incurred.

G) TAXATION :

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

Defferred tax resulting from timing differences between book and tax profits is accounted for under liability method, at the current rate of tax.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on other temporary timing differences are recognised only if there is a reasonable certainty of realisation.

H) BORROWING COSTS :

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised upto the period such assets are ready for its intended use. All other borrowing costs are charged to the Profit and Loss Account.

I) FOREIGN CURRENCIES:

Transactions involving foreign exchange are dealt with as follows:-

(a) In respect of exports of cloth made on or before 31.3.2011, the amount due have been accounted at the rate at which the export bills were tendered to the Bank for Collection/Discounting.

(b) Foreign Currency Current Accounts with Bank are restated at the rate ruling at the year end and the exchange difference is dealt with in the Profit & Loss account (Balance as on 31.03.2011 - US$ 16700.78)

(c) In case of foreign exchange forward contracts, the difference between the forward rate and exchange rate at the date of transaction is recognised as income / expense over the life of the contract.

J) CURRENT LIABILITIES :

a) Total outstanding dues of Micro Enterprises and Small Enterprises: Rs. Nil

b) Total outstanding dues of Creditors others than Micro Enterprises and Small Enterprises: Rs.331.74 Lakhs

c) Investor Education and Protection Fund shall be credited by the following amounts as and when they become due :

Unclaimed Dividend Rs. 39.41 Lakhs

K) The Company operates in only one business segment viz. "TEXTILES".

Mar 31, 2010

A) Basis of preparation of Financial Statements:

The financial statements have been prepared on the basis of going concern, under the historic cost convention, to comply in all the material aspects with applicable accounting principles in India, the accounting standards notified under section 211 (3C) of the Companies Act, 1956 and the relevant provision of the said act.

B) FIXED ASSETS :

Land is stated at cost or revaluation. Building is stated at cost or revaluation less depreciation. Depreciation has been provided in the accounts on the following basis, at the rates prescribed in Schedule XIV to the Companies Act,1956.

(d) In respect of additions during the year, full depreciation has been provided irrespective of the period of use. Similarly no depreciation to be provided on assets disposed off during the year.

C)SALES:

Sales comprise sale of goods net of excise duty of Rs. "Nil1 and includes export benefits.

D) INVENTORIES :

Inventories are valued at lower of cost and net realisable value. Cost is determined on weighted average basis. Cost of work-in-progress and the finished goods includes labour and manufacturing overheads, where applicable.

E) INVESTMENTS :

Investments are stated at cost.

No provision is made for diminution in value of Investments, as the Investments are considered as long term.

F) RETIREMENT BENEFITS :

Gratuity with respect to defined benefit schemes are accrued based on actuarial valuations, carried out by an independent actuary as at the balance sheet date and paid to Gratuity Fund.

Provident Fund, Employees State Insurance Scheme and defined contribution plans are charged to the Profit and Loss Account when incurred.

G) TAXATION :

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

Defferred tax resulting from timing differences between book and tax profits is accounted for under liability method, at the current rate of tax.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation are recognised only when there is virtual certainty supported by convincing evidence that such assets will be realised. Deferred tax assets arising on other temporary timing differences are recognised only if there is a reasonable certainty of realisation.

H) BORROWING COSTS :

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised upto the period such assets are ready for its intended use. All other borrowing costs are charged to the Profit and Loss Account.

I) CURRENT LIABILITIES :

a) No amount is due to any small scale industrial undertaking.

b) Total outstanding dues to small scale industrial undertaking : Rs. Nil

c) Investor Education and Protection Fund shall be credited by the following amounts as and when they become due :

Unclaimed Dividend Rs. 33.34 Lakhs

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