Accounting Policies of Garden Silk Mills Ltd. Company

Mar 31, 2018

A. Summery of Significant Accounting Policies

A.1. Compliance with Ind AS:

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, asamendedfrom time to time.

Up to the year ended 31 March 2017, the Company prepared its financial statements in accordance with the requirements of previous Generally Accepted Accounting Principles in India (“Indian GAAP”), which includes standards notified under the Companies (Accounting Standards) Rules, 2014. These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016 (transition date). Refer note “E” for the details of first time adoption exemptions availed by the Company.

The financial statements are approved for issue by the Company’s Board of Directors on 30th May 2018.

A.2. Basis for Preparation of Financial Statements:

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities (including derivative financial instruments) that are measured at fair value at the end of each reporting period. Historical cost is generally based on the fair value of the considerations given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The financial statements are presented in INR (?) and all the values are rounded off to the nearest lakh except when otherwise indicated.

A.3. Key Sources of Estimation:

The preparation of financial statements in conformity with Ind AS requires that management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as on the date of the financial statements. Examples of such estimates include theuseful lives of tangible and intangible fixed assets, deferred tax assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Differences, if any, between the actual results and estimates are recognised in the period in which the results are known.

A.4. Property, Plant andEquipment and Other Intangible Assets:

Property, Plant and Equipment

Property, plant and equipment held for use in production or supply of goods or services or for administrative purposes are stated at cost less accumulated depreciation/amortization less accumulated impairment, if any. The cost of fixed assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.

Capital work-in-progress for production, supply of administrative purposes is carried at cost less accumulated impairment loss, if any, until construction and installation are complete and the asset is ready for its intended use.

Depreciation is recognized (other than on capital work-in-progress) on a straight line method over the estimated useful lives of assets except on the Factory Buildings and Plant & Machineries pertaining to Draw Winding & Draw Twisting section, specific Power Projects situated at Jolwa, Draw Warping situated at Jolwa&Vareli which is on Written Down Value method,as per schedule-II to the companies act 2013. Depreciation on assets acquired/ purchased, sold/discarded during the year is provided on a pro-rata basis from the date of each addition till the date of sale/retirement. The estimated useful lives of assets are stated below:

* Estimated useful life of assets consistent with the useful life specified in the Schedule II of the Companies Act, 2013.

The economic useful lives of assets is assessed based on a technical evaluation, taking into account the nature of assets, the estimated usage of assets, the operating conditions of the assets, past history of replacement, anticipated technological changes, maintenance history, etc. The estimated useful life is reviewed at the end of each reporting period, with effect of any change in estimate being accounted for on a prospective basis.

Where the cost of part of the asset is significant to the total cost of the assets and the useful life of that part is different from the useful of the remaining asset, useful life of that significant part is determined separately. Depreciation of such significant part, if any, is based on the useful life of that part.

Freehold land is not depreciated.

An item of Property, Plant and Equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of Property, Plant and Equipment, determined as the difference between the sales proceeds and the carrying amount of the asset, is recognized in the Statement of Profit or Loss.

For transition to Ind AS, the Company has elected to continue with the carrying value of all of its Property,Plant and Equipment recognized as at April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as the deemed cost as of the transition date.

As per Ind AS 101, First Time Adoption of Ind AS, the Company continues to adopt the provisions of para 46 / 46A of Accounting Standard-11, “The Effects of Changes in Foreign Exchange Rates”. Accordingly, exchange differences arising on restatement / settlement of long-term foreign currency borrowings as of April 01, 2016 (Date of Transition to Ind AS) relating to acquisition of depreciable assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets.

Intangible Assets:

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization. Amortization is recognized on a written down value over their estimated useful lives, which reflects the pattern in which the asset’s economic benefits are consumed. The estimated useful life, the amortization method and the amortization period are reviewed at the end of each reporting period, with effect of any change in estimate being accounted for on a prospective basis.

An intangible asset is derecognized on disposal or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in the profit or loss when the asset is derecognized.

For transition to Ind AS, the Company has elected to continue with the carrying value of all of intangible assets recognized as at April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as the deemed cost as of the transition date.

A.5. Impairment of Tangible & Intangible Assets:

At the end of each reporting period, the Company reviews the carrying amounts of tangible and Intangibleassets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of individual asset, the Company estimates the recoverable amount of the cash generating unit to which an individual asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing, value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the Statement of Profit or Loss.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. The reversal of an impairment loss is recognized immediately in the Statement of Profit or Loss.

A.6. Inventories:

Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition is accounted for as follows:

Raw materials, stores and spare parts and traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.

Finished goods and work in progress: cost includes cost of direct materials and labor and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on weighted average basis.

Net realisable value represents the estimated selling price for inventories less all estimated cost of completion and costs necessary to make the sale.

A.7. Revenue Recognition:

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of excise duty and net of returns, trade allowances, rebates, value added taxes, goods and service tax and amounts collected on behalf of third parties. Revenue from sale of goods is recongnised when the substantial risks and rewards of ownership are transferred to the buyer which generally coincides with dispatch of goods from factory/stock points.

Sale of Goods

Sales are recorded net of trade discounts, quantity discounts, rebates, indirect taxes. Sales include Excise duty but exclude Sales tax, value added tax and goods and service tax. Sales also include, sales of scrap, waste, rejection etc.

Interest Income

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset’s net carrying amount on initial recognition.

A.8. Foreign Currencies:

The financial statements are presented in Indian rupees, which is the functional currency of the Company.

Transactions in currencies other than the Company’s functional currency are recognized at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the closing exchange rate prevailing as at the reporting date. Non-monetary assets and liabilities denominated in a foreign currency are translated using the exchange rate prevailing at the date of initial recognition (in case measured at historical cost) or at the rate prevailing at the date when the fair value is determined (in case measured at fair value).

Foreign exchange differences are recognized in profit or loss in the period in which they arise except for exchange difference on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest cost on those foreign currency borrowings.

A.9. Employee Benefits:

Short-Term Employee Benefits:

A liability is recognized for benefits accruing to employees in respect of wages and salaries in the period the related service is rendered at the undiscounted amount of the benefit that is expected to be paid in exchange for that service.

Other Long-Term Employee Benefits

The liability for earned leave is not expected to be settled wholly within twelve months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method with actuarial valuations being carried out at each balance sheet date. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in other comprehensive income.

Post-Employment Benefits

(a) Defined Contribution Plans

Payments to defined contribution retirement benefit plans are recognized as expenses when the employees have rendered the service entitling them to the contribution.

Provident fund: The employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees’ basic salary (currently 12% of employees’ basic salary). The contributions as specified under the law are made to the provident fund and pension fund administered by the Regional Provident Fund Commissioner. The Company recognizes such contributions as an expense when incurred.

(b) Defined Benefit Plans

For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurements, comprising actuarial gains and losses, the effect of changes to asset ceiling (if applicable) and the return on plan assets (excluding net interest), is recognized in other comprehensive income in the period in which they occur. Re-measurements recognized in other comprehensive income are reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in the Statement of Profit or Loss in the period of plan amendment.

Defined benefit costs comprising service cost (including current and past service cost and gains and losses on curtailments and settlements) and net interest expense or income is recognized in profit or loss.

The defined benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

Gratuity: The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15/26 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity fund established as trust. The Company accounts for the liability for gratuity benefits payable in future based on an independent actuarial valuation carried out at each balance sheet date using the projected unit credit method.

(c) Termination Benefits

Termination benefits such as compensation under employee separation schemes are recognised as expense in the period in which they are incurred.

A.10. Borrowing Costs:

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

A.11. Taxation:

Income tax expense represents the sum of tax currently payable and deferred tax.

Current Tax

The tax currently payable is based on the taxable profit for the year. Taxable profit differs from profit before tax as reported in the statement of profit or loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The current tax is calculated using the tax rates that have been enacted or substantially enacted by the end of the reporting period.

Advance taxes and provisions for current income taxes are presented in the balance sheet after offsetting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying units intends to settle the asset and liability on net basis.

Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.

The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.

Current Tax and Deferred Tax for the year

Current and deferred tax are recognized in the Statement of Profit or Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

The Company has unabsorbed depreciation and carried forward losses under Tax laws. In absence of reasonablecertanity of sufficient future taxable income,net deferred tax assets have not been recognised considering prudence in accordance with IndAS 12 Income taxes.

A.12. Provisions:

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

The amount recognized as provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent Liabilities and Contingent Assets

Contingent liabilities and contingent assets, if any, are disclosed in the notes to accounts.

A.13. Financial Instruments:

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial Assets

Initial Recognition and Measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognised using trade date accounting.

Subsequent Measurement

Financial Assets Carried at Amortised Cost (AC)

A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial Assets at Fair Value through Other Comprehensive Income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial Assets at Fair Value through Profit or Loss (FVTPL)

A financial asset which is not classified in any of the above categories are measured at FVTPL.

Investment in Subsidiaries, Associates and Joint Ventures

The Company has accounted for its investments in subsidiaries, associates and joint venture at cost.

Other Equity Investments

All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ‘Other Comprehensive Income’.

Impairment of Financial Assets

In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss’ (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).

Expected credit losses are measured through a loss allowance at an amount equal to:

- The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

- Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)

For trade receivables Company applies ‘simplified approach’ which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.

For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.

Financial Liabilities

Initial Recognition and Measurement

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.

Subsequent Measurement

Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

De-recognition

Financial liabilities are derecognized when, and only when, the obligations are discharged, cancelled or have expired. An exchange with a lender of a debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

The difference between the carrying amount of a financial liability derecognized and the consideration paid or payable is recognized in the Statement of Profit or Loss.

Foreign Exchange Gains and Losses

Financial liabilities denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in the Statement of Profit or Loss.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognized in the Statement of Profit and Loss.

A.14. Derivative Financial Instruments:

The Company enters into derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts. Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and subsequently re-measured at their fair value at the end of each reporting period. The resulting gain or loss is recognized in the Statement of Profit or Loss immediately. The Company has not designated any derivative financial instrument as a hedging instrument.

Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of Ind AS 109 are treated as separate derivatives where the risk and characteristics are not closely related to the host contracts and the host contracts are bot measured at fair value through profit or loss.

A.15. Cash and Cash Equivalents:

Cash and cash equivalents comprise cash in hand and unencumbered, highly liquid bank and other balances (with original maturity of three months or less) that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value

A.16. Statement of Cash Flow:

Cash flow statement is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the net profits for the effects of:

i. transactions of a non-cash nature

ii. any deferrals or accruals of past or future operating cash receipts or payments and

iii. items of income or expense associated with investing or financing cash flows

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.

A.17. Events after Reporting Date:

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date only of material size or nature are disclosed

A.18. Earnings Per Share:

The Company reports basic and diluted earnings per share (EPS) in accordance with Indian Accounting Standard 33 “Earnings per Share”. Basic EPS is computed by dividing the net profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit or loss attributable to ordinary equity holders of the parent entity by weighted average number of equity shares outstanding during the year as adjusted for the effects of the effects of all dilutive potential ordinary shares dilutive potential equity shares (except where the results are anti-dilutive).

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Mar 31, 2016

1.01 Basis of accounting and preparation of financial statements

The financial statements have been prepared under the historical cost convention in accordance with the Generally Accepted Accounting Principles including the Accounting Standards notified under the provisions of The Companies Act, 2013. The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise are consistent with the generally accepted accounting principles.

1.02 Fixed Assets:

Tangible Assets

Fixed Assets are recorded at cost of acquisition or construction, net of CENVAT / VAT and include amounts added / reduced on revaluation, less accumulated depreciation. These assets have been stated at historical cost, except for the Fixed Assets which have been revalued. Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred, (including expenditure on test runs and experimental production) at project sites for the period prior to commencement of commercial production are capitalized as part of asset cost.

Intangible Assets

Intangible assets ate stated at cost of acquisition less accumulated amortization.

1.03 Capital Work-in-Progress

Projects under commissioning and other capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.04 Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date in respect of Cash Generating Unit, if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount exceeds its recoverable amount. The recoverable amount is the greater of the asset''s selling price and value in use.

1.05 Investments

Investments classified as long term investments are stated at cost. Provision is made to recognize decline, other than temporary, in the value of investments. Investments classified as Current Investments are carried in Financial Statements at lower of Cost and fair value, computed category wise.

1.06 Inventories

Inventories are valued in accordance with the requirements of revised Accounting Standard (AS2) on ''Valuation of Inventories'' issued by the Institute of Chartered Accountants of India (ICAI) using weighted average cost method. Any item of inventory is valued at Net Realizable Value if the same is less than cost. Inventories are specifically identified, wherever possible in respect of traded goods. Inventory valuation is determined on the following basis :

(i) Raw Materials, Stock in Process, Finished goods, Stores Spares & Chemicals are valued at cost or Net realizable value, whichever is lower.

(ii) Waste is valued at net realizable value.

(iii) By product is valued at net realizable value.

(iv) Property under Development is valued at cost.

1.07 Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at a rate prevalent on the date of transaction.

At each Balance Sheet date, unrealized gains or losses on foreign currency transactions on revenue account as a result of increase or decrease in rupee liability as a result of exchange difference between the Balance Sheet date conversion rate and the transaction rate are recorded to the Profit & Loss account, and accordingly, assets or liabilities are adjusted.

Difference between forward rate and the exchange rate at the inception of a forward contract is recognized as income or expense over the life of a contract, and any unrealized gains or losses on account of fluctuations in the exchange rate pertaining to forward contracts at the Balance sheet date arising out of difference between the forward contract rate and year-end rate are recognized in the Profit and Loss account.

1.08 Depreciation and Amortization

Depreciation on the fixed assets is calculated on Straight Line Method, except on the Factory Buildings and Plant & Machineries pertaining to Draw Winding & Draw Twisting section, specific Power Projects situated at Jolwa, Draw Warping & Gas Based Power Project situated at Vareli which is on Written Down Value method. Depreciation on revalued Assets is charged by dividing the unamortized depreciable amount over the residual useful life of the Assets. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets is provided over the residual life of the assets. Intangible asset is amortized over the useful life of the underlying asset.

1.09 Revenue Recognisation

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for returns, discount, rate difference and Value Added Tax (VAT) on dispatch of goods to customers and gain/loss on corresponding hedge contracts. Sales also include sale of scrap, waste, rejects, empty containers etc. Dividend income is recognized when right to receive payment is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

1.10 Expenses

All material known liabilities are provided for, on the basis of available information / estimates.

1.11 CENVAT:

(i) The purchase cost of raw materials and other expenses are considered net of cenvat available on inputs.

(ii) The cenvat benefits attributable to acquisition / construction of fixed assets are netted off against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

1.12 Excise Duty and VAT

Excise Duty is accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses & un cleared goods and the same is treated as part of the cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty issued by The Institute of Chartered Accountants of India.

Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock & Opening Stock. Excise duty related to the difference between Closing Stock & Opening Stock is recognized separately in the Profit & Loss Account.

Sales Tax / VAT payable/paid is charged to the Profit and Loss account.

1.13 Employees Benefits

Contributions are made to Provident Fund as per the Provident Fund Act. Contribution to Gratuity Fund are made on the basis of actuarial valuation report as at the year end. Provision for Leave encashment benefit is provided in accordance with the Accounting Standard (AS)15 "Employee Benefits" issued by the Institute of Chartered Accountants of India (ICAI).

(i) Short Term Employee Benefits

All employee benefits falling due within twelve months of rendering of service are classified as short term employee benefits. The benefits like salaries, wages, bonus, leave salary ex-gratia are recognized in the period in which employee renders the related services.

(ii) For Defined Contribution Plans (PF, FPF and ESI)

Contributions to Defined Contribution Plans are recognized as expenses in the Profit and Loss Account as they incur.

(iii) For Defined Benefit Plans

As per requirement defined in Accounting Standard 15- "Employee Benefits" issued by the Institute of Chartered Accountants of India, the entity relies on the Acturial valuation undertaken by a certified actury for the present value of obligation.

1.14 Research and Development

All revenue expenditure on research and development are charged to the Profit and Loss Account for the year in which they are incurred.

1.15 Inter-divisional Transfers

Internal transfers of goods between departments as captive consumption are shown as contra items in the Profit and Loss Account to reflect the true economic value of the production. Any unrealized profit on unsold stock is ignored while valuing inventories.

1.16 Borrowing Cost

Borrowing cost (including interest and exchange difference arising from foreign exchange borrowings) to the extent that they are regarded as the adjustments to interest costs directly attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortized and charged to the Profit and Loss Account, over the tenure of the loan.

1.17 Provision for Current and Deferred Tax

Provision for the current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.Deferred tax resulting from ''timing difference'' between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realization and their required recognition.

1.18 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Liabilities which are material, and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent, and disclosed by way of notes to the accounts.

Contingent Assets are neither recognized nor disclosed in the financial statement. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

1.19 Earning Per Share

Basic Earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the year. Diluted Earning per share is calculated by considering potential equity shares that have been converted, from the beginning of the period.

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Mar 31, 2015

1.01 Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention in accordance with the Generally Accepted Accounting Principles including the Accounting Standards notified undet the provisions of The Companies Act, 2013. The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise are consistent with the generally accepted accounting principles.

1.02 Fixed Assets:

Tangible Assets

Fixed Assets are recorded at cost of acquisition or construction, net of CENVAT / VAT and include amounts added / reduced on revaluation, less accumulated depreciation. These assets have been stated at historical cost, except for the Fixed Assets which have been revalued. Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred, (including expenditure on test runs and experimental production) at project sites for the period prior to commencement of commercial production are capitalised as part of asset cost.

Intangible Assets

Intangible assets ate stated at cost of acquisition less accumulated amortisation.

1.03 Capital Work-in-Progress

Projects under commissioning and other capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.04 Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date in respect of Cash Generating Unit, if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount exceeds its recoverable amount. The recoverable amount is the greater of the asset''s selling price and value in use.

1.05 Investments

Investments classified as long term investments are stated at cost. Provision is made to recognize decline, other than temporary, in the value of investments. Investments classified as Current Investments are carried in Financial Statements at lower of Cost and fair value, computed categorywise.

1.06 Inventories

Inventories are valued in accordance with the requirements of revised Accounting Standard (AS2) on ''Valuation of Inventories'' issued by the Institute of Chartered Accountants of India (ICAI) using weighted average cost method. Any item of inventory is valued at Net Realisable Value if the same is less than cost. Inventories are specifically identified, wherever possible in respect of traded goods. Inventory valuation is determined on the following basis :

(i) Raw Materials, Stock in Process, Finished goods, Stores Spares & Chemicals are valued at cost or Net realisable value, whichever is lower.

(ii) Waste is valued at net realisable value.

(iii) By product is valued at net realisable value.

(iv) Property under Development is valued at cost.

1.07 ForeignCurrencyTransactions

Transactions denominated in foreign currencies are recorded at a rate prevelant on the date oftransaction.

At each Balance Sheet date, unrealized gains or losses on foreign currency transactions on revenue account as a result of increase or decrease in rupee liability as a result of exchange difference between the Balance Sheet date conversion rate and the transaction rate are recorded to the Profit & Loss account, and accordingly, assets or liabilities are adjusted.

Difference between forward rate and the exchange rate at the inception of a forward contract is recognized as income or expense over the life of a contract, and any unrealized gains or losses on account of fluctuations in the exchange rate pertaining to forward contracts at the Balance sheet date arising out of difference between the forward contract rate nd year-end rate are recognised in the Profit and Loss account.

1.08 Depreciation and Amortisation

Depreciation on the fixed assets is calculated on Straight Line Method, except on the Factory Buildings and Plant & Machineries pertaining to Draw Winding & Draw Twisting section, specific Power Projects situated at Jolwa, Draw Warping & Gas Based Power Project situated at Vareli which is on Written Down Value method. Depreciation on revalued Assets is charged by dividing the unamortised depreciable amount over the residual useful life of the Assets. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets is provided overthe residual life ofthe assets.

Intangible asset is amortised over the useful life of the underlying asset.

Consequent to the applicability of the Companies Act, 2013 with effect from 1st April, 2014, during the year ended 31st March, 2015, the depreciation is provided as per the useful life specified in the Act or as re-assessed by the Company.

1.09 Revenue Recognisation

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for returns, discount, rate difference and Value Added Tax (VAT) on dispatch of goods to customers and gain/loss on corresponding hedge contracts. Sales also include sale of scrap, waste, rejects, empty containers etc.

Dividend income is recognized when right to receive payment is established.

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

1.10 Expenses

All material known liabilities are provided for, on the basis of available information / estimates.

1.11 CENVAT:

(i) The purchase cost of raw materials and other expenses are considered net of cenvat available on inputs.

(ii) The cenvat benefits attributable to acquisition / construction of fixed assets are netted off against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

1.12 Excise Duty and VAT

Excise Duty is accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses & uncleared goods and the same is treated as part ofthe cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty issued by The Institute of Chartered

Accountants of India.

Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock & Opening Stock. Excise duty related to the difference between Closing Stock & Opening Stock is recognised separately in the Profit & Loss Account.

SalesTax / VAT payable/paid is charged to the Profit and Loss account.

1.13 Employees Benefits

Contributions are made to Provident Fund as per the Provident Fund Act. Contribution to Gratuity Fund are made on the basis of actuarial valuation report as at the year end. Provision for Leave encashment benefit is provided in accordance with the Accounting Standard (AS)15 "Employee Benefits" issued by the Institute of Chartered Accountants of India (ICAI).

(i) Short Term Employee Benefits

All employee benefits falling due within twelve months of rendering of service are classified as short term employee benefits. The benefits like salaries, wages, bonus, leave salary ex-gratia are recognised in the period in which employee renders the related services.

(ii) For Defined Contribution Plans (PF, FPF and ESI)

Contributions to Defined Contribution Plans are recognized as expenses in the Profit and Loss Account as they are incur.

(iii) For Defined Benefit Plans

As per requirement defined in Accounting Standard 15 - "Employee Benefits" issued by the Institute of Chartered Accountants of India, the entity relies on the Acturial valuation undertaken by a certified actury for the present value of obligation.

1.14 Research and Development

All revenue expenditure on research and development are charged to the Profit and Loss Account for the year in which they are incurred.

1.15 Inter-divisional Transfers

Internal transfers of goods between departments as captive consumption are shown as contra items in the Profit and Loss Account to reflect the true economic value of the production. Any unrealised profit on unsold stock is ignored while valuing inventories.

1.16 Borrowing Cost

Borrowing cost (including interest and exchange difference arising from foreign exchange borrowings) to the extent that they are regarded as the adjustments to interest costs directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortised and charged to the Profit and Loss Account, over the tenure of the loan.

1.17 Provision for Current and Deferred Tax

Provision for the current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.Deferred tax resulting from ''timing difference'' between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realisation and their required recognition.

1.18 Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources.

Liabilities which are material, and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent, and disclosed by way of notes to the accounts.

Contingent Assets are neither recognized nor disclosed in the financial statement. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

1.19 EarningPerShare

"Basic Earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the year.

Diluted Earning per share is calculated by considering potential equity shares that have been converted, from the begining ofthe period"

2.1 As per the terms of issue and in accordance with the provisions of SEBI (ICDR) Regulation, 2009, the management committee of Board of Directors of the Company at its meeting held on 23rd September, 2013 allotted 1487147 OCCPS of Rs. 10 each at a premium of Rs. 37.07 each in favour of Praful Amichand Shah, Partner of M/s. Isha Enterprises, the promoter and/or promoter group of the Company.

2.2 As per the terms of issue and in accordance with the provisions of SEBI (ICDR) Regulation, 2009 and consequent to the rights of conversion exercised by the OCCPS holders, the Board of Directors of the Company at its meeting held on 18th March, 2015, allotted 1949860 equity shares ofRs. 10/- each at a premium of Rs. 25.90 per share in favour of Praful Amichand Shah, Partner of M/s. Isha Enterprises, the promoter and/or promoter group of the Company, against 1487147, 0.001% OCCPS held by the promoters at the beginning of the year.

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Mar 31, 2014

1.01 Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956. The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise are consistent with the generally accepted accounting principles.

1.02 Fixed Assets:

Tangible Assets

Fixed Assets are recorded at cost of acguisition or construction, net of CENVAT / VAT and include amounts added / reduced on revaluation, less accumulated depreciation. These assets have been stated at historical cost, except for the Fixed Assets which have been revalued. Borrowing costs for acguisition or construction of a qualifying asset and revenue expenses incurred, (including expenditure on test runs and experimental production) at project sites for the period prior to commencement of commercial production are capitalised as part of asset cost.

Intangible Assets

Intangible assets are stated at cost of acguisition less accumulated amortisation.

1.03 Capital Work-in-Progress

Projects under commissioning and other capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.04 Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date in respect of Cash Generating Unit, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount exceeds its recoverable amount. The recoverable amount is the greater of the asset''s selling price and value in use.

1.05 Investments

Investments classified as long-term investments are stated at cost. Provision is made to recognise decline, other than temporary, in the value of investments. Investments classified as Current Investments are carried in Financial Statements at lower of Cost and fair value, computed categorywise.

1.06 Inventories

Inventories are valued in accordance with the reguirements of revised Accounting Standard (AS2) on ''Valuation of Inventories''issued by the Institute of Chartered Accountants of India (ICAI) using weighted average cost method. Any item of inventory is valued at Net Realisable Value if the same is less than cost. Inventories are specifically identified, wherever possible in respect of traded goods. Inventory valuation is determined on the following basis:

(i) Raw Materials, Stock-in-Process, Finished goods, Stores Spares & Chemicals are valued at cost or Net realisable value, whichever is lower.

(ii) Waste is valued at net realisable value.

(iii) By product is valued at net realisable value.

(iv) Property under Development is valued at cost.

1.07 Foreign Currency Transactions

In Practice, transactions denominated in foreign currencies are recorded at a rate for a defined set of period that approximates the actual rate of the transactions.

At each Balance Sheet date, unrealised gains or losses on foreign currency transactions on revenue account as a result of increase or decrease in rupee liability as a result of exchange difference between the Balance Sheet date conversion rate and the transaction rate are recorded to the Profit and Loss account, and accordingly, assets or liabilities are adjusted.

Difference between forward rate and the exchange rate at the inception of a forward contract is recognised as income or expense over the life of a contract, and any unrealised gains or losses on account of fluctuations in the exchange rate pertaining to forward contracts at the Balance sheet date are recognised in the Profit and Loss account.

1.08 Depreciation and Amortisation

Depreciation on the fixed assets is calculated on Straight Line Method at the rates prescribed in Schedule XIV to The Companies Act, 1956, except on the Factory Buildings and Plant & Machineries pertaining to DrawWinding & DrawTwisting section, specific Power Projects situated at Jolwa, Draw Warping & Gas Based Power Project situated at Vareli which is on Written Down Value method. Depreciation on revalued Assets is charged by dividing the unamortised depreciable amount over the residual useful life of the Assets. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acguisition of fixed assets is provided over the residual life of the assets. Intangible asset is amortised over the useful life of the underlying asset.

1.09 Revenue Recognisation

Revenue is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for returns, discount, rate difference and Value Added Tax (VAT) on dispatch of goods to customers and gain/loss on corresponding hedge contracts. Sales also include sale of scrap, waste, rejects, empty containers etc. Dividend income is recognised when right to receive payment is established. Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

1.10 Expenses

All material known liabilities are provided for, on the basis of available information /estimates.

1.11 CENVAT

(i) The purchase cost of raw materials and other expenses has been considered net ofcenvat available on inputs.

(ii) The cenvat benefits attributable to acguisition / construction of fixed assets is netted off against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

1.12 Excise Duty and VAT

Excise Duty is accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses and uncleared goods and the same is treated as part of the cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty issued by The Institute of Chartered Accountants of India. Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock and Opening Stock. Excise duty related to the difference between Closing Stock and Opening Stock is recognised separately in the Profit and Loss Account. Sales Tax /VAT payable/paid is charged to the Profit and Loss account.

1.13 Employees Benefits

Contributions are made to Provident Fund as per the Provident Fund Act. Contribution to Gratuity Fund are made on the basis of actuarial valuation report as at the year end. Provision for Leave encashment benefit is provided in accordance with the Accounting Standard (AS) 15 "Employee Benefits" issued by the Institute of Chartered Accountants of India (ICAI).

(i) Short-Term Employee Benefits

All employee benefits falling due within twelve months of rendering the service are classified as short-term employee benefits. The benefits like salaries, wages, bonus, leave salary ex-gratia are recognised in the period in which employee renders the related services.

(ii) For Defined Contribution Plans (PF FPF and ESI)

Contributions to Defined Contribution Plans are recognised as expenses in the Profit and Loss Account as they are incurred.

(iii) For Defined Benefit Plans

As per requirement defined in Accounting Standard 15 -"Employee Benefits" issued by the Institute of Chartered Accountants of India, the entity has relied on the Acturial valuation undertaken by the certified actury for the present value of obligation.

1.14 Research and Development

All revenue expenditure on research and development are charged to the Profit and Loss Account for the year in which they are incurred.

1.15 Inter-divisional Transfers

Internal transfers of goods between departments as captive consumption are shown as contra items in the Profit and Loss Account to reflect the true economic value of the production. Any unrealised profit on unsold stock is ignored while valuing inventories.

1.16 Borrowing Cost

Borrowing cost (including interest and exchange difference arising from foreign exchange borrowings) to the extent that they are regarded as the adjustments to interest costs directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortised and charged to the Profit and Loss Account, over the tenure of the loan.

1.17 Provision for Current and Deferred Tax

Provision for the current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from''timing difference''between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognised only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realisation.

2.1 As per the terms of issue and in accordance with the provisions of SEBI (ICDR) Regulation, 2009, the management committee of Board of Directors of the Company at its meeting held on 23rd September, 2013 allotted 1487147 OCCPS of Rs. 10/- each at a premium of Til.07 each in favour of Praful Amichand Shah, Partner of M/s. Isha Enterprises, the promoter and/or promoter group of the Company.

2.2 The OCCPS shall be converted into Eguity Shares, partially or fully, in one or more tranches, at the sole option of the OCCPS holder but not in any case later than 18 (eighteen) months from the date of allotment.

2.3 As per the terms of issue and in accordance with the provisions of SEBI (ICDR) Regulation, 2009, conseguentto the rights of conversion exercised by the warrant holders, the Board of Directors of the Company at its meeting held on 19th March, 2014 allotted 1842105 eguity shares of Rs.10/- each at a premium of Rs.28/- per share in favour of Praful Amichand Shah, Partner of M/s. Isha Enterprises, the promoter and/or promoter group of the Company.

2.4 Rights, Preferences and Restrictions attached to Shares

Equity Shares:

The Company has two class of shares referred to as Equity Shares and Optionally Convertible Cumulative Preference Shares (OCCPS), having a par value of Rs.10/- each. Each equity shareholders is entitled to one vote per share held. The dividend as and when proposed by the Board of Directors is subject to the approval of the shareholders at the Annual General Meeting. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

OCCPS holder shall have option to apply for and obtain allotment, from time to time, not later than 18 (eighteen) months from the date of allotment of OCCPS, of such number of fully paid-up equity shares of the face value of Rs.10/- each ("Equity Shares") against conversion of the OCCPS in such manner and on such price, terms and conditions as determined by the Board, such that the total issue size of the preferential allotment does not exceed an aggregate value ofRs. 7.00 Crores (including, premium if any, on such Equity Shares), in accordance with the provisions of Chapter VII of the SEBI (ICDR) Regulations or other provisions of the law as may be prevailing at that time.

3.1 During the previous year, the Company had issued and allotted convertible warrants aggregating to Rs. 7.00 Crores in accordance with the SEBI (ICDR) Regulations, 2009, as amended, in favour of Promoters on preferential basis as part of the arrangement with the lenders to realign debts repayment schedules.

As per the terms of issue and in accordance with the provisions of SEBI (ICDR) Regulation, 2009, consequent to the rights of conversion exercised by the warrant holders, the Board of Directors of the Company at its meeting held on 19th March, 2014 allotted 1842105 equity shares ofRs. 10/- each at a premium ofRs. 28/- per share in favour of Praful Amichand Shah, Partner of M/s. Isha Enterprises, the promoter and/or promoter group of the Company.

4.1 During the previous year, the Company had received an Application Money of Rs. 7.00 Crores by way of Promoters'' contribution for issue of 0.001 % Optionally Convertible Cumulative Preference Shares (OCCPS), as part of the arrangement with the lenders to realign debts repayment schedules.

5.1 Note on Secured Long-Term Borrowings:

a) Term Loans from Banks and Financial Institutions are secured by first mortgage on par/passu basis on all immovable properties (except those specifically excluded by lenders, of Rupee Term Loans as per Note (b) below), both present and future and first charge by way of hypothecation of all movables (except book debts) both present and future subject to prior charges created/to be created in favour of Bankers for working capital borrowings.

b) Of the Rupee Term Loans from banks:

i) Loans from Bank of India to the extent of Rs. 250.00 Lacs (Previous year Rs. 245.43 Lacs) are secured by hypothecation of specific machinery of Fully Drawn Yarn (FDY) Project at Jolwa.

ii) Loans from Bank of India to the extent of Rs. 1191.11 Lacs (Previous year Rs. 1185.74 Lacs) are secured by hypothecation of specific Building and machinery of Texturising plant and DrawTwisting plant at Jolwa.

iii) Term loans from ICICI Bank, Kotak Mahindra Prime Limited and Axis Bank Ltd. aggregating to Rs. 116.03 Lacs (Previous year Rs. 139.88 Lacs) under vehicle finance scheme are secured by an exclusive charge by way of hypothecation of specific vehicles purchased under the arrangements.

iv) Housing Loan of Rs. 643.21 Lacs (PreviousyearRs. 713.92 Lacs) from ICICI Bankis secured by hypothecation of residential flat at Mumbai.

v) Loans from Corporation Bank to the extent ofRs. 3640.00 Lacs (Previous Year Rs. 3640.00 Lacs) are secured by hypothecation of movable fixed assets of Specific Continuous Polymerisation Project at Jolwa.

vi) Loan from Union Bank of India to the extent ofRs. 5248.90 Lacs (Previous Year Rs. 5248.90 Lacs) is secured by hypothecation of specific machinery of Coal Based Thermal Power Project at Jolwa.

c) During the year 2011-12, the Company had entered into an arrangement with lenders to realign its principal debt repayment schedule and has secured the consent of lenders to spread its term loan repayment over a period of 8 years, after a moratorium of 2 years.

d) As on the Balance Sheet date, the payment of interest for the month of February 14 and March 14, aggregating to Rs. 1371.77 Lacs to various lender banks/institutions were unpaid.

6.1 The Company has unabsorbed depreciation and carried forward losses under Tax laws. In absence of virtual certanty of sufficient future taxable income,net deferred tax assets has not been recognised by way of prudence in accordance with Accounting Standard (AS) 22"Acounting forTaxeson Income" issued by the Institute of Chartered Accountants of India.

7.1 Cash Credit facilities are part of Working Capital facilities availed from Consortium of Banks and are secured with hypothecation by way of first pari passu charge on all company''s current assets and by way of second pari passu charge on immovable and all movable properties (excluding current assets) of the Company Rate of Interest on Cash Credit facilities ranged between 11.50% to 11.80%.

7.2 Buyers''Credit is secured by Letter of Comfort (LOC) / Undertaking (LOU) which is a part of Working Capital facilities issued by the banks. Rate of Interest on Buyers''Credit facility is ranging between 100-120 bps above the Libor at the relevant time.

8.1 The Company had recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 31st March, 2013 of Rs. 1752.10 Lacs as per the estimated pattern of dispatches. On the analogy, provision for such liability works out to beRs. 916.91 Lacs as on 31st March, 2014. Actual outflow is expected in next financial year.

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Mar 31, 2013

1.01 Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of The Companies Act, 1956. The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise are consistent with the generally accepted accounting principles.

1.02 Fixed Assets:

Tangible Assets

Fixed Assets are recorded at cost of acguisition or construction, net of CENVAT / VAT and include amounts added / reduced on revaluation, less accumulated depreciation. These assets have been stated at historical cost, except for the Fixed Assets which have been revalued. Borrowing costs for acguisition or construction of a qualifying asset and revenue expenses incurred, (including expenditure on test runs and experimental production) at project sites for the period prior to commencement of commercial production are capitalised as part of asset cost.

Intangible Assets

ntangible assets ate stated at cost of acguisition less accumulated amortisation.

1.03 Capital Work-in-Progress

Projects under commissioning and other capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.04 Impairment of Assets

The carrying amount of assets are reviewed at each Balance Sheet date in respect of Cash Generating Unit, if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount exceeds its recoverable a mount. The recoverable amount is the greater of the asset''s selling price and value in use.

1.05 Investments

nvestments classified as long-term investments are stated at cost. Provision is made to recognise decline, other than temporary, in the value of investments. Investments classified as Current Investments are carried in Financial Statements at lower of Cost and fair value, computed categorywise.

1.06 Inventories

nventories are valued in accordance with the reguirements of revised Accounting Standard (AS2) on ''Valuation of nventories''issued by the Institute of Chartered Accountants of India (ICAI) using weighted average cost method. Any item of inventory is valued at Net Realisable Value if the same is less than cost. Inventories are specifically identified, wherever possible in respect of traded goods. Inventory valuation is determined on the following basis:

(i) Raw Materials, Stock-in-Process, Finished goods, Stores Spares and Chemicals are valued at cost or Net realisable value, whichever is lower.

(ii) Waste is valued at net realisable value.

(iii) By product is valued at net realisable value.

(iv) Property under Development is valued at cost.

1.07 Foreign Currency Transactions

In Practice, transactions denominated in foreign currencies are recorded at a rate for a defined set of period that approximates the actual rate of the transactions.

At each Balance Sheet date, unrealised gains or losses on foreign currency transactions on revenue account as a result of increase or decrease in rupee liability as a result of exchange difference between the Balance Sheet date conversion rate and the transaction rate are recorded to the Profit and Loss account, and accordingly, assets or liabilities are adjusted.

Difference between forward rate and the exchange rate at the inception of a forward contract is recognised as income or expense over the life of a contract, and any unrealised gains or losses on account of fluctuations in the exchange rate pertaining to forward contracts at the Balance sheet date are recognised in the Profit and Loss account.

1.08 Depreciation and Amortisation

Depreciation on the fixed assets is calculated on Straight Line Method at the rates prescribed in Schedule XIV to The Companies Act 1956, except on the Factory Buildings and Plant and Machineries pertaining to Draw Winding & Draw Twisting section, specific Power Projects situated at Jolwa, Draw Warping & Gas Based Power Project situated atVareli which is on Written Down Value method. Depreciation on revalued Assets is charged by dividing the unamortised depreciable amount over the residual useful life of the Assets. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acguisition of fixed assets is provided over the residual life of the assets. Intangible asset is amortised over the useful life of the underlying asset.

1.09 Revenue Recognisation

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for returns, discount, rate difference and Value Added Tax (VAT) on dispatch of goods to customers and gain/loss on corresponding hedge contracts. Sales also include sale of scrap, waste, rejects, empty containers etc. Dividend income is recognised when right to receive payment is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

1.10 Expenses

All material known liabilities are provided for, on the basis of available information /estimates.

1.11 CENVAT:

(i) The purchase cost of raw materials and other expenses has been considered net ofcenvat available on inputs.

(ii) The cenvat benefits attributable to acguisition/construction of fixed assets is netted off against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

1.12 Excise Duty and VAT

Excise Duty is accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses and uncleared goods and the same is treated as part of the cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty issued by The Institute of Chartered Accountants of India. Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock and Opening Stock. Excise duty related to the difference between Closing Stock and Opening Stock is recognised separately in the Profit and Loss Account. Sales Tax /VAT payable/paid is charged to the Profit and Loss account.

1.13 Employees Benefits

Contributions are made to Provident Fund as per the Provident Fund Act. Contribution to Gratuity Fund are made on the basis of actuarial valuation report as at the year end. Provision for Leave encashment benefit is provided in accordance with the Accounting Standard (AS) 15 "Employee Benefits" issued by the Institute of Chartered Accountants of India (ICAI).

1.14 Research and Development

All revenue expenditure on research and development are charged to the Profit and Loss Account for the year in which they are incurred.

1.15 Inter-divisional Transfers

nternal transfers of goods between departments as captive consumption are shown as contra items in the Profit and Loss Account to reflect the true economic value of the production. Any unrealised profit on unsold stock is ignored while valuing inventories.

1.16 Borrowing Cost

Borrowing cost (including interest and exchange difference arising from foreign exchange borrowings) to the extent that they are regarded as the adjustments to interest costs directly attributable to the acguisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortised and charged to the Profit and Loss Account, over the tenure of the loan.

1.17 Provision for Current and Deferred Tax

Provision for the current tax is made after taking into consideration benefits admissible under the provisions of the ncome-tax Act, 1961. Deferred tax resulting from''timing difference''between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognised only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realisation.

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Mar 31, 2012

1.1 Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of The Companies Act, 1956. The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise are consistent with the generally accepted accounting principles.

1.2 Fixed Assets:

Tangible Assets

Fixed Assets are recorded at cost of acquisition or construction, net of CENVAT / VAT and include amounts added / reduced on revaluation, less accumulated depreciation. These assets have been stated at historical cost, except for the Fixed Assets which have been revalued. Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred, (including expenditure on test runs and experimental production) at project sites for the period prior to commencement of commercial production are capitalised as part of asset cost.

Intangible Assets

Intangible assets ate stated at cost of acquisition less accumulated amortisation.

1.3 Capital Work-in-Progress

Projects under commissioning and other capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.4 Impairment of Assets

The carrying amount of assets are reviewed at each balance sheet date in respect of Cash Generating Unit if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount exceeds its recoverable amount. The recoverable amount is the greater of the asset's selling price and value in use.

1.5 Investments

Investments classified as long term investments, are stated at cost . Provision is made to recognize decline, other than temporary, in the value of investments. Investments classified as Current Investments are carried in Financial Statements at lower of Cost and fair value, computed categorywise.

1.6 Inventories

Inventories are valued in accordance with the requirements of revised Accounting Standard (AS2) on 'Valuation of Inventories' issued by the Institute of Chartered Accountants of India (ICAI) using weighted average cost method. Any item of inventory is valued at Net Realisable Value if the same is less than cost. Inventories are specifically identified, wherever possible in respect of traded goods. Inventory valuation is determined on the following basis :

(i) Raw Materials, Stock in Process, Finished goods, Stores Spares & Chemicals are valued at cost or Net realisable value whichever is lower.

(ii) Waste is valued at net realisable value.

(iii) By product is valued at net realisable value.

(iv) Property under Development is valued at cost.

1.7 Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the rates of exchange in force at the time transactions are affected.

At each Balance sheet date, unrealized gains or losses on foreign currency transactions on account of increase or to decrease in rupee liability as a result of exchange difference between the Balance sheet date rate and the transaction rate are recorded to the Profit & Loss account, and accordingly, assets or liabilities are adjusted.

Difference between forward rate and the exchange rate at the inception of a forward contract is recognized as income or expense over the life of a contract, and any unrealized gains or losses, on account of fluctuations in the exchange rate pertaining to forward contracts at the Balance sheet date, are recognised in the Profit and Loss account.

1.8 Depreciation and Amortisation

Depreciation on fixed assets has been calculated on Straight Line Method at the rates prescribed in Schedule XIV to The Companies Act 1956, except on the Factory Buildings and Plant & Machineries pertaining to Draw Winding & Draw Twisting section, specific Power Projects situated at Jolwa, Draw Warping & Gas Based Power Project situated at Vareli which is on Written down value method. Depreciation on revalued Assets has been charged by dividing the unamortised depreciable amount over the residual useful life of the Assets. Depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets has been provided over the residual life of the assets. Intangible asset is amortised over the useful life of the underlying asset.

1.9 Revenue Recognisation

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for returns, discount, rate difference and Value Added Tax (VAT) on dispatch of goods to customers and gain/loss on corresponding hedge contracts. Sales also include sale of scrap, waste, rejects, empty containers etc. Dividend income is recognized when right to receive payment is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

1.10 Expenses

All material known liabilities are provided for, on the basis of available information / estimates.

1.11 CENVAT:

(i) The purchase cost of raw materials and other expenses has been considered net of cenvat available on inputs.

(ii) The cenvat benefits attributable to acquisition / construction of fixed assets is netted off against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

1.12 Excise Duty and VAT

Excise Duty has been accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses & uncleared goods and the same has been treated as part of the cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty issued by The Institute of Chartered Accountants of India. Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock & Opening Stock. Excise duty related to the difference between Closing Stock & Opening Stock is recognised separately in the Profit & Loss Account. Sales Tax / VAT paid is charged to the Profit and Loss account.

1.13 Retirement Benefits

Contributions are made to Provident Fund as per the Provident Fund Act. Contribution to Gratuity Fund are made on the basis of actuarial valuation report as at the year end. Provision for Leave encashment benefit has been provided in accordance with the Accounting Standard (AS)15 "Employee Benefits" issued by the Institute of Chartered Accountants of India (ICAI).

1.14 Research and Development

All revenue expenditure on research and development are charged to Profit and Loss Account for the year in which they are incurred.

1.15 Inter-divisional Transfers

Internal transfers of goods between departments as captive consumption is shown as contra items in the Profit and Loss Account to reflect the true economic value of the production. Any unrealised profit on unsold stock is ignored while valuing inventories.

1.16 Borrowing Cost

Borrowing cost (including interest and exchange difference arising from foreign exchange borrowings) to the extent that they are regarded as the adjustments to interest costs directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of fixed assets are amortised and charged to Profit and Loss Account, over the tenure of the loan.

1.17 Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income- tax Act, 1961. Deferred tax resulting from 'timing difference' between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realisation.

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Mar 31, 2011

(a) Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and provisions of The Companies Act, 1956, read with the Companies (Accounting Standards) Rules, 2006. The Company follows the mercantile system of accounting and therefore recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise, are consistent with the generally accepted accounting principles.

(b) Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for returns, discount, rate difference and Value Added Tax ( VAT ) etc. on dispatch of goods to customers. Sales also include sale of scrape, waste, rejects, empty containers etc. Dividend income is recognized when right to receive payment is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

(c) Fixed Assets

Fixed Assets are stated at cost of acquisition or construction, net of CENVAT / VAT and include amounts added/reduced on revaluation, less accumulated depreciation. These assets have been stated at historical cost, except for the Fixed Assets which have been revalued. Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred, (including expenditure on test runs and experimental production) at project sites for the period prior to commencement of commercial production are capitalised as part of asset cost.

(d) Capital Work-in-Progress

Projects under commissioning and other capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

(e) Impairment of Assets

The carrying amount of the fixed assets is reviewed at each Balance Sheet date for impairment whenever events or changes in circumstances indicates that the carrying amount of an asset may not be recoverable. An impairment loss is recognized in the financial statement when the carrying amount of fixed assets exceeds the assessed estimated recoverable amount and charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The recoverable amount is the greater of assets' net selling price of its value in use. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(f) Investments

Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary. Current investments are carried at lower of cost and fair value, computed category wise.

(g) Inventories

Inventories are valued in accordance with the requirements of revised Accounting Standard (AS2), using weighted average cost method. Any item of inventory is valued at Net Realisable Value if the same is less than cost. Inventories are specifically identified, wherever possible in respect of traded goods. Inventory valuation is determined on the following basis:

(i) Raw materials, Stock in process, Finished Goods, Stores Spare parts & Chemicals, Packing Materials, Stock-in-trade (Art and Artifacts) are valued at cost or net realisable value whichever is lower.

(ii) Waste is valued at net realisable value.

(iii) By product is valued at net realisable value.

(iv) Property under Development is valued at revalued cost of land and construction thereon at cost.

(h) Foreign Currency Transactions

(i) Transactions denominated in foreign currencies are recorded at the rates of exchange in force at the time transactions are affected.

(ii) At each Balance sheet date, unrealized gains or losses on foreign currency transactions on account of increase or decrease in rupee liability as a result of exchange difference between the Balance sheet date rate and the transaction rate to items of assets and liabilities are recorded to the Profit and Loss account, and accordingly, assets or liabilities are adjusted.

(iii) The difference between forward rate and the exchange rate at the inception of a forward contract is recognized as income or expenses over the life of a contract, and any unrealized gains or losses, on account of fluctuations in the exchange rate pertaining to forward contracts at the Balance sheet date are recorded to the Profit and Loss account.

(i) Depreciation

Depreciation on fixed assets has been calculated on Straight Line Method at the rates prescribed in Schedule XIV to The Companies Act, 1956 except on the Factory Buildings and Plant & Machineries pertaining to Draw Winding & Draw Twisting section, specific Power Projects situated at Jolwa, Draw Warping and Gas Based Power Project situated at Vareli which is on written down value method. The depreciation on revalued assets, has been charged by dividing the unamortised depreciable amount over the residual useful life of the Assets. The depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets has been provided over the residual life of the assets.

(j) Expenses

All material known liabilities are provided for on the basis of available information / estimates.

(k) Cenvat

(i) The purchase cost of raw materials and other expenses has been considered net of cenvat available on inputs.

(ii) The cenvat benefits attributable to acquisition / construction of fixed assets is netted of against the cost of fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

(l) Excise Duty and Sales Tax/Value Added Tax

Excise Duty is accounted on the basis of both, payments made goods cleared as also provision made for goods lying in bonded warehouses & uncleared goods and the same has been treated as part of the cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty issued by The Institute of Chartered Accountants of India. Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock & Opening Stock of finished goods which is recognised separately in the Profit and Loss Account. Sales tax / Value added tax paid is charged to Profit and Loss Account.

(m) Retirement Benefits

Contributions are made to Provident Fund as per the Provident Fund Act. Contribution to Gratuity Fund are made on the basis of actuarial valuation report as at the year end. Provision for Leave encashment benefit has been made in accordance with the accounting standard AS-15 "Employee Benefits".

(n) Research and Development

All revenue expenditure on research and development are charged to Profit and Loss Account for the year in which they are incurred.

(o) Inter-divisional Transfers

Inter-divisional transfer of goods between departments as captive consumption is treated as contra items in the Profit and Loss Account to refect the true economic value of the production. Any unrealised profit on unsold stock is ignored while valuing inventories.

(p) Miscellaneous Expenditure

Miscellaneous Expenditure are Front end fees on loans of earlier years which are being written of equally over the duration of the respective loans.

(q) Borrowing Costs

Borrowing cost (Including interest and exchange differences arising from foreign exchange borrowings to the extent that they are regarded as the adjustments to interest costs) that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss account.

(r) Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income-tax Act, 1961. Deferred tax resulting from 'timing difference' between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realisation.

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Mar 31, 2010

(a) Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and provisions of The Companies Act, 1956, read with the Companies (Accounting Standards) Rules, 2006. The Company follows the mercantile system of accounting and therefore recognizes Income and Expenditure on accrual basis. Accounting policies not referred to otherwise, are consistent with the generally accepted accounting principles.

(b) Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Sales includes sale of goods, services, service tax, excise duty and sales during trial run period, adjusted for returns, discount, rate difference and Value Added Tax (VAT) etc. on dispatch of goods to customers. Sales also include sales of scrape, waste, rejects, empty containers etc. Dividend income is recognized when right to receive payment is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

(c) Fixed Assets

Fixed Assets are stated at cost of acquisition or construction, net of CENVAT / VAT and include amounts added / reduced on revaluation, less accumulated depreciation. These assets have been stated at historical cost, except for the Fixed Assets which have been revalued. Borrowing costs for acquisition or construction of a qualifying asset and revenue expenses incurred, (including expenditure on test runs and experimental production) at project sites for the period prior to commencement of commercial production are capitalised as part of asset cost.

(d) Capital Work-in-Progress

Projects under commissioning and other capital Work-in-Progress are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

(e) Impairment of Assets

The carrying amount of the fixed assets is reviewed at each Balance Sheet date for impairment whenever events or changes in circumstances indicates that the carrying amount of an asset may not be recoverable. An impairment loss is recognized in the financial statement when the carrying amount of fixed assets exceeds the assessed estimated recoverable amount and charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The recoverable amount is the greater of assetsnet selling price of its value in use. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(f) Investments

Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary. Current investments are carried at lower of cost and quoted/fair value, computed category wise.

(g) Inventories

Inventories are valued in accordance with the requirements of revised Accounting Standard-2 (AS2) issued by the Institute of Chartered Accountants of India on valuation of inventories using weighted average cost method as under:

(i) Raw Materials Stores, Spare parts, Chemicals and Stock in Process are valued at cost.

(ii) Finished goods and Stock-in-trade (Art & Artifacts) are valued at cost or Net realisable value whichever is lower.

(iii) Waste is valued at net realisable value.

(iv) Property under development is valued at book value.

Inventories are specifically identified, wherever possible in respect of traded goods.

(h) Foreign Currency Transactions

(i) Transactions denominated in foreign currencies are recorded at the rates of exchange in force at the time transactions are affected.

(ii) At each Balance sheet date, unrealized gains or losses on foreign currency transactions on account of increase or decrease in rupee liability as a result of exchange difference between the Balance sheet date rate and the transaction rate to items of assets and liabilities are recorded to the Profit and Loss account, and accordingly, assets or liabilities are adjusted.

(iii) The difference between forward rate and the exchange rate at the inception of a forward contract is recognized as income or expenses over the life of a contract, and any unrealized gains or losses, on account of fluctuations in the exchange rate pertaining to forward contracts at the Balance sheet date are recorded to the Profit and Loss account.

(i) Depreciation

Depreciation on fixed assets has been calculated on Straight Line Method at the rates prescribed in Schedule XIV to The Companies Act, 1956 except on the Factory Buildings and Plant & Machineries pertaining to Draw Winding & Draw Twisting section, specific Power Projects situated at Jolwa, Draw Warping and Gas Based Power Project situated at Vareli which is on written down value method. The depreciation on revalued assets, has been charged by dividing the unamortised depreciable amount over the residual useful life of the Assets. The depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets has been provided over the residual life of the assets.

(j) Expenses

All material known liabilities are provided for on the basis of available information / estimates. Ik) Cenvat

(i) The purchase cost of raw materials and other expenses has been considered net of cenvat available on

inputs. (ii) The cenvat benefits attributable to acquisition / construction of fixed assets is netted off against the cost of

fixed assets in accordance with the guidance note issued by The Institute of Chartered Accountants of India.

(I) Excise Duty and Sales Tax /Value Added Tax.

Excise Duty is accounted on the basis of both, payments made goods cleared as also provision made for goods lying in bonded warehouses & uncleared goods and the same has been treated as part of the cost of respective stock as per the revised Guidance Note on Accounting treatment for Excise Duty issued by The Institute of Chartered Accountants of India. Amount of Excise Duty shown as deduction from Sales is the total Excise Duty for the year except the duty related to difference between Closing Stock & Opening Stock of finished goods which is recognised separately in the Profit and Loss Account. Sales tax /Value added tax paid is charged to Profit and Loss Account.

(m) Retirement Benefits

Contributions are made to Provident Fund as per the Provident Fund Act. Contribution to Gratuity Fund are made on the basis of actuarial valuation report as at the year end. Provision for Leave encashment benefit has been made in accordance with the accounting standard AS-15 "Employee Benefits".

(n) Research and Development

All revenue expenditure on research and development are charged to Profit and Loss Account for the year in which they are incurred.

(o) Inter-divisional Transfers

Inter-divisional transfers of goods between departments as captive consumption is shown as contra items in the Profit and Loss Account to reflect the true economic value of the production. Any unrealised profit on unsold stock is ignored while valuing inventories.

(p) Miscellaneous Expenditure

Miscellaneous Expenditure are Front end fees on loans of earlier years which are being written off equally over the duration of the respective loans.

(q) Borrowing Costs

Borrowing cost (Including interest and exchange differences arising from foreign exchange borrowings to the extent that they are regarded as the adjustments to interest costs) that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period oftimetoget ready for its intended use. All other borrowing costs are charged to Profit and Loss account.

(r) Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income-tax Act, 1961. Deferred tax resulting from timing difference between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets are reviewed to reassure realisation.